United States v. Windle

United States Court of Appeals
For the First Circuit
No. 21-1477
UNITED STATES OF AMERICA,
Appellee,
v.
JEFFREY S. WINDLE,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. George A. O'Toole, Jr., U.S. District Judge]
Before
Lynch, Thompson, and Gelpí,
Circuit Judges.
Zainabu Rumala, Assistant Federal Public Defender, on brief
for appellant.
Rachael S. Rollins, United States Attorney, and Randall E.
Kromm, Assistant United States Attorney, on brief for appellee.
May 26, 2022
LYNCH, Circuit Judge. Within months of being released
from a fifteen-year prison sentence for convictions of mail and
wire fraud, money laundering, and tax evasion, Jeffrey S. Windle
once again engaged in fraud, in violation of the terms of his
supervised release. After Windle stipulated to the violations,
the district court added to the terms of his supervised release a
monitoring condition as to his computer activities to provide
Windle with needed incentives for him to comply with the law.
Windle argues on appeal, first, that this condition is unwarranted,
and second, that it is vague and overbroad. Only the first
objection was preserved.
The imposition of the computer monitoring condition was
not an abuse of discretion, as it was more than warranted by
Windle's long and extensive history of fraudulent use of computers
to obtain over $14 million from his victims and Windle's prompt
recidivism upon his release from imprisonment. Further, the
unpreserved arguments fail on plain error review, as there was no
error at all. We affirm.
I.
A. Procedural History
Windle pleaded guilty in March 2009 to a twenty-four-
count superseding indictment charging him with mail and wire fraud,
money laundering, and tax evasion. He was sentenced on June 23,
2009 to fifteen years of imprisonment, followed by three years of
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supervised release. He also was ordered to pay more than $14.5
million in restitution.
Windle was released from prison and began his first term
of supervised release in March 2020. Probation discovered by
October 2020 that Windle had violated conditions of his release,
and identified further violations in February 2021. Windle
stipulated to the violations at a revocation hearing held on May
5, 2021. The district court revoked Windle's supervised release.
The court sentenced Windle to a "12 month[] period [of
imprisonment], so that it will be a full 12 months, followed by
two years of supervised release."
The district court reimposed the previous conditions of
supervision and also imposed several new conditions. One of the
new conditions is the subject of this appeal and states:
The defendant shall allow the US Probation
Office to install software designed to monitor
computer activities on any computer and
smartphone the defendant is authorized to use.
This may include, but is not limited to,
software that may record any and all activity
on the computers the defendant may use,
including the capture of keystrokes,
application information, internet use
history, email correspondence, and chat
conversations.
Defense counsel did not object contemporaneously to the scope of
the computer monitoring condition, but did question whether the
condition was "appropriate" and "reasonably related to Mr.
Windle's conviction here," positing that the violations involved
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"more face-to-face transactions than the use of a computer." The
district judge responded: "No. I think the fraud aspects justify
it." We next describe this fraud.
B. Factual History
As the district court observed at Windle's first
sentencing hearing in 2009, Windle has "a history of . . . stealing
by fraud[,] deception, [and] misuse." This history began as early
as 1990, when Windle was first convicted as an adult of attempted
larceny for trying to defraud a store clerk. Since then, he has
been convicted of mail fraud, wire fraud, tax evasion, money
laundering, larceny, fraudulent use of a credit card, utter fraud,
forgery, and false claims.
Relevant here, between 2003 and 2008, Windle defrauded
his former employer, Cambium Learning, Inc. ("Cambium"), of nearly
$14 million and the Congregational Church of South Dennis ("CCSD")1
of close to $650,000. After serving more than a decade in prison
and while on supervised release in 2020, he again engaged in fraud
in an attempt to obtain a Range Rover and multi-million-dollar
properties. As next described, he frequently used computers to
execute this fraudulent activity.
1 CCSD is also commonly referred to as the South Dennis
Congregational Church, or "SDCC."
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1. Fraud on Cambium
In 2004, Windle was hired to be the Director of Budget
and Finance at Cambium, a company that provides instructional
materials, services, and technology to educators working with
struggling students. Windle was responsible for overseeing
various financial functions at Cambium, including the preparation
of consolidated financial statements, maintenance of financial
reporting records, closing of the company's books, payment of
company expenses, initiation of wire transfers, and writing and
signing of company checks.
Windle's fraud involved the purchase of two pieces of
real estate, one in Massachusetts and one in Florida. In the first
year he was hired, Windle wrote himself two checks totaling more
than $1.9 million from Cambium's checking and money market
accounts. He used the money to purchase the house in
Massachusetts, which his family moved into in 2005. Windle again
wrote a check from Cambium's checking account in 2006, that time
in the amount of approximately $1.16 million. After falsely
representing to the company's Chief Financial Officer that the
check was for a transfer of funds between Cambium accounts, Windle
used the money to purchase a bank check for a vacation home in
Florida.
Around the same period, Windle began using his email to
direct Cambium's accounts payable staff to issue checks that Windle
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ultimately used for his own personal benefit. He first sent emails
asking for checks in amounts totaling close to $180,000, all made
payable to "Jeffrey S. Windle." Windle falsely represented to the
staff that such payments were reimbursements for business expenses
he incurred. The staff issued Windle the checks, which he
deposited into his personal checking account and used to pay for
home renovations and to purchase cars and boats.
Windle also directed via email the accounts payable
staff to issue checks made payable to CCSD for "consulting fees"
pursuant to Cambium's "contract" with CCSD. Cambium had no
contract with CCSD. Cambium's accounts payable staff issued thirty
checks in accordance with Windle's email instructions, for a total
of approximately $275,000. Windle deposited the checks into CCSD's
bank account and then transferred the funds into his personal
account for his and his family's personal use.
Between March 2006 and April 2008, Windle also manually
wrote numerous checks from Cambium's Bank of America checking
account made payable to "SDCC" and "CCSD," and then emailed
Cambium's accounts payable to conceal his diversion. His emails
instructed the accounts payable staff to record the checks in
Cambium's books as inventory purchases. There had been no such
inventory purchases. Windle deposited these unauthorized checks,
which totaled approximately $4.8 million, into CCSD's account
before transferring the funds into his personal account. He set
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up a phony post office box address in the name of Bank of America
and fraudulently filled out bank confirmation forms to deceive
auditors as to the true balance of Cambium's bank account.
From June 2007 through April 2008, Windle used his
authority to pay Cambium's vendors from a company account in
Colorado (the "Sopris West" account) to direct numerous wire
transfers so that he could purchase real estate, a yacht and other
boats, a Mercedes, a golf club membership, and a landscaping
service. Windle further used email to ask the Operations Manager
at the company's bank for an address change for the Sopris West
account so that the account's bank statements would be mailed to
Windle (rather than to Cambium's senior staff accountant). Windle
then prepared false spreadsheets for Cambium that purported to
reflect the Sopris West account's banking transactions and account
balances to prevent discovery of the low balance in the account.
Windle obtained a total of approximately $5 million from these
wire transfers.
2. Fraud on the Church
Windle also defrauded his church. Windle and his family
were parishioners at CCSD, and he became the volunteer treasurer
of the church in 2003. As the treasurer, Windle oversaw and had
signature authority over several of CCSD's bank accounts. Instead
of closing certain of those accounts as directed, Windle kept them
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open and used them to launder the money he stole from Cambium and
the church.
Between 2003 and 2005, Windle wrote himself and his wife
collectively seven checks from CCSD's accounts for a total of
approximately $278,250. He stole an additional approximately
$434,000 from the church between December 2003 and January 2008 by
withdrawing cash or writing checks to himself or to third parties.
Windle took steps to conceal his fraud by fabricating
monthly financial statements and annual reports. He submitted
balance sheets that significantly overstated the amount of funds
in the church's accounts. Windle also created phony audit report
letters by fabricating the letterhead of an established Certified
Public Accountant ("CPA") firm. He did this to convince CCSD's
Board of Directors that the church's finances had been audited by
independent CPAs, although they had not.
Windle's schemes were uncovered in 2008. Law
enforcement discovered that Windle had failed to report his fraud
proceeds on his federal tax returns for the taxable years 2004
through 2007, and that he had prepared a fraudulent federal income
tax return (Form 1040) for each year, which he filed
electronically.2
2 Windle was convicted in 1997 of false claims, having
electronically filed false U.S. Income Tax Returns (Forms 1040)
for the 1993 and 1994 tax years based on fabricated W-2 Forms.
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Windle served more than a decade in prison for these
offenses. Within one year of his release in March 2020, Windle
engaged in the following fraudulent conduct:
3. Violations of Supervised Release
On October 13, 2020, Windle was arrested by Barnstable
Police Officers and charged with larceny over $1,200 by false
pretenses. In September 2020, Windle had agreed to make a wire
transfer to a car dealership in the amount of approximately
$118,000 for the purchase of a Range Rover, although he did not
have sufficient funds to do so. The transfer failed, and Windle
agreed to bring a personal check in its place. Based on this
promise, the car dealership permitted Windle's girlfriend to take
possession of the vehicle. Windle provided the dealership with a
personal check that same day, but the check did not clear. Windle
had placed a stop payment on the check. When the dealership tried
contacting Windle about the issue, Windle avoided the calls, so
the dealership contacted the police.
The Probation Office questioned Windle about the
incident. He admitted he did not have the funds to cover the
expense and did not explain his conduct.
Around the same time, Windle lied to the Probation
Office, saying that he did not sign (electronically) a Purchase
and Sale agreement for the purchase of a $4 million home as
"Jeffrey Whitney." As the Probation Office inquired about the
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purchase, it also discovered that Windle had failed to disclose,
as he was required to, all of his financial accounts. Windle
previously had told the Probation Office that his only financial
account was a checking account with Martha's Vineyard Bank.
Meanwhile, Windle had provided the real estate broker with a bank
statement in the name of Jeffrey Whitney from a retirement savings
account as proof of funds for the real estate transaction. The
account reflected a balance of more than $7 million. Upon further
inquiry from the Probation Office, Windle admitted he had a
different retirement account in his own name and provided a
screenshot via text message as proof of the account. That account
had a balance of approximately $350,000.
Windle thereafter was summoned and appeared before a
magistrate judge on December 4, 2020 for an initial appearance on
revocation proceedings. He was released pending the final
revocation hearing with an additional condition that he must use
his true name, which he promptly violated. Within one month,
Windle was caught trying to buy a $15 million home, presenting
himself as Jeffrey Leonard with a deposit check that never cleared.
In sum, for the underlying conviction, the record shows
that Windle used email to defraud Cambium and his church of
millions of dollars. The record further shows that he also used
his computer to conceal his schemes by creating fraudulent
spreadsheets, financial statements, annual reports, and audit
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letters and letterhead. As for the violation of his supervised
release, Windle used a computer to electronically sign the
fraudulent Purchase and Sale agreement and to access a retirement
account he was hiding from the Probation Office.
II.
We review preserved objections to the imposition of a
special condition of release for abuse of discretion and
unpreserved objections for plain error. United States v.
McCullock, 991 F.3d 313, 317 (1st Cir. 2021). "[W]e will find an
abuse of discretion only when left with a definite conviction that
'no reasonable person could agree with the judge's decision.'"
Id. (quoting United States v. Cruz-Ramos, 987 F.3d 27, 41 (1st
Cir. 2021)). This court will find plain error only if the
defendant shows "there [was] (1) an error (2) that is plain, and
that the error (3) affects substantial rights and (4) seriously
impairs the fairness, integrity, or public reputation of judicial
proceedings." United States v. Perazza-Mercado, 553 F.3d 65, 74–
75 (1st Cir. 2009) (quoting United States v. Prochner, 417 F.3d
54, 59 (1st Cir. 2005)).
In assessing the validity of a special condition,
we apply 18 U.S.C. § 3583(d) and U.S.S.G.
§ 5D1.3(b), which require that special
conditions cause "no greater deprivation of
liberty than is reasonably necessary" to
achieve the goals of supervised release, 18
U.S.C. § 3583(d)(2), and that the conditions
be "reasonably related" both to these goals
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and to the "nature and circumstances of the
offense and the history and characteristics of
the defendant[,]" 18 U.S.C. § 3583(d)(1); see
also 18 U.S.C. § 3553(a)(1).
Id. at 69. The goals of supervised release include
"deterr[ing] . . . criminal conduct," and "protect[ing] the public
from further crimes of the defendant." 18 U.S.C. §§ 3553(a)(2)(B)-
(C), 3583(d)(2).
This court has upheld broad restrictions on internet
access as a condition of supervised release "where (1) the
defendant used the internet in the underlying offense; (2) the
defendant had a history of improperly using the internet to engage
in illegal conduct; or (3) particular and identifiable
characteristics of the defendant suggested that such a restriction
was warranted." United States v. Aquino-Florenciani, 894 F.3d 4,
7 (1st Cir. 2018) (emphasis added) (quoting United States v.
Hinkel, 837 F.3d 111, 126 (1st Cir. 2016)).
As the recitation of facts demonstrates, the computer
monitoring condition was warranted. It is reasonably related to
the goals of supervised release, Windle's long history of fraud,
and his high risk of reoffending.
"This is not the case of a defendant who 'has no history
of impermissible internet use' and for whom 'the internet was not
an instrumentality of the offense conviction.'" See United States
v. Vélez-Luciano, 814 F.3d 553, 560 (1st Cir. 2016) (quoting
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Perazza-Mercado, 553 F.3d at 69); see also United States v.
Browder, 866 F.3d 504, 512 (2d Cir. 2017) (upholding computer
monitoring condition due to defendant's illicit computer usage);
United States v. Dolivek, 510 F. App'x 573, 574 (9th Cir. 2013)
(unpublished) (same). Windle's thirty-year criminal history and
habitual engagement in fraud using his computer, email, and the
internet, make the condition reasonable. He had been undeterred
by his twelve years in prison and his initial terms of supervised
release. The district court reasonably concluded that additional
conditions and incentives for him to comply with the law were
needed.
Windle's argument as to the fact that no computer or
smartphone monitoring condition had been imposed during his
initial supervision works against him. Indeed, Windle rapidly
returned to fraudulent activities during this initial supervision
in the absence of such a condition, showing the original conditions
were insufficient. This clearly supports the special condition at
issue here. United States v. Stergios, 659 F.3d 127, 134 (1st
Cir. 2011) ("It was . . . reasonable for the district court to
find, the second time around, that restrictions on [defendant's]
internet usage were necessary to deter him from committing further
crimes."). Windle's "status as a repeat offender suggested that
an internet restriction was warranted." Id. at 135.
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Windle's arguments that the condition on computer device
usage is overbroad and vague fail at step one of plain error
review. Windle focuses primarily on his overbreadth argument,
contending that the monitoring condition is overly intrusive, even
though his supervision is for only two years and the challenged
condition is not a complete or partial ban on Windle's computer or
internet usage. Cf. United States v. Ramos, 763 F.3d 45, 63 (1st
Cir. 2014) ("[As compared to broader internet bans,] monitoring
and filtering systems, searches of any computer equipment, and
searches of other electronic or data-storage devices upon
reasonable suspicion . . . are narrowly tailored tools."); Perazza-
Mercado, 553 F.3d at 73 ("[O]ur concern regarding a categorical
residential internet ban does not imply that [defendant] is
entitled to unlimited internet access, particularly if a
'relatively narrowly-tailored condition' would 'readily
accomplish[] the goal of restricting use of the Internet and more
delicately balance[] the protection of the public with the goals
of sentencing." (third and fourth alterations in original)
(quoting United States v. Zinn, 321 F.3d 1084, 1093 (11th Cir.
2003))).
Windle next argues that the district court should have
further narrowed the computer condition, such that the Probation
Office be required to have reasonable suspicion of further criminal
conduct or further violation of a condition of supervised release
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before it can monitor Windle's computer usage. He cites to and
misreads Stergios, 659 F.3d at 134. Such a limitation is not
necessary here. First, this court previously has endorsed the
imposition of computer monitoring and filtering systems, when
compared to broader internet and computer bans, as "narrowly
tailored tools" for deterring a defendant from using a computer to
commit further crimes. See Ramos, 763 F.3d at 63. Second, Windle
has already violated the conditions of his supervised release once.
For the reasons stated above, we reject Windle's
argument and affirm.
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