United States v. Tommie Huff

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 08-16272 ELEVENTH CIRCUIT
JUNE 25, 2010
________________________
JOHN LEY
CLERK
D. C. Docket No. 06-00059-CR-HL-5
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
TOMMIE HUFF,
Defendant-Appellant,
STEVE DEASON,
Defendant.
________________________
Appeals from the United States District Court
for the Middle District of Georgia
_________________________
(June 25, 2010)
Before EDMONDSON, BARKETT and BALDOCK,* Circuit Judges.
*
Honorable Bobby R. Baldock, United States Circuit Judge for the Tenth Circuit, sitting
by designation.
BARKETT, Circuit Judge:
Tommie Huff was convicted of bribery and conspiracy to commit wire fraud
and bribery, in violation of 18 U.S.C. §§ 1341, 1343, 201, for his role in a kickback
scheme that involved placing fraudulent supply orders for Robins Air Force Base
(“RAFB”). He raises three issues on appeal. First, he argues that there is
insufficient evidence to permit a reasonable juror to find that the single conspiracy
charged in the indictment existed because the government failed to prove any
interdependence between him and his co-defendant Steve Deason. Rather, Huff
argues that there were multiple independent “hub and spoke” conspiracies. Huff
also challenges his sentence, arguing that the district court erred in calculating the
amount of loss and the amount of restitution. He contends that the district court
should have considered only the value of the kickbacks Huff received when it
calculated both figures instead of the value of the kickbacks received by both Huff
and his co-conspirator “S.H.”1
I. CONVICTION
Huff contends that insufficient evidence supported his conviction for
conspiracy to defraud because the indictment charged a single conspiracy between
1
This opinion will refer to Huff’s co-conspirators as “S.H.” and “J.H.” because of the
sealed nature of the district court’s records.
2
Huff and Steve Deason but the government’s evidence only supported a finding of
of multiple “hub-and-spoke” conspiracies, in which S.H. and J.H. formed the hub
and he and Deason formed separate spokes. He argues that because there was no
interdependence between himself and Deason, there was no “rim” connecting the
individual spokes and thus there were multiple independent conspiracies, not the
single one that was charged in the indictment.
The applicable standard of review is whether, viewing the evidence in the
light most favorable to the government, a reasonable juror could have found the
existence of a single conspiracy beyond a reasonable doubt. United States v.
Richardson, 532 F.3d 1279, 1284 (11th Cir. 2008), cert. denied, 129 S. Ct. 950(Jan. 12, 2009). “In other words, a jury’s conclusion that a single conspiracy
existed should not be disturbed as long as it is supported by the evidence.” Id.“To determine whether a jury could reasonably have found that [the]
evidence established a single conspiracy beyond a reasonable doubt, [this court]
must consider: (1) whether a common goal existed; (2) the nature of the underlying
scheme; and (3) the overlap of participants.” Id. (emphasis and quotation marks
omitted). “The government must establish interdependence amongst the
co-conspirators.” United States v. Seher, 562 F.3d 1344, 1366 (11th Cir. 2009).
This court has explained that:
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The existence of separate transactions does not have to imply separate
conspiracies if the co-conspirators acted in concert to further a
common goal. Courts typically define the common goal element as
broadly as possible, with “common” being defined as “similar” or
“substantially the same.” If a defendant’s actions facilitated the
endeavors of other co-conspirators, or facilitated the venture as a
whole, then a single conspiracy is shown. Each co-conspirator thus
does not have to be involved in every part of the conspiracy.
Id. (quotations and citations omitted).
A “hub-and-spoke” conspiracy occurs where “a central core of conspirators
recruits separate groups of co-conspirators to carry out the various functions of the
illegal enterprise.” United States v.Chandler, 388 F.3d 796, 807 (11th Cir. 2004)
(citing Kotteakos v. United States, 328 U.S. 750, 755 (1946)). “The core
conspirators move from spoke to spoke, directing the functions of the conspiracy.”
Id. Where only one conspirator moves from spoke to spoke, however, the
conspiracy is analogous to a “rimless wheel,” with nothing connecting the separate
spokes into a single conspiracy. Id. “Thus, where the ‘spokes’ of a conspiracy
have no knowledge of or connection with any other, dealing independently with
the hub conspirator, there is not a single conspiracy, but rather as many
conspiracies as there are spokes.” Id. Where “the various spokes are aware of
each other and of their common aim,” however, there is a single conspiracy.
Seher, 562 F.3d at 1367.
Based upon the record in this case, we believe the government presented
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sufficient evidence to permit a reasonable juror to conclude that Huff and Deason
were involved in a single conspiracy. First, Huff, Deason, J.H., and S.H. shared a
common goal and worked in concert to defraud the government for their personal
benefit. Huff and Deason abused their position as government credit cardholders
by placing fraudulent orders with APC Supply (“APC”) and S&G Supply
(“S&G”), both of which were owned by S.H. and J.H. All four individuals
personally benefitted from the scheme; J.H. and S.H. would receive cash kickbacks
and additional orders while Huff and Deason received cash and merchandise
kickbacks.
Second, the nature of the underlying fraudulent scheme was substantially
similar because both Huff and Deason placed orders to APC or S&G that they
knew would not be filled (or would not be filled in full), paid for the orders with
government credit cards, and traveled to APC to pick up their share of the
fraudulent gain (in the form of cash or items for their personal use) from J.H. and
S.H.
Third, the government presented sufficient evidence to permit a finding of
Huff and Deason’s overlapping participation (i.e. interdependence) because Huff
placed orders for items that Deason picked up from APC’s offices even though
they worked in separate government offices and the items were destined for
5
delivery to RAFB directly. The jury also could have inferred that Huff and Deason
were aware of each other’s fraudulent arrangements with S.H. and J.H., APC, and
S&G because they (1) had a relationship with each other apart from their
transactions with S.H. and J.H., as they were good friends and fishing buddies; (2)
visited S.H. and J.H., who orchestrated this scheme, together; (3) used their
government credit cards to defraud the government for their personal benefit
through APC or S&G over the course of the same two-year time period; (4) visited
APC during the day and ate lunch there at APC’s expense during that same period;
and (5) were treated to a hunting trip together at APC’s expense (also during that
same period), which constituted a bribe for their continued participation in the
fraudulent scheme. The evidence presented was sufficient to permit a reasonable
juror to infer that Deason and Huff were aware of the scope of the J.H. and S.H.’s
scheme to defraud and that each took almost identical actions that not only
furthered the scheme as a whole but were interdependent.
Accordingly, the evidence was sufficient to establish a single conspiracy in
this case, and there was no material variance between the indictment and the
evidence presented at trial.2
2
While Huff relies heavily on Chandler and Kotteakos in support of his argument, these
cases are distinguishable from the facts here. In Chandler, this court held that the government
failed to prove a single conspiracy where the organizer of the conspiracy recruited individuals to
assist him in the conspiracy, but these individuals were unaware of each other and of the overall
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II. SENTENCE
A. Offense Level: Calculation of Loss Amount
Huff argues that the district court erred in determining the loss amount
attributable to him as $86,938.03. He argues that the proper amount of loss should
be based only on his counts of conviction, and that therefore he should have been
held responsible for only $42,068.64— the portion he received as “kickbacks”
from S.H., who retained the other half. Thus, he contends, under United States
Sentencing Guideline (“U.S.S.G.”) § 2B1.1(b)(1), his base offense level should
have been increased by six levels, not eight levels.
This court reviews de novo questions of law arising under the Sentencing
Guidelines. United States v. DeVegter, 439 F.3d 1299, 1303 (11th Cir. 2006).
This court reviews for clear error a district court’s factual determinations made at
sentencing. Id. Because Huff’s arguments on appeal focus on whether the district
court properly held him liable for kickbacks received by his co-conspirator, Huff
raises a legal issue subject to de novo review. Id.nature of the scheme. 388 F.3d at 806-812. This court noted that the conspiracy organizer
purposefully prevented his co-conspirators from finding out about each other or the nature of the
activity that was the object of the conspiracy. Id. at 806-07. In Kotteakos, the Supreme Court
held that the government failed to prove a single conspiracy where the defendants interacted
with the same individual to obtain loans in a fraudulent manner, but otherwise had no
relationship and no connection with each other. 328 U.S. at 754-55.
As discussed in greater detail earlier, Huff and Deason, unlike the defendants in Chandler
and Kotteakos, interacted with one another and with their co-conspirators S.H. and J.H. together.
7
For purposes of determining the offense level, under former U.S.S.G. §
2C1.1(b)(2)(A) (2002) (amended 2004), the amount of loss is the greater of “the
value of the payment, the benefit received or to be received in return for the
payment, or the loss to the government from the offense.” Contrary to Huff’s
contention, the value of the bribe (i.e. the kickback) is used only when the value of
the bribe exceeds the value of the benefit or the value of the benefit cannot be
determined because “for deterrence purposes, the punishment should be
commensurate with the gain to the payer or the recipient of the bribe, whichever is
greater.” U.S.S.G. § 2C1.1 cmt. background (2002) (amended 2004). Huff is also
liable for: (1) all acts by others that he aided and abetted; and (2) the acts of his co-
conspirators that were reasonably foreseeable to him and thus, jointly undertaken
criminal activity. U.S.S.G. § 1B1.3(a)(1)(A) and (B).
Huff’s contention that the loss amount is limited to his share of the
kickbacks (i.e. his portion of the bribe) is foreclosed by this court’s decision in
DeVegter, 439 F.3d at 1303. In DeVegter, one of the two defendants, who worked
at an investment banking firm, gave an intermediary $83,872 to use as a bribe in
order to obtain a government contract. Id. at 1302. The intermediary who received
this money, in turn, gave half of it to the other defendant, who helped secure the
contract for the investment firm. Id. at 1302, 1305 n.3. The district court
8
calculated the loss amount based on the half-portion of the bribe that one of the
defendants ultimately received. Id. at 1305 n.3.
On appeal, this court explained that, under U.S.S.G. § 2B4.1, which cross-
references § 2C1.1 (the Guideline provision at issue in this case), the loss amount
used at sentencing may be based on the amount of the bribe that a defendant
received, but only if it was not possible to estimate the net value of the improper
benefit garnered by the defendant’s fraudulent conduct. Id. at 1305 n.3 Thus, we
held that it was inappropriate to use the amount of the bribe as the loss amount, and
that the improper benefit to the investment firm should have been used as the loss
amount because it could be calculated with reasonable certainty and would have
exceeded the amount of the bribe he received. See id. at 1303-05, n.2. This court
also clarified that, even if it were appropriate to determine the loss amount based
on the bribe, the loss amount should have been equal to the full, initial bribe
amount, not just the half-portion of the bribe one of the defendants ultimately
received. Id. at 1305 n.3.
The same analysis and result applies here. Huff does not seriously dispute
the fact that the amount of his “kickbacks” was less than the amount that APC or
S&G benefitted as a result of the illegal scheme. Thus, the bribe amount would not
be the proper measure of loss here under § 2C1.1, which requires the imposition of
9
whichever is greater: the value of gained by the payer of the bribe or the recipient
of the bribe. Furthermore, under § 1B1.3, Huff is liable for all acts he aided and
abetted (which includes the fraud that S.H. and J.H. perpetrated on the government
through APC and S&G) and for the acts of his co-conspirators that were
reasonably foreseeable to him (i.e. S.H.’s acts).
Therefore, the district court did not err in basing the loss amount on Huff’s
substantive counts of conviction only and calculating it as $86,938.03, which was
the total amount of the fraudulent checks written by his co-conspirator S.H.
($84,137.28) plus the value of the hunting trip Huff received as a bribe
($2,800.75).3 Notably, the district court limited its loss calculation to the
substantive counts of conviction on the charges of bribery even though it was
authorized under § 1B1.3 to include the loss amount attributable to Huff’s co-
conspirator Deason.
In conclusion, the district court’s calculation of $86,938.03 as the loss
amount was not clearly erroneous.
3
While the district court’s language indicated that the loss amount included the value of
the two hunting trips, our review reveals that the district court held Huff responsible for the
value of the 2002 hunting trip only. The total amount of $86,938.03 is comprised of the value of
the total amount of the checks set forth in Huff’s substantive counts of conviction for bribery
($84,137.28) and the value of the 2002 hunting trip ($2,800.75). This calculation is consistent
with the district court’s decision to hold Huff responsible for only the amounts relating to his
substantive counts of conviction because the jury did not convict Huff of bribery relating to the
2001 hunting trip.
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B. Restitution Order
Huff argues that the district court abused its discretion by ordering that he
pay restitution in an amount equal to the monetary figure that both he and S.H.
received as kickbacks, again contending that he should have been held liable for
only half that amount. Specifically, Huff relies on this court’s decision in United
States v. Vaghela, 169 F.3d 729 (11th Cir. 1999), in support of his argument that
he should have been ordered to pay restitution in the amount of $42,068.64 (i.e. the
amount of the kickbacks he actually received) rather than $86,938.03 (the loss
amount calculated by the district court for offense level purposes).
The government responds that the court’s restitution order was supported by
the evidence, and reasserts its argument that the district court was authorized to
(but did not) hold Huff responsible for a greater amount—the value of all the
orders that he and Harper processed through S&G and for Deason’s acts. The
government argues that Vaghela is inapposite because, in that case, the victim was
not substantially defrauded, whereas RAFB was substantially defrauded by the
fraudulent orders processed through S&G. Id. at 40-41.
This court reviews de novo the legality of a restitution order, and for clear
error a factual finding regarding the specific amount of restitution. United States v.
Foley, 508 F.3d 627, 632 (11th Cir. 2007) (citations omitted).
11
Huff was convicted of an offense against property: conspiracy to commit
wire fraud in violation of 18 U.S.C. § 1343. Accordingly, the district court was
obligated to order restitution under the Mandatory Victim Restitution Act
(“MVRA”), 18 U.S.C. § 3663A. Here, there is no argument or evidence that the
burden of calculating actual loss to RAFB outweighed the need to compensate the
government, therefore the district court was obligated to order restitution. 18
U.S.C. § 3663A(a)(1), (c)(1)(A)(ii), (3); United States v. Dickerson, 370 F.3d
1330, 1335-36 (11th Cir. 2004).
Huff does not dispute that some amount of restitution is owed; the question
is how much. Under 18 U.S.C. § 3664, “the court shall order restitution to each
victim in the full amount of each victim’s losses as determined by the court.” 18
U.S.C. § 3664(f)(1)(A) (emphasis added). A restitution award “must be based on
the amount of loss actually caused by the defendant’s conduct.” United States v.
Liss, 265 F.3d 1220, 1231 (11th Cir. 2001) (emphasis added). The government
bears the burden of proving the amount of the loss. Id. at 1231-32; 18 U.S.C. §
3664(e). “[A]s part of its burden to prove a restitution amount, the government
must deduct any value that a defendant’s fraudulent scheme imparted to the
victims.” United States v. Swanson, 483 F.3d 509, 515 (7th Cir. 2007).
Here, the district court ordered Huff to pay $86,938.03 in restitution—the
12
same amount as the loss amount the district court calculated for purposes of Huff’s
offense level. However, the amount of loss does not necessarily equal the amount
of restitution to be paid because “[a] defendant’s culpability will not always equal
the victim’s injury.” United States v. Catherine, 55 F.3d 1462, 1465 (9th Cir.
1995); see also United States v. Simpson, 538 F.3d 459, 463-66 (6th Cir. 2008)
(holding that district court may look to intended loss for loss amount but must base
restitution amount on actual loss); United States v. Gallant, 537 F.3d 1202, 1247
(10th Cir. 2008), cert. denied, 129 S. Ct. 2026 (Apr. 20, 2009) (“The calculation of
loss under the Sentencing Guidelines. . . does not necessarily establish loss under
the MVRA [for restitution].”); United States v. Germosen, 139 F.3d 120, 130 (2d
Cir. 1998) (“Of course, an amount-of-loss calculation for purposes of sentencing
does not always equal such a calculation for restitution.”). This is because, inter
alia,4 the amount of loss (for purposes of offense level calculation) is either the
actual or intended loss while the restitution amount must be the actual loss suffered
by the victim. Compare U.S.S.G. § 2F1.1 Cmt. n.7(b) (amount of loss is the
greater of the intended or actual loss) with 18 U.S.C. § 3663(b) (amount of loss is
“actual loss” to victim). Thus, “[a] court could find that a defendant intended a
4
In addition, restitution may include prejudgment interest while the amount of loss
cannot. Compare United States v. Smith, 944 F.2d 618, 626 (9th Cir. 1991) (applying the
MVRA, 18 U.S.C. § 3663) with U.S.S.G. § 2F1.1 cmt. (n.7).
13
large amount of loss for sentencing purposes, but then order a much-reduced
amount in restitution in light of the actual losses suffered by the victims.” United
States v. Allen, 529 F.3d 390, 396-97 (7th Cir. 2008).
The record currently before the court does not explain how the district court
reached its restitution figure. While the determination of the restitution amount “is
by nature an inexact science,” United States v. Teehee, 893 F.2d 271, 274 (10th
Cir. 1990), under the MVRA, the district court is directed to “engage in an
expedient and reasonable determination of appropriate restitution by resolving
uncertainties with a view toward achieving fairness to the victim.” United States v.
Gordon, 393 F.3d 1044, 1047 (9th Cir. 2004) (relying on legislative history of
“nearly identical” Victim and Witness Protection Act, 18 U.S.C. § 3663, S. Rep.
No. 97-532, at 31 (1982), reprinted in 1982 U.S.C.C.A.N 2515, 2537, for guidance
in interpreting MVRA, 18 U.S.C § 3363A). The district court must explain its
findings with sufficient clarity to enable this court to adequately perform its
function on appellate review. See United States v. Gupta, 572 F.3d 878, 890-91
(11th Cir. 2009) (remanding for district court to determine the amount of
restitution owed); accord United States v. McAlpine, 32 F.3d 484, 490-91 (10th
Cir. 1994) (vacating restitution order and remanding for district court to make
specific factual findings because record did not indicate how district court arrived
14
at the specific restitution figure such that the reviewing court “was unable to
effectively review the court’s findings, and [was] unable to determine if the
findings represent the victims’ losses). We are unable to do so in this case due to
the presence of two major points of ambiguity in the record.
First, the government presented evidence that not all of the orders placed by
Huff were fraudulent. Indeed, Huff placed some orders with APC and S&G that
were filled as expected, but the fraudulent orders were ones that were placed but
(a) only partially filled, (b) not filled at all, (c) filled with personal items intended
for use by Deason, or (d) filled with another item. It is undisputed that RAFB
suffered some amount of loss due to its payments for orders that were never or
only partially filled under the fraudulent scheme. But the district court did not
make specific factual findings on how it calculated the exact dollar amount of the
victims’ actual losses. The government presented evidence of the total amount
charged to the government credit cards during the time period of the scheme, but a
portion of those charges were for goods that were ordered and actually provided
and thus would not count towards the restitution calculation. S.H. testified that the
kickbacks S.H. and Huff pocketed were from the “profits” of the scheme. It is
unclear from the sentencing transcript whether the district court determined if the
victim (RAFB) received any value from some of Huff’s fraudulent orders that
15
formed the basis for his substantive wire fraud convictions or if those orders were
ones in which no items were supplied and thus were pure “profit” as S.H.
suggested.
These facts are significant because any value of the services or items
received by the victim (RAFB) must be offset against the restitution order. In
Vaghela, the defendant, who worked for a medical clinic, accepted bribes in
exchange for sending the clinic’s lab work to a particular laboratory. 169 F.3d at
731. The Department of Health and Human Services ultimately paid $50,420.02
for some of this lab work, and the defendant received $23,400 in bribes. Id. This
court held that the district court erred in finding that the defendant should pay
$50,420.02 in restitution because it appeared that the lab work performed had been
medically necessary, and, as a result, the government received a valuable service in
exchange for its payments to the lab. Id. at 736. Thus, this court held that the
amount of restitution should be the amount the defendant received in bribes:
$23,400. Id.In this case, the district court must make specific factual findings of whether
the victim suffered a loss and the amount of those actual losses. The court must
determine whether any value has been rendered to the victim in the form of a
service or product that should be offset against the restitution amount. As it
16
currently stands, the district court appeared to adopt the Presentence Investigation
Report’s (“PSR”) recommendation on the restitution amount and did not make
specific factual findings at the sentencing hearing as to how this amount was
calculated. The failure to explicate its methodology leaves us in doubt of the
propriety of the $86,938.03 restitution award.
Next, given the record currently before this court, it is also unclear whether
the district court’s restitution order of $86,938.03 was meant to include the
$42,068.64 that was attributable to S.H.’s share of the kickbacks. Specifically, did
the district court already account for this $42,068.64 (S.H.’s share of the
kickbacks) in S.H.’s restitution order,5 or did the district court intend that Huff
share jointly and severally in S.H.’s obligation for this amount in addition to the
kickbacks Huff himself received? This factual finding is significant because “[t]he
proper amount of restitution is the amount wrongfully taken by the defendant.”
United States v. Allen, 529 F.3d 390, 396 (7th Cir. 2008) (citation omitted).
Restitution is not intended to “provide a windfall for crime victims but rather to
ensure that victims, to the greatest extent possible, are made whole for their
5
The Presentence Investigation Report noted that the total amount of restitution owed to
the United States Treasury for RAFB was $342,777. The PSR noted that the amount of
restitution owed by Huff should be offset by the restitution ordered for the other co-conspirators:
Deason, S.H., and J.H. It is unclear though whether the amount of restitution the district court
ordered for S.H. included the $42,068.64 in kickbacks that S.H. retained.
17
losses.” United States v. Arutunoff, 1 F.3d 1112, 1121 (10th Cir. 1993) (citing 18
U.S.C. § 3663(b)(1)). Thus, if the district court has already accounted for that
amount in its separate restitution order in S.H.’s criminal judgment and did not
intend for the obligation to be jointly and severally shared by Huff, it would appear
that its existing restitution order would provide a windfall to the victim, who would
be compensated twice for S.H.’s share of the kickbacks—once by S.H.’s restitution
order and once by Huff’s.
Because the district court did not make specific factual findings of the
victims’ actual losses, as required by § 3664, we therefore are unable to determine
whether the amount of restitution imposed by the district court exceeded the
victims’ actual losses. Accordingly, we vacate the restitution order and remand for
a limited resentencing on the sole issue of the amount of restitution.
AFFIRMED IN PART, AND VACATED AND REMANDED IN PART.
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