United States v. Ebersole

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 03-4847
RUSSELL LEE EBERSOLE,
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Leonie M. Brinkema, District Judge.
(CR-03-112-A)
Argued: October 29, 2004
Decided: June 14, 2005
Before WILKINSON, MICHAEL, and KING, Circuit Judges.
Affirmed in part, vacated in part, and remanded by published opinion.
Judge King wrote the opinion, in which Judge Wilkinson joined.
Judge Michael wrote a separate opinion concurring in part and dis-
senting in part.
COUNSEL
ARGUED: Gregory Edward Stambaugh, Manassas, Virginia, for
Appellant. Thomas Higgins McQuillan, Assistant United States Attor-
ney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria,
Virginia, for Appellee. ON BRIEF: Paul J. McNulty, United States
Attorney, Robert C. Erickson, Assistant United States Attorney, Alex-
andria, Virginia, for Appellee.
2 UNITED STATES v. EBERSOLE
OPINION
KING, Circuit Judge:
Russell Lee Ebersole appeals his convictions and sentence on
twenty-five counts of wire fraud, in violation of 18 U.S.C. § 1343,
and two counts of presenting false claims to the government, in con-
travention of 18 U.S.C. § 287. The district court sentenced Ebersole
to seventy-eight months of imprisonment. Ebersole maintains, among
various appellate contentions, that venue was defective in the Eastern
District of Virginia, and that the court erroneously enhanced his sen-
tence under the Sentencing Guidelines. As explained below, we
affirm Ebersole’s convictions on all counts. However, we vacate his
sentence, which was imposed in violation of the Sixth Amendment
and otherwise improperly enhanced for abuse of a position of trust,
and we remand for resentencing in light of United States v. Booker,
125 S. Ct. 738 (2005), and its progeny.
I.
Ebersole was the president and director of a business called Detec-
tor Dogs Against Drugs and Explosives, Inc. ("Detector Dogs"), a pri-
vately held Maryland corporation. Detector Dogs trained dogs and
their human handlers to find drugs and explosives, and then offered
the services of the canine teams to customers. Ebersole operated
Detector Dogs alongside a pet boarding and training facility in Fred-
erick County, Virginia, in the Western District of Virginia, as well as
from his home in Hagerstown, Maryland.
In the aftermath of the September 11, 2001 terrorist attacks, federal
agencies urgently sought the services of qualified explosive ordnance
detection canine teams (sometimes referred to as "EOD canine teams"
or "bomb-sniffing canine teams") for the protection of their employ-
ees and the public. Among those agencies were the Department of
State (the "State Department"), through its primary contractor, Inter-
con Security Services, Inc. ("Intercon"), for the State Department’s
Harry S Truman Building in Washington, D.C.; the Board of Gover-
nors of the Federal Reserve System (the "BOG-FED"), also for build-
ings in Washington; and the Internal Revenue Service (the "IRS"),
through its primary contractor, Worldwide Security Services, Inc.
UNITED STATES v. EBERSOLE 3
("Worldwide"), for the IRS service center in Fresno, California. Eber-
sole sought to persuade those agencies to retain Detector Dogs’s ser-
vices based on a series of material misrepresentations that he made in
written proposals and in fabricated examination, certification, and
training curriculum documents. The dogs on the Detector Dogs canine
teams actually were poorly trained, and their human handlers lacked
adequate knowledge and experience, all in contravention of govern-
ment standards and requirements.1 Detector Dogs initiated its services
for the State Department on September 24, 2001. Eventually doubting
the competence of the Detector Dogs canine teams, the State Depart-
ment arranged to have an odor recognition proficiency test adminis-
tered to six of the dogs assigned to protect the Harry S Truman
Building. The test had been developed earlier by the Bureau of Alco-
hol, Tobacco and Firearms (the "BATF") to determine by a standard-
ized method whether a dog could successfully detect the odor of
explosives. The test was given on April 22, 2002, at the BATF Canine
1
For example, a former Detector Dogs employee testified that, in
March 2002, she had assisted Ebersole in creating test results and certifi-
cations (dated as far back as 1997) for dogs designated for the IRS
assignment, and that Ebersole had embellished the resumes of their han-
dlers, adding false information such as that one handler had "[a]ssisted
the Secret Service on security missions for the [P]resident of the United
States and foreign dignitaries." Another former Detector Dogs employee
testified that she was a 19-year-old kennel hand when Ebersole directed
her to serve as a handler at the BOG-FED facilities; she stated that, "if
a dog would have hit on something, I never knew who to call, what to
do, what I was supposed to do exactly." The trial evidence also showed
that Ebersole utilized forged certificates proclaiming him to be a certified
instructor of handlers of bomb-sniffing dogs, and a document purporting
to set forth Detector Dogs’s training curriculum (a program running
303.5 hours in length). However, handlers testified that they trained for
no more than a fraction of that time before being posted with the federal
agencies, which had been told by Ebersole in written proposals that the
handlers were seasoned canine team veterans with more than twenty
years of experience. Witnesses also contradicted other claims made in
the written proposals, including that several Detector Dogs’s employees
were nationally certified trainers and judges with the United States Police
Canine Association and the North American Police Work Dog Associa-
tion, and that Virginia’s Department of Criminal Justice Services had
approved Detector Dogs’s training procedures and certified its handlers.
4 UNITED STATES v. EBERSOLE
Enforcement Training Academy in Front Royal, Virginia, to the dogs
on the State Department job, all of which failed the test (with their
Detector Dogs handlers participating). Immediately thereafter, Inter-
con terminated its subcontract with Detector Dogs for the provision
of EOD canine teams to the State Department.
Detector Dogs was paid more than $212,000 for services it ren-
dered to the State Department during the period of the Intercon sub-
contract. Detector Dogs had submitted its invoices to Intercon in the
District of Columbia. Intercon then reviewed and approved those
invoices for payment, paid Detector Dogs by check, and submitted
Intercon invoices (with the Detector Dogs invoices attached) to a
State Department office in Washington, D.C. Consistent with State
Department procedures, the Washington office initially approved the
Intercon invoices, and then forwarded them for final payment authori-
zation to a State Department office in Rosslyn, Arlington County,
Virginia, in the Eastern District of Virginia. Upon final approval of
the Intercon invoices, the State Department’s Rosslyn office commu-
nicated by wire with a Treasury Department office in Kansas City,
Missouri, which paid Intercon.
Detector Dogs began providing services at BOG-FED buildings in
Washington, D.C., on October 9, 2001. In a covert on-site test per-
formed on April 4, 2002, three of the Detector Dogs dogs failed to
detect the presence of fifty pounds of trenchrite 5 dynamite, fifty
pounds of TNT, and fifteen pounds of the plastic explosive C-4 con-
tained in three separate unmarked vehicles that were allowed to enter
a BOG-FED parking garage. Based on those test results, the BOG-
FED cancelled its contract with Detector Dogs on April 30, 2002.
The BOG-FED paid Detector Dogs approximately $392,000 for its
services. Once the BOG-FED had decided to pay a particular Detector
Dogs invoice, relevant data was entered into a computerized account-
ing system in Washington and then transmitted to the Federal Reserve
Bank in Richmond, Virginia, in the Eastern District of Virginia,
where the BOG-FED maintained an account. The amount of the
Detector Dogs invoice was thereafter: (1) debited from the BOG-FED
account at the Federal Reserve Bank; (2) credited to the Bank of
America’s reserve account, also at the Federal Reserve Bank; and (3)
credited by the Bank of America from its reserve account to an
UNITED STATES v. EBERSOLE 5
account held by Detector Dogs at a Bank of America branch office
in Frederick, Maryland.
As for the services provided by Detector Dogs to the IRS, World-
wide informed Detector Dogs that its bomb-sniffing canine teams
would be subjected to on-site operational testing at the inception of
the job. The Detector Dogs teams began work at the IRS Fresno ser-
vice center in early 2002, and they subsequently failed tests involving
odor detection of hidden explosives on March 19, 25, and 26, and
April 29, 2002. On May 16, 2002, Worldwide terminated its subcon-
tract with Detector Dogs for the IRS-Fresno work. Detector Dogs
received approximately $92,000 for its services to the IRS. World-
wide had paid Detector Dogs by wire transfer from its bank in Chi-
cago, Illinois, to the reserve account that Detector Dogs’s bank, the
Bank of America, maintained at the Federal Reserve Bank of Rich-
mond. Those payments then were credited by the Bank of America
to Detector Dogs’s account at the bank’s Frederick, Maryland branch
office.
Ebersole also pursued a contract for Detector Dogs to provide
bomb-sniffing canine teams to the Federal Emergency Management
Agency ("FEMA") for its disaster field office in New York City. On
September 27, 2001, Ebersole dispatched a dog-and-handler team to
New York City for FEMA; however, the team returned to Maryland
the next day without performing any work. FEMA had agreed to
reimburse Detector Dogs for travel expenses. Although the handler
submitted expenses to Ebersole of $1,100 for the overnight trip, Eber-
sole submitted an invoice to FEMA in the sum of $11,514.
As instructed by FEMA, Ebersole sent that invoice to a post office
box in Berryville, Clarke County, Virginia, in the Western District of
Virginia. In the normal course of business, a FEMA employee
retrieved mail sent to that post office box, including the Detector
Dogs invoice, and transported it to a central mail processing facility
located in neighboring Loudoun County, Virginia, in the Eastern Dis-
trict of Virginia. The invoice then was routed to the appropriate per-
son in FEMA’s Disaster Finance Division, at an office in Berryville.
The central mail processing facility and the Disaster Finance Division
office are located within FEMA’s sprawling facilities on Mount
Weather, which straddles Clarke and Loudoun counties. The Detector
6 UNITED STATES v. EBERSOLE
Dogs invoice was eventually forwarded from Mount Weather to a
FEMA contracting officer in New York. FEMA subsequently remit-
ted payment to Detector Dogs in the requested sum of $11,514.
In all, the federal agencies paid Ebersole more than $708,000 for
bomb-sniffing canine team services. On the basis of these activities
and the payments made to Ebersole, and as explained below, the Gov-
ernment instigated and prosecuted the underlying proceedings.
II.
A.
A grand jury in the Eastern District of Virginia returned an indict-
ment against Ebersole on March 13, 2003, charging him with twenty-
six counts of wire fraud and two counts of presenting false claims to
the government.2 The indictment generally alleged that Ebersole had
devised a scheme to obtain money from the federal agencies by
inducing them — by means of false and fraudulent pretenses, repre-
sentations, and promises — to use Detector Dogs’s services.
2
The wire fraud statute provides for criminal penalties, including fines
and imprisonment, against
[w]hoever, having devised or intending to devise any scheme or
artifice to defraud, or for obtaining money or property by means
of false or fraudulent pretenses, representations, or promises,
transmits or causes to be transmitted by means of wire, radio, or
television communication in interstate or foreign commerce, any
writings, signs, signals, pictures, or sounds for the purpose of
executing such scheme or artifice.
18 U.S.C. § 1343. The false claims statute provides for such penalties
against
[w]hoever makes or presents to any person or officer in the civil,
military, or naval service of the United States, or to any depart-
ment or agency thereof, any claim upon or against the United
States, or any department or agency thereof, knowing such claim
to be false, fictitious, or fraudulent.
18 U.S.C. § 287.
UNITED STATES v. EBERSOLE 7
The wire fraud and false claims statutes do not include explicit
venue provisions. To support venue on the wire fraud charges in the
Eastern District of Virginia, the prosecution relied on the following
wire communications (all involved in paying for those services): (1)
from the State Department in Rosslyn, Arlington County, to the Trea-
sury Department in Kansas City, Missouri, for the fourteen State
Department-related counts;3 (2) from the BOG-FED in Washington,
D.C., to the Federal Reserve Bank in Richmond, for the ten BOG-
FED-related counts;4 and (3) from Worldwide’s bank in Chicago, Illi-
nois, to the Bank of America reserve account in Richmond, for the
single IRS-related count.5 Finally, to support venue on the two false
claims charges, the prosecution pointed to the following: the handling
of Ebersole’s invoice at FEMA’s Mount Weather mail processing
center in Loudoun County, for the FEMA-related count;6 and the pro-
cessing of an Intercon invoice (with a Detector Dogs invoice
attached) by the State Department in Rosslyn, for the State
Department-related count.7
Ebersole unsuccessfully challenged the propriety of venue at vari-
ous points in the district court proceedings.8 Ebersole’s trial began on
June 9, 2003. On June 20, 2003, the jury returned a verdict of guilty
3
Counts 5, 7-8, 11-13, 15, 17, 19-20, and 23-26.
4
Counts 1, 3-4, 6, 9-10, 14, 16, 18, and 21.
5
Count 22. A single FEMA-related wire fraud count — count 2 — was
dismissed at trial on motion of the prosecution.
6
Count 27.
7
Count 28.
8
Specifically, Ebersole challenged venue: in his April 7, 2003 pretrial
motion seeking dismissal of the indictment; during the May 2, 2003 hear-
ing conducted in the district court on that pretrial motion; in his June 16,
2003 motion, made during the trial at the close of the prosecution’s case-
in-chief, for judgment of acquittal on the FEMA-related false claim
count, with accompanying general "continuing objections" to venue on
all other charges; in his June 17, 2003 written objection to the prosecu-
tion’s proposed venue instruction on the false claims charges; during the
June 18, 2003 charge conference conducted in the district court; in his
June 30, 2003 post-trial motion for judgment of acquittal on all counts;
and during the September 8, 2003 hearing conducted in the district court
on that post-trial motion.
8 UNITED STATES v. EBERSOLE
on each of the twenty-seven counts before it. Significantly, the jury
had been instructed that it was required to find proper venue in order
to convict Ebersole on a given count. On appeal, Ebersole continues
to maintain that none of the charges against him were susceptible to
trial in the Eastern District of Virginia.
B.
As a general proposition, venue is proper in any district where the
subject crime was committed. United States v. Wilson, 262 F.3d 305,
320 (4th Cir. 2001) (citing U.S. Const. art. III, § 2, cl. 3; Fed. R.
Crim. P. 18). If Congress does not explicitly provide for venue when
it enacts a criminal statute, venue is to "‘be determined from the
nature of the crime alleged and the location of the act or acts consti-
tuting it.’" United States v. Cabrales, 524 U.S. 1, 6-7 (1998) (quoting
United States v. Anderson, 328 U.S. 699, 703 (1946)). This assess-
ment must focus on the "essential conduct elements" of the charged
offense. United States v. Bowens, 224 F.3d 302, 311 (4th Cir. 2000)
(holding "that the place where a criminal offense is committed is
determined solely by the essential conduct elements of that offense").
The venue determination also is guided by the general venue provi-
sions for federal criminal offenses, set forth in 18 U.S.C. §§ 3231-
3244.
The prosecution bears the burden of proving venue by a preponder-
ance of the evidence and, when a defendant is charged with multiple
crimes, venue must be proper on each count. Bowens, 224 F.3d at
308. For some offenses, there may be "more than one appropriate
venue, or even a venue in which the defendant has never set foot." Id.
at 309 (citations omitted).
The Supreme Court has cautioned that the question of venue in a
criminal case is more than a matter "of formal legal procedure";
rather, it raises "deep issues of public policy in the light of which leg-
islation must be construed." United States v. Johnson, 323 U.S. 273,
276 (1944). The Court also has observed that the venue provisions of
the Constitution are meant to act as safeguards, protecting the defen-
dant from bias, disadvantage, and inconvenience in the adjudication
of the charges against him. Travis v. United States, 364 U.S. 631, 634
(1961) (citing U.S. Const. Art. III, § 2 (pertaining to venue)); U.S.
UNITED STATES v. EBERSOLE 9
Const. amend. VI (pertaining to jury trials)). Despite its constitutional
dimension, however, proper venue may be waived by the defendant.
See United States v. Collins, 372 F.3d 629, 633 (4th Cir. 2004);
United States v. Melia, 741 F.2d 70, 71 (4th Cir. 1984). With these
principles in mind, we address Ebersole’s venue contentions in turn.
1.
With regard to the twenty-five wire fraud counts, Ebersole first
contends that the district court erred in treating wire fraud as a "con-
tinuing offense," triable under 18 U.S.C. § 3237(a) "in any district in
which such offense was begun, continued or completed" — including
any district in which a subject wire communication was transmitted
in the course of paying the perpetrator of the fraud scheme.9 Alterna-
tively, Ebersole asserts that, even conceding that wire fraud consti-
tutes such a continuing offense, venue on the wire fraud counts was
not constitutionally permissible because he did not intend or foresee
the payment-related transmittals into and out of the Eastern District
of Virginia on which the prosecution relies. For the following reasons,
we decline to vacate Ebersole’s wire fraud convictions on either of
those grounds.
a.
Ebersole initially pressed his theory that wire fraud does not consti-
tute a "continuing offense," for purposes of establishing venue under
§ 3237(a), in his April 7, 2003 pretrial motion seeking dismissal of
the indictment. That motion was denied following the May 2, 2003
hearing conducted in the district court. Ebersole had maintained (and
presently contends) that his wire fraud offenses were complete once
he induced the federal agencies to use Detector Dogs’s services, thus
precipitating the subsequent wire communications. According to
Ebersole, because the wire communications themselves had occurred
later, and because payment is not an essential element of wire fraud,
9
The venue provision at issue here, contained in § 3237(a) of Title 18,
states, in relevant part, that "any offense against the United States begun
in one district and completed in another, or committed in more than one
district, may be inquired of and prosecuted in any district in which such
offense was begun, continued, or completed."
10 UNITED STATES v. EBERSOLE
the payment-related wire communications could not establish venue
at their transmission points.
In rejecting Ebersole’s contention, the district court reasoned that,
where the purpose of a wire fraud scheme is to obtain money, the
crime is not complete until the perpetrator has been paid. Accord-
ingly, the court held that venue would be appropriate under § 3237(a)
in any district where wire communications had been transmitted in
paying the perpetrator, particularly if those transmittals occurred in
the normal course of the victim’s business. Applying those principles
to Ebersole’s case, the court refused to dismiss the wire fraud counts
for defective venue, because the indictment alleged that he had sought
money from the federal agencies "for services that were not what they
purported to be." The agencies had indeed paid Ebersole, and, as a
result, wire communications had been transmitted into and out of the
Eastern District of Virginia as part of the "natural sequence" of mak-
ing payment.
During Ebersole’s trial, on June 18, 2003, the court instructed the
jury that venue was proper on the wire fraud counts "if any act in fur-
therance of the wire fraud allegations occurred in the Eastern District
of Virginia," including Rosslyn, in Arlington County, and the City of
Richmond. The court explained that
[a]n offense is not complete until it’s complete, and the
offense of making — of a scheme to defraud is not complete
until there has been a victim, and in this case, the allegation
is that the government agencies were victimized, because
they let these contracts, they made the payments, they han-
dled the various invoices and documents, and within the
course of that processing, the wires were used.
Ebersole did not object to this instruction, despite being afforded sev-
eral opportunities to do so. However, Ebersole did challenge venue on
the wire fraud counts in: his pretrial motion seeking dismissal of the
indictment; his general "continuing objections" to venue, noted during
the trial on June 16, 2003, at the close of the prosecution’s case-in-
chief; and his post-trial motion for judgment of acquittal.
UNITED STATES v. EBERSOLE 11
10
Because the venue question was submitted to the jury, Ebersole’s
appellate contention is properly framed as an assertion that the court’s
venue instruction on the wire fraud counts was flawed as a matter of
law. Normally, Ebersole’s failure to specifically object to that instruc-
tion during the trial would constrain us to review its substance for
plain error only. See Fed. R. Crim. P. 30(d).11 However, a claim of
instructional error may alternatively be preserved by an objection in
a directed verdict motion made pursuant to Rule 29(a) of the Federal
Rules of Criminal Procedure, before the jury retires. See Jones v.
United States, 527 U.S. 373, 388 (1999) (citing Leary v. United
States, 395 U.S. 6, 32 (1969)).12 On June 16, 2003, at the same time
that Ebersole moved at the close of the prosecution’s case-in-chief for
judgment of acquittal on the FEMA-related false claim count, he also
noted his "continuing objections over the venue for the rest of the
charges." In these circumstances, Ebersole’s "continuing objections"
can fairly be characterized as motions under Rule 29(a) for judgment
of acquittal on each of the wire fraud counts, on the same grounds that
Ebersole had articulated in his pretrial motion seeking dismissal of the
indictment.
Ebersole therefore preserved his particularized claim of error —
i.e., that wire fraud does not constitute a "continuing offense" under
10
Submitting the venue question to the jury is an appropriate procedure
for resolving a factual dispute relating to venue. Cf. United States v.
Martinez, 901 F.2d 374, 376 (4th Cir. 1990) (observing that "proof of
venue may be so clear that failure to instruct [the jury] on the issue is not
reversible error").
11
Under Rule 30(d) of the Federal Rules of Criminal Procedure, "[a]
party who objects to any portion of the instructions . . . must inform the
court of the specific objection and the grounds for the objection before
the jury retires to deliberate." Rule 30(d) further provides that, in the
absence of such an objection, the instruction cannot be reviewed on
appeal, "except as permitted under Rule 52(b)." Rule 52(b) provides, in
turn, that "[a] plain error that affects substantial rights may be considered
even though it was not brought to the court’s attention."
12
Rule 29(a) of the Federal Rules of Civil Procedure provides that,
"[a]fter the government closes its evidence . . . , the court on the defen-
dant’s motion must enter a judgment of acquittal of any offense for
which the evidence is insufficient to sustain a conviction."
12 UNITED STATES v. EBERSOLE
§ 3237(a) — with regard to the court’s venue instruction on the wire
fraud counts. Accordingly, we review the content of that instruction
for abuse of discretion. See United States v. Higgs, 353 F.3d 281, 309
(4th Cir. 2003). By definition, a court "abuses its discretion when it
makes an error of law." United States v. Prince-Oyibo, 320 F.3d 494,
497 (4th Cir. 2003) (internal quotation marks omitted).
Contrary to Ebersole’s "continuing offense" contention, the venue
instruction on the wire fraud counts did not constitute legal error, and,
thus, the court did not abuse its discretion. That is, the court correctly
identified wire fraud as a "continuing offense," as defined in
§ 3237(a), properly tried in any district where a payment-related wire
communication was transmitted in furtherance of Ebersole’s fraud
scheme. See United States v. Kim, 246 F.3d 186, 192 (2d Cir. 2001),
cited with approval in United States v. Stewart, 256 F.3d 231, 243
(4th Cir. 2001). Indeed, Ebersole as much as concedes that wire fraud
was properly considered a continuing offense for venue purposes
under our Stewart decision. In his appellate brief, Ebersole observes
that "[t]he Kim court held, and this court has also held [in Stewart],
that wire fraud is a ‘continuing offense’ under 18 U.S.C. § 3237." We
actually held in Stewart that, under the facts presented, money laun-
dering (not wire fraud) constituted a continuing offense within the
meaning of § 3237(a). 256 F.3d at 242-44. Nonetheless, in so con-
cluding, we relied on the Seventh Circuit’s determination in Kim "that
venue was proper for a substantive wire fraud conviction as a continu-
ing offense when the defendant, although not the actual sender or
receiver of wire transmissions, caused communications to be trans-
mitted into and out of the district in which the defendant was tried."
Id. at 243 (citing Kim, 246 F.3d at 192) (internal quotation marks
omitted).
Here, the nature of the offense alleged was "the act of causing a
wire to be transmitted in furtherance of a fraud." Kim, 246 F.3d at
191. Wire communications used in making payment from the federal
agencies to Ebersole — i.e., those that "caused the fraud to bear fruit"
— were certainly "essential to the continuing offense of causing
fraudulent wires to be transmitted." Id. at 193. Each of those transmit-
tals occurred "both where it was sent and where it was received." Id.
at 191; see also United States v. Donato, 866 F. Supp. 288, 292 (W.D.
Va. 1994). Venue was therefore proper on the wire fraud charges
UNITED STATES v. EBERSOLE 13
against Ebersole if, as the district court instructed and the jury found,
he caused any payment-related wire communication to be transmitted
to or from the Eastern District of Virginia. See Kim, 246 F.3d at 192-
93 (holding venue proper on wire fraud charges in Southern District
of New York because payment-related wire communications were
transmitted to and from Manhattan bank); United States v. Goldberg,
830 F.2d 459, 465 (3d Cir. 1987) (recognizing that offenses were tri-
able in Eastern District of Pennsylvania because "wire transfer of
funds from New York to Wilmington . . . passed through the Federal
Reserve Bank in Philadelphia"). Accordingly, we reject Ebersole’s
"continuing offense" contention and approve the venue instruction
given by the court.
b.
Alternatively, Ebersole asserts that, even if wire fraud constitutes
a continuing offense for venue purposes, venue on the wire fraud
counts against him was not constitutionally permissible because he
did not intend or foresee that his scheme would cause the transmittals
into and out of the Eastern District of Virginia. Ebersole relies for that
contention on a decision of the Southern District of New York. See
United States v. Bezmalinovic, 962 F. Supp. 435, 441 (S.D.N.Y.
1997) (concluding that bank’s ministerial acts of debiting and credit-
ing accounts were insufficient to support venue on fraud charge,
because it was unintended and unforeseeable by defendant that such
acts would occur there); see also United States v. Svoboda, 347 F.3d
471, 483 (2d Cir. 2003) (recognizing that venue is proper in district
where defendant intentionally or knowingly causes act in furtherance
of charged offense to occur, or in district where it was foreseeable
such act would occur).
Unfortunately for Ebersole, he did not raise his "foreseeability"
objection to venue in a timely manner. That objection was first
asserted in the district court after Ebersole had already been convicted
by the jury, during the September 8, 2003 post-trial hearing on his
motion seeking judgment of acquittal. Meanwhile, any venue defect
based on a lack of foreseeability was apparent on the face of the
indictment. That is, without alleging that any other relevant conduct
occurred there, the indictment specified that wire communications in
furtherance of Ebersole’s fraud scheme were transmitted to and from
14 UNITED STATES v. EBERSOLE
the Eastern District of Virginia, plainly indicating that the prosecution
was relying on those transmittals to establish venue.
Because every fact giving rise to Ebersole’s present foreseeability
objection to venue clearly appeared on the face of the indictment,
Ebersole waived that objection by waiting until the post-trial proceed-
ing to raise it. See Collins, 372 F.3d at 633 (recognizing that if "the
asserted venue defect ‘is apparent on the face of the indictment’ a
defendant . . . waive[s] any objection if he fails to object prior to
trial") (quoting Melia, 741 F.2d at 71). Accordingly, without reaching
the merits of Ebersole’s foreseeability objection, we affirm Ebersole’s
convictions on the twenty-five wire fraud counts.
2.
With regard to the two false claims counts, Ebersole maintains that
the district court erroneously ruled that those offenses were suscepti-
ble to trial in any district into which the victimized federal agency
passed the subject claim, in the normal course of its business, follow-
ing the claim’s initial presentation to that agency. As explained
below, we affirm Ebersole’s convictions on the false claims counts.
a.
It is helpful to begin with a survey of the parties’ respective posi-
tions on proper venue for the false claims charges. Ebersole and the
prosecution agree that venue on those counts is controlled by our
decision in United States v. Blecker, 657 F.2d 629 (4th Cir. 1981).
However, the parties espouse competing views as to the reach of the
Blecker decision.
In Blecker, the defendant-subcontractors had prepared false claims
in Maryland and then submitted them to a contractor at its office in
Rosslyn, Virginia, knowing that the contractor would in turn present
those claims to a government office in Washington, D.C. 657 F.2d at
631. We recognized that the presentation of false claims to the gov-
ernment constitutes a continuing offense under 18 U.S.C. § 3237(a),
and we concluded that venue was proper on the facts presented in
either: (1) the district where the claims were prepared (the District of
UNITED STATES v. EBERSOLE 15
Maryland); (2) the district where the claims were presented to, or "ul-
timately came to rest with," the government (the District of Colum-
bia); or (3) under a "pass through" theory, the district where the
claims were submitted to the intermediary-contractor by the defen-
dants, knowing that the intermediary would then present the claims
to the government (the Eastern District of Virginia). Id. at 632-33 (cit-
ing United States v. Candella, 487 F.2d 1223, 1227-28 (2d Cir. 1973))
(other citations omitted); see also United States v. Barsanti, 943 F.2d
428, 434-35 (4th Cir. 1991) (applying Blecker "pass through" ratio-
nale in assessing proper venue on charges of presenting false state-
ments to the government, in violation of 18 U.S.C. § 1001).
Ebersole maintains on appeal that our Blecker decision stands for
the principle that false claims charges are triable exclusively in those
districts in which: (1) the defendant prepared the claim; (2) the claim
was initially presented to the government by the defendant or an inter-
mediary; or (3) the claim was submitted to an intermediary by the
defendant, who possessed knowledge that the intermediary would
then present it to the government. Under Ebersole’s view, venue
would have been proper on the State Department-related count in the
District of Columbia (where both Ebersole submitted that claim to
Intercon, and Intercon in turn presented it to the State Department),
and on the FEMA-related count in the Western District of Virginia
(where Ebersole initially presented that claim to FEMA, at its Berry-
ville post office box).13 Ebersole insists that, under Blecker, venue
was defective in the Eastern District of Virginia on each of the false
claim charges, because those claims passed through that district only
after they had already been presented to the respective federal agen-
cies and, thus, his offenses had already been completed.
By contrast, the prosecution endorses a more expansive interpreta-
tion of Blecker. The prosecution relies on our statement in Blecker
that venue would be proper on a false claim charge in the district
where the subject claim "ultimately came to rest" with the victimized
federal agency. See Blecker, 657 F.2d at 632. The prosecution main-
13
Ebersole also acknowledges that venue would have been appropriate
on each of the false claims counts in the district where he prepared the
subject claim, which he identifies as either the Western District of Vir-
ginia or the District of Maryland.
16 UNITED STATES v. EBERSOLE
tains that, in view of that language, a false claim charge is potentially
triable in more districts than those allowed by Ebersole. Such districts
include any district where the agency (a) ultimately authorized pay-
ment of the claim following its initial presentation, or (b) processed
the claim between its initial presentation and the final payment autho-
rization. As further support for its position, the prosecution points to
the Second Circuit’s Candella decision, which we relied on in
Blecker, and which concluded that venue was proper on a false state-
ment charge in the Southern District of New York as the place where
"the decision was reached to make the funds available," even though
the false statement at issue had initially been presented to the govern-
ment elsewhere. See Candella, 487 F.2d at 1228. Under the prosecu-
tion’s view, venue was proper in the Eastern District of Virginia on
the false claims charges against Ebersole because (a) the State Depart-
ment authorized payment in Rosslyn, Arlington County, of one claim
following its initial presentation in the District of Columbia, and (b)
FEMA processed the other claim on Mount Weather, in Loudoun
County, between the claim’s initial presentation in the Western Dis-
trict of Virginia and the final payment authorization in New York.
b.
The prosecution has urged its broad interpretation of Blecker since
at least April 14, 2003, when it filed its response to Ebersole’s pretrial
motion seeking dismissal of the indictment. Ebersole challenged the
prosecution’s reliance on Blecker on various legal and factual grounds
during the pretrial proceedings. Unpersuaded, the district court denied
Ebersole’s pretrial motion following the May 2, 2003 hearing.
During the trial, on June 16, 2003, Ebersole made his motion for
judgment of acquittal on the FEMA-related count, pursuant to Rule
29(a) of the Federal Rules of Criminal Procedure. After the court
denied his Rule 29(a) motion, Ebersole raised his "continuing objec-
tions over the venue for the rest of the charges," presumably including
the State Department-related false claim count. The following day,
June 17, 2003, Ebersole filed a short written objection to the prosecu-
tion’s proposed venue instruction on the false claims charges, which
had been submitted to the court prior to the trial. The instruction
explained that venue was proper on those counts if "any act in further-
ance of the crime . . . occurred within the Eastern District of Vir-
UNITED STATES v. EBERSOLE 17
ginia," including Loudoun County and Rosslyn, in Arlington County.
The instruction also stated that
it is sufficient for venue purposes if the claim that allegedly
was false passed through the Eastern District of Virginia
before coming to the final office where it was paid. It is
equally sufficient for venue purposes if the claim that alleg-
edly was false was submitted initially to a department or
agency located in another judicial district, an[d] then, in the
normal course of business, was sent to an office within the
Eastern District of Virginia for payment.
During the charge conference conducted by the district court on June
18, 2003, the court overruled Ebersole’s objection to the prosecu-
tion’s venue instruction and incorporated it into the charge delivered
to the jury later that same day.
The views espoused by Ebersole before and during trial were not
nearly as thorough and clear as his much more particularized and
coherent post-trial contentions with regard to the scope of proper
venue under Blecker. Nonetheless, Ebersole’s Rule 29(a) motion and
objection to the prosecution’s venue instruction, along with his pre-
trial motion and "continuing objections" to venue at the Rule 29
motion stage, were sufficient to preserve his appellate challenge to the
substance of the instruction. See Fed. R. Crim. P. 30(d) (requiring
party who objects to instruction to timely inform court of specific
objection and grounds for objection); see also Jones, 527 U.S. at 388(recognizing claim of instructional error may be preserved by objec-
tion in Rule 29(a) motion (citing Leary, 395 U.S. at 32)). In particu-
lar, Ebersole contended in his Rule 29(a) motion (as he does on
appeal) that his FEMA-related false claim offense was complete once
he mailed the subject invoice to FEMA’s post office box in Berry-
ville, and that "the mere fact that the government then has a distribu-
tion system that brings it into the Eastern District is insufficient to
confer venue." That contention extends to the State Department-
related count, which offense Ebersole asserts was complete once
Intercon presented his claim to the State Department in Washington,
D.C.
Therefore, we review the substance of the venue instruction on the
false claims counts for abuse of discretion. See Higgs, 353 F.3d at18 UNITED STATES v. EBERSOLE
309. And we recognize, once again, that a court "abuses its discretion
when it makes an error of law." Prince-Oyibo, 320 F.3d at 497 (inter-
nal quotation marks omitted).
c.
Ebersole’s appellate contention causes us to consider an issue of
first impression: whether, as Ebersole’s jury was instructed, venue on
a false claim charge may be proper in a district into which the victim-
ized government agency had passed the subject claim after its initial
presentation to that agency (either by the defendant or an intermedi-
ary). For the reasons that follow, we conclude that the court’s venue
instruction correctly stated the law and, thus, did not constitute an
abuse of discretion.
We look, of course, to Blecker. The parties’ competing interpreta-
tions of Blecker (including its reference to proper venue in the district
where a false claim "ultimately came to rest" with the government)
are possible because that case did not involve an agency internally
passing a false claim from district to district after its initial presenta-
tion directly to that agency. See 657 F.2d at 632. Rather, Blecker
focused on an issue that is factually distinct from that before us here:
whether venue was proper in the district where the defendants submit-
ted false claims to an intermediary, knowing that the intermediary
would in turn present the claims to the government. See id. at 631-33(concluding that venue was proper in such circumstances under a
"passing through" theory). Nonetheless, Blecker provides us with
ample guidance.
First of all, it was determined in Blecker that a violation of the false
claims statute may be treated as a "continuing offense" under 18
U.S.C. § 3237(a) for purposes of establishing venue in more than one
district. 657 F.2d at 632. Furthermore, Blecker identified the acts con-
stituting a false claim offense as the "mak[ing]" and, more signifi-
cantly for our present purposes, the "present[ation]" of a false claim
to the government. Id. (recognizing that false claims statute "provides
that any person who ‘makes or presents’" false claim to government
is guilty of crime, and thus that venue lies to prosecute violator of
statute in either "district in which the claims were made or prepared,"
UNITED STATES v. EBERSOLE 19
14
or "one in which they were presented to the government"). The issue
here is whether, in view of the undisputed facts regarding the move-
ment of Ebersole’s false claims, those claims were "presented" to the
government in the Eastern District of Virginia.
We already know, as demonstrated in Blecker, that a false claim
may be "presented" in more than one district. That is, Blecker recog-
nized that venue was proper in both the district where false claims
were presented to an intermediary, and the district where the interme-
diary presented the claims to the government. 657 F.2d at 633.
Indeed, in Barsanti, where the "passing through" theory was extended
to false statement offenses under 18 U.S.C. § 1001, the sequential
presentations of the false claims in Blecker were described as the
basis for that theory. See Barsanti, 943 F.2d at 434 (citing Blecker,
657 F.2d at 632-33).
While the facts of Blecker are different than those presented here,
the distinctions are without legal consequence. In Blecker, the false
claims at issue were "presented" twice, thus establishing venue in two
different districts based on the locations of the presentations of the
claims. It necessarily follows, therefore, that Ebersole’s false claims
could be "presented" multiple times. As nothing in Blecker compels
a contrary conclusion, it is of no significance that the false claims
there were presented directly to the targeted federal agency just once
(by the intermediary), and that Ebersole’s false claims were presented
directly to the agencies multiple times (as they passed the claims
internally in the course of processing them for payment).
We are persuaded to this conclusion by the Second Circuit’s deci-
sion in Candella, in which we found support in Blecker for our "pass-
ing through" theory. See Blecker, 657 F.2d at 633. We observed in
Blecker that, "[p]resented with a similar factual situation, the Second
Circuit has implied that venue is proper in either the district in which
the false claim is submitted to the intermediary or the district in which
the intermediary transmits the false claim to the agency." Id. (citing
Candella, 487 F.2d at 1227-28).
14
That is, the making and the presentation of a false claim are the "es-
sential conduct elements" of the false claim offense. See Bowens, 224
F.3d at 311.
20 UNITED STATES v. EBERSOLE
The Candella defendants, who owned a moving company, were
prosecuted in the Southern District of New York for filing false state-
ments within the jurisdiction of the United States Department of
Housing and Urban Development ("HUD"), in contravention of 18
U.S.C. § 1001. 487 F.2d at 1224-25. The defendants sought reim-
bursement from a joint urban renewal project between New York City
and HUD, which was administered by the City and wholly funded by
the federal government. Id. at 1226. The defendants’ false statements
had been "prepared, executed and handed to New York City officials
in Brooklyn," in the Eastern District of New York. Id. at 1227. Those
statements then had been variously conveyed for examination and
payment authorization to City and HUD offices in Manhattan, in the
Southern District of New York. Id.
The defendants contended that they should have been prosecuted
in the Eastern District of New York, instead of the Southern District.
Candella, 487 F.2d at 1227. The Second Circuit concluded, however,
that venue was proper in each of those districts, invoking 18 U.S.C.
§ 3237(a) (establishing venue on continuing offenses). Id. at 1228("Although enough was done in the Eastern District to constitute a
crime there . . . , it does not follow that the crime then terminated, and
that what transpired in Manhattan was irrelevant for venue purposes."
(internal citations omitted)). The court observed "that venue is prop-
erly laid in ‘the whole area through which force propelled by an
offender operates.’" Id. (quoting Johnson, 323 U.S. at 275). And the
court reasoned that
[t]he force propelled here by the defendants immediately
contemplated Manhattan. 18 U.S.C. § 1001 defines the
offense as the making of a false or fraudulent statement or
representation in a matter within the jurisdiction of a federal
agency. The false statements here were intended to produce
funds. The statements continued to be false and continued
to be within the jurisdiction of the United States not only
when initially presented but also upon arrival in Manhattan,
where the decision was reached to make the funds available.
Venue for all counts thus was properly laid in the Southern
District of New York.
Id. (internal citation omitted).
UNITED STATES v. EBERSOLE 21
Significantly, the venue dispute in Candella, which we found to be
similar to that presented in Blecker, is actually more analogous to this
dispute. That is, the Candella defendants, like Ebersole, challenged
venue in a district into which the victimized federal agency had itself
passed the false statement or claim after its initial presentation
directly to that agency.15 One of Ebersole’s false claims was initially
presented to the State Department by Intercon, as an intermediary, in
Washington, D.C. The State Department’s Washington office began
the processing of the claim, and then forwarded it to the agency’s
Rosslyn office, in the Eastern District of Virginia, for final payment
authorization. Ebersole submitted his other false claim directly to
FEMA at its Berryville, Virginia post office, where it was retrieved
by FEMA and taken for further action to its nearby mail processing
center on Mount Weather in Loudoun County, in the Eastern District
of Virginia. FEMA representatives subsequently handled the claim at
offices in Berryville and New York in the course of processing it for
payment.
In these circumstances, venue was proper on each of the false
claims counts in the Eastern District of Virginia, as one of several dis-
tricts "through which force propelled by [Ebersole] operate[d]" as the
claims proceeded through the necessary channels on their way to pro-
ducing funds. Candella, 487 F.2d at 1227 (internal quotation marks
omitted). That is, Ebersole’s State Department-related claim was
"presented" in the Eastern District of Virginia (in addition to the Dis-
trict of Columbia), and his FEMA-related claim was "presented" in
the Eastern District of Virginia (as well as the Western District of Vir-
ginia and the district encompassing FEMA’s office in New York). See
Blecker, 657 F.2d at 632. Because the district court’s venue instruc-
tion on the false claims charges adequately reflected these legal prin-
ciples, the instruction did not constitute an abuse of discretion.
15
Although the Candella defendants’ false statements were initially
presented in the Eastern District of New York to City officials acting on
behalf of the federal government, there was no issue that the City was
an "intermediary" or that venue in the Eastern District would have been
improper (as would render the issues in Candella more like those raised
in Blecker).
22 UNITED STATES v. EBERSOLE
Therefore, we affirm Ebersole’s convictions on the two false claims
counts.16
III.
A.
On September 8, 2003, after denying Ebersole’s post-trial motion
seeking judgment of acquittal, the district court proceeded to sentence
him pursuant to the Sentencing Guidelines. In determining Ebersole’s
sentencing range, the court grouped the twenty-seven wire fraud and
false claims counts together. See USSG § 3D1.2(d) (2002) (providing
for grouping of counts when offense level is determined on basis of
aggregate harm). Ebersole’s base offense level for the grouped counts
was level 6. Id. § 2B1.1(a) (establishing base offense level for crimes
involving fraud and deceit). The court then applied various enhance-
ments to Ebersole’s offense level, including a two-level enhancement
for abuse of a position of trust. Id. § 3B1.3 (directing court to apply
two-level increase "[i]f the defendant abused a position of public or
private trust, or used a special skill, in a manner that significantly
facilitated the commission or concealment of the offense").17
16
We acknowledge that Ebersole raises on appeal other contentions of
trial error, including that: (1) the district court abused its discretion in
admitting certain evidence of prior bad acts, and in denying Ebersole’s
motion for mistrial; (2) the court erred in denying his motion to suppress
evidence based on an allegedly improper search warrant; (3) the court
abused its discretion in limiting Ebersole’s use before the jury of a video-
tape purporting to show him administering an odor recognition test to his
bomb-sniffing dogs; and (4) the prosecution violated Ebersole’s rights
under Brady v. Maryland, 373 U.S. 83 (1963), by failing to timely dis-
close mistakes made in administering tests to Detector Dogs canine
teams. We have carefully considered those contentions and conclude that
they are without merit.
17
The other enhancements included: a 14-level increase for a loss or
intended loss of $906,804, USSG § 2B1.1(b)(1)(H) (2002); a two-level
increase for an offense involving conscious or reckless risk of death or
serious bodily injury, id. § 2B1.1(b)(11); and a two-level increase for
obstruction of justice, id. § 3C1.1.
UNITED STATES v. EBERSOLE 23
Ebersole’s final adjusted offense level was level 26, and he quali-
fied for a criminal history category of I. Accordingly, the applicable
sentencing range was sixty-three to seventy-eight months of imprison-
ment. The statutory maximum prison term deemed applicable to Eber-
sole on any one of the wire fraud or false claims counts was sixty
months. See 18 U.S.C. § 287 (2000); 18 U.S.C. § 1343 (2000). The
court imposed consecutive prison terms of eighteen months on one of
the BOG-FED-related wire fraud counts and sixty months on the
remaining twenty-six counts, for a total prison term of seventy-eight
months (the high end of the Sentencing Guidelines range).18 Without
the various enhancements to his offense level — each of which was
based upon facts found by the district court, not by the jury — the
applicable sentencing range would have been zero to six months of
imprisonment.
On April 28, 2004, Ebersole filed his opening appellate brief, in
which he contends that the district court erroneously applied the
enhancement for abuse of a position of trust, as well as the enhance-
ment for an offense involving conscious or reckless risk of death or
serious bodily injury. The Supreme Court subsequently rendered its
decision in Blakely v. Washington, 124 S. Ct. 2531, 2537-38 (2004)
(holding that sentence imposed under Washington State sentencing
scheme violated Sixth Amendment because it was enhanced based on
judge-found facts). Ebersole thereafter filed a motion to remand this
case to the district court for further proceedings or, in the alternative,
for leave to file a supplemental brief addressing Blakely.
By Order of August 18, 2004, we denied Ebersole’s motion to
remand; granted his motion to file a supplemental brief, deeming the
motion to be the supplemental brief; and denied his Blakely claim on
its merits in light of our Order of August 2, 2004 in United States v.
Hammoud, 378 F.3d 426 (4th Cir. 2004) (determining that Blakely did
not operate to invalidate sentence imposed under federal Sentencing
Guidelines), opinion issued by 381 F.3d 316, 353-54 (4th Cir. 2004)
(en banc). Since then, however, the Supreme Court has applied its
reasoning in Blakely to the Sentencing Guidelines, see Booker, 125 S.
Ct. at 746, and has granted certiorari in Hammoud and vacated our
18
The court also ordered Ebersole, inter alia, to pay restitution of
$708,458.78.
24 UNITED STATES v. EBERSOLE
judgment therein, see 73 U.S.L.W. 3436, 2005 WL 124093 (U.S. Jan.
24, 2005) (No. 04-193).
B.
In reviewing Ebersole’s sentence, we first re-examine, in light of
Booker, his contention that his sentence violated the Sixth Amend-
ment. Next, we consider the propriety of the contested sentencing
enhancements. As set forth below, we conclude that Ebersole is enti-
tled to resentencing under Booker, and that the enhancement for abuse
of a position of trust is improper in the present circumstances.
1.
Ebersole raised the Sixth Amendment challenge to his sentence for
the first time on appeal. Therefore, with regard to that contention, we
review his sentence for plain error under the familiar Olano mandate.
See Olano, 507 U.S. at 732; see also United States v. Hughes, 401
F.3d 540, 547 (4th Cir. 2005). The Olano conditions are satisfied
here.
First, the district court’s imposition of the seventy-eight-month
sentence constituted error under Booker. See 125 S. Ct. at 746 (hold-
ing Sixth Amendment contravened when sentencing court, acting pur-
suant to Guidelines, imposes sentence greater than maximum
authorized by facts found by jury alone). Under the then-mandatory
Guidelines regime, the jury verdict supported an offense level of 6,
resulting in a sentencing range of zero to six months. However, that
jumped to an offense level of 26 — carrying a sentencing range of
sixty-three to seventy-eight months — because of the application of
various enhancements based on facts found solely by the sentencing
judge. Thus, as Booker has taught us, the court erred in relying on its
own fact-finding to impose a sentence of greater than six months. See
Hughes, 401 F.3d at 547 (recognizing that imposition of sentence, "in
part based on facts found by the judge, . . . constituted error").
Second, although Ebersole’s Sixth Amendment contention was
foreclosed by our precedent at the time of his sentencing, Booker has
since "abrogated our previously settled law," rendering the error plain.
UNITED STATES v. EBERSOLE 25
Hughes, 401 F.3d at 547-48. And third, the error was prejudicial, in
that Ebersole’s seventy-eight-month sentence was greater — by
seventy-two months — than the six-month maximum authorized by
the facts found by the jury alone. See id. at 548-49.
Finally, to affirm Ebersole’s sentence despite the error would seri-
ously affect the fairness, integrity, or public reputation of the judicial
proceedings. In the wake of Booker, as we have recognized, the
Guidelines are to be treated as advisory, rather than mandatory, and
sentences that fall within the statutorily prescribed range are review-
able only for reasonableness. Hughes, 401 F.3d at 546 (citing Booker,
125 S. Ct. at 765-68). The record before us does not indicate what
sentence the court would have imposed on Ebersole had its exercised
its discretion under 18 U.S.C. § 3553(a) and treated the Guidelines as
merely advisory; although it is possible that Ebersole will receive the
same sentence on remand, "[t]his possibility is not enough to dissuade
us from noticing the error." Id. at 556. We therefore exercise our dis-
cretion to notice the error, vacate Ebersole’s sentence, and remand for
resentencing consistent with Booker and its progeny.
2.
Under the first step of the Booker remedial scheme, a court must
determine the range prescribed by the Sentencing Guidelines after
making any necessary findings of fact. See Hughes, 401 F.3d at 556.
As a result, the same calculation issues raised in this appeal by Eber-
sole are likely to arise again upon remand. See id. We therefore
choose to address Ebersole’s contentions that the district court
improperly applied two particular enhancements to his sentence under
the Guidelines. Id. And we express our agreement with the more com-
pelling of those contentions: that the court misapplied the enhance-
ment for abuse of a position of trust, under United States Sentencing
Guidelines Manual § 3B1.3 (2002).
The § 3B1.3 enhancement had been recommended in Ebersole’s
presentence report ("PSR") on the following grounds:
The defendant represented himself to various contract offi-
cers as an EOD handler certified by State and federal regu-
lating agencies. Based on his spoken and written assertions
26 UNITED STATES v. EBERSOLE
that he occupied a certified position of public trust, he was
contracted to provide EOD services for three federal agen-
cies. Mr. Ebersole abused that perceived position of trust to
enrich himself.
The court adopted the PSR’s recommendation and imposed the
enhancement over Ebersole’s objection. We review de novo the dis-
trict court’s legal interpretation of what constitutes "a position of
trust" under § 3B1.3, and we review its factual findings for clear
error. See Hughes, 396 F.3d at 382; see also United States v.
Caplinger, 339 F.3d 226, 235-36 (4th Cir. 2003).
A defendant deserves the two-level increase in his offense level
under § 3B1.3 "if the district court ‘determines that [he] abused a
position of trust and that abuse significantly contributed to the com-
mission or concealment of the crime.’" Caplinger, 339 F.3d at 235(quoting United States v. Akinkoye, 185 F.3d 192, 203 (4th Cir.
1999)) (alteration in original). The sometimes difficult inquiry into
what constitutes a "position of trust" is guided to some extent by the
commentary to § 3B1.3 and, as we have emphasized, "must focus on
the relationship between the defendant and the victim from the per-
spective of the victim." Id. at 236 (citing United States v. Gordon, 61
F.3d 263, 269 (4th Cir. 1995)) (other citations omitted).
We have cautioned in fraud cases in particular — where every
defendant will have gained the confidence and trust of the victim —
that fraud alone cannot justify the § 3B1.3 enhancement. Caplinger,
339 F.3d at 236-37 (citing United States v. Bollin, 264 F.3d 391, 415
(4th Cir. 2001)). Instead, the term "position of public or private trust"
in § 3B1.3 "is a term of art, appropriating some of the aspects of the
legal concept of a trustee or fiduciary." Id. at 237 (internal quotation
marks omitted); see also USSG § 3B1.3, comment. (n.1) (2002)
(explaining that enhancement applies, for example, "in the case of an
embezzlement of a client’s funds by an attorney serving as a guardian,
a bank executive’s fraudulent loan scheme, or the criminal sexual
abuse of a patient by a physician under the guise of an examination").
"In other words, application of the enhancement requires more than
a mere showing that the victim had confidence in the defendant.
Something more akin to a fiduciary function is required." Caplinger,
339 F.3d at 237 (internal quotation marks omitted).
UNITED STATES v. EBERSOLE 27
Here, the court accepted as true the facts set forth in the PSR. How-
ever, those facts do not support the imposition of the § 3B1.3
enhancement. That is, the PSR states that representatives of the vic-
timized federal agencies, in awarding contracts to Detector Dogs,
relied on Ebersole’s assertions that he was certified by state and fed-
eral regulating agencies as a bomb-sniffing canine team handler.
Accordingly, the PSR describes an "‘arms-length commercial rela-
tionship[ ] where trust is created by the defendant’s personality or the
victim’s credulity,’" which cannot justify the § 3B1.3 enhancement.
Caplinger, 339 F.3d at 237 (quoting Bollin, 264 F.3d at 415). The
PSR does not set forth any facts indicating a fiduciary relationship
between Ebersole and the federal agencies, as would support the
enhancement. Cf. United States v. Glymph, 96 F.3d 722, 727-28 (4th
Cir. 1996) (affirming application of § 3B1.3 enhancement against
government contractor who had held position of trust by virtue of
being allowed to self-certify compliance with purchase order require-
ments). In the present circumstances, the court erred in enhancing
Ebersole’s sentence for abuse of a position of trust.19
19
By contrast, we cannot say that the court misapplied the two-level
enhancement for an offense involving conscious or reckless risk of death
or serious bodily injury, under United States Sentencing Guidelines Man-
ual § 2B1.1(b)(11) (2002). At the outset, we observe that because Eber-
sole did not object at sentencing to the § 2B1.1(b)(11) enhancement, it
is subject to only plain error review. See United States v. Bros. Constr.
Co. of Ohio, 219 F.3d 300, 320 (4th Cir. 2000). Moreover, we have rec-
ognized that the "reckless endangerment" enhancement may apply to per-
petrators of offenses involving fraud or deceit under appropriate
circumstances. See, e.g., United States v. Turner, 102 F.3d 1350, 1359
(4th Cir. 1996) (affirming enhancement where defendants, despite myr-
iad of safety problems experienced over years by their coal company and
general danger of underground mining, failed to provide miners with
required annual training and falsified relevant records).
As with the enhancement for abuse of a position of trust, the court
imposed the reckless endangerment enhancement on recommendation of
the PSR, which maintained that "sending ill-prepared dogs and handlers
to patrol public buildings for explosive devices created a hazard to
[Detector Dogs’s] employees, as well as to the employees of the federal
agencies affected." Ebersole contends that the enhancement was
improper, because there were no injuries or deaths associated with his
28 UNITED STATES v. EBERSOLE
IV.
Pursuant to the foregoing, we affirm Ebersole’s convictions, vacate
his sentence, and remand to the district court for resentencing.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED
MICHAEL, Circuit Judge, concurring in part and dissenting in part:
I agree with most of the majority’s opinion and therefore concur in
parts II.A, II.B.1, and III. I respectfully dissent, however, from the
majority’s determination in part II.B.2 that venue was proper in the
Eastern District of Virginia for the two false claims counts. See ante
at 14-22. Because no part of the conduct that would constitute a false
claims offense occurred in the Eastern District of Virginia, venue for
the two counts was not proper there.
Under the Sixth Amendment a defendant has the right to be tried
in the district in which the crime was committed. U.S. Const. amend.
VI. "When . . . the statute defining the substantive offense does not
indicate where Congress considered the place of committing the
crime to be, the [place of the crime] must be determined from the
nature of the crime alleged and the location of the act or acts consti-
tuting it." United States v. Blecker, 657 F.2d 629, 632 (4th Cir. 1981)
(internal quotation marks and citation omitted). In assessing venue, "a
court must initially identify the conduct constituting the offense (the
nature of the crime) and then discern the location of the commission
conduct, and there was no evidence that any terrorist explosives entered
onto the property that the Detector Dogs canine teams were supposed to
protect. Ebersole’s contention lacks merit, as the § 2B1.1(b)(11)
enhancement depends on "risk" of death or serious bodily injury, not
actual death or bodily injury. See Turner, 102 F.3d at 1359 (recognizing
that fact that no mine accidents were directly attributable to lack of train-
ing did not render defendants’ conduct any less reckless). We agree with
the prosecution that, "[g]iven the deadly nature of the threat that Eber-
sole’s EOD dog teams were deployed to counter, it was no error at all
for the district court to apply this enhancement." (Appellee’s Br. at 54.)
UNITED STATES v. EBERSOLE 29
of the criminal acts." United States v. Rodriguez-Moreno, 526 U.S.
275, 279 (1999).
The false claims statute provides that any person who knowingly
"makes or presents" a false claim to an "agency or department" of the
United States is guilty of a crime. 18 U.S.C. § 287. Moreover, a per-
son who "willfully causes an act to be done which if directly per-
formed by him or another would be an offense against the United
States, is punishable as a principal." Id. § 2(b). The false claims stat-
ute thus prohibits not only the direct submission of a false claim to
a federal agency but also the submission of a false claim to an agency
through the use of an intermediary or agent. See Blecker, 657 F.2d at
633-34.
The majority correctly recognizes (1) that the conduct constituting
a § 287 offense is the presentation of a false claim to an agency and
(2) that the venue issue here turns on whether the false claims were
presented to an agency in the Eastern District of Virginia. See ante at
18-19. Ebersole submitted one allegedly false claim to the Federal
Emergency Management Agency (FEMA) in the Western District of
Virginia and a second one to the Department of State in Washington,
D.C. These agencies then forwarded the claims for processing to
agency branch offices located in the Eastern District of Virginia. No
one disputes that venue would have been proper in the district where
Ebersole presented the claim to the particular agency, the Western
District of Virginia for one and Washington, D.C., for the other.
According to the majority, however, the false claims were again pre-
sented to the two agencies when the agencies forwarded the claims to
their branch offices in the Eastern District of Virginia. The majority
thus concludes that the offenses were also committed in the Eastern
District of Virginia, making venue proper there as well. I respectfully
disagree because the plain meaning of "present" forecloses a conclu-
sion that the claims were again presented to the agencies when the
agencies themselves transferred them to branch offices.
The word "present" means to "deliver formally for acceptance."
Webster’s Third New International Dictionary 1793 (1993). This defi-
nition indicates that an item is presented only when a person or entity
delivers it to a different person or entity. Thus, the conduct constitut-
ing the offense of presenting a false claim does not include an agen-
30 UNITED STATES v. EBERSOLE
cy’s transfer of the claim to one of its branch offices because the
branch office is part of the agency itself. Put another way, an agency
cannot present, or deliver formally for acceptance, a false claim to
itself. For this reason, FEMA’s and the Department of State’s trans-
fers of Ebersole’s claims to branch offices located in the Eastern Dis-
trict of Virginia were not presentations of false claims to the agencies.
Accordingly, no conduct constituting the offense occurred in that dis-
trict.
Our decision in United States v. Blecker does not help the majority.
In that case we concluded that venue was proper (1) in the district
where the defendants delivered the false claims to a private intermedi-
ary who, in turn, was to submit them to a government agency located
in another district and (2) in the district where the private intermedi-
ary submitted the claims to the agency. Blecker, 657 F.2d at 632-33.
According to the majority, Blecker establishes "that Ebersole’s false
claims could be ‘presented’ multiple times," and "it is of no signifi-
cance that the false claims [in Blecker] . . . were presented directly
to the targeted federal agency just once (by the intermediary), and that
Ebersole’s false claims were presented directly to the agencies multi-
ple times (as they passed the claims internally in the course of pro-
cessing them for payment)." Ante at 19. Blecker, however, is entirely
different from Ebersole’s case because the defendants in Blecker sub-
mitted the false claims to a private intermediary. When the private
intermediary, in turn, submitted the claims on behalf of the defendants
to the government agency, the intermediary’s act was part of the con-
duct constituting the offense, that is, the presentation of false claims
to an agency. See 18 U.S.C. § 287. In contrast, when the agencies in
the present case transferred Ebersole’s false claims to branch offices,
the transfers were not conduct constituting the offense because an
agency cannot present a claim to itself. Although Ebersole’s presenta-
tion of his claims may have triggered a process in which one branch
of an agency transferred the claim to another branch, such intra-
agency transfer is not criminal conduct covered under the false claims
statute.
The majority’s decision in part II.B.2 is disquieting because it will
allow the government to maneuver venue to its advantage in a false
claims prosecution. After today, a defendant who submits a false
claim in one district may be tried in any district where the claim
UNITED STATES v. EBERSOLE 31
might be routed by the agency during processing and payment. This
is at odds with the principle that "the venue provisions of the Consti-
tution are meant to act as safeguards, protecting the defendant from
bias, disadvantage, and inconvenience in the adjudication of the
charges against him." Ante at 8.
The district court submitted the false claims venue question to
Ebersole’s jury with the following instruction: "it is sufficient for
venue purposes if the claim that allegedly was false passed through
the Eastern District of Virginia before coming to the final office
where it was paid." Record at 1986. This instruction is directly con-
trary to the simple fact that an agency cannot present a false claim to
itself under § 287. I would therefore vacate Ebersole’s conviction on
the two false claims counts and remand for the dismissal of these
counts without prejudice.