United States v. Ediger

166 F. App'x 218
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 14, 2006
Docket05-5350
StatusUnpublished
Cited by1 cases

This text of 166 F. App'x 218 (United States v. Ediger) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Ediger, 166 F. App'x 218 (6th Cir. 2006).

Opinion

PER CURIAM.

Defendant Joanna L. Ediger worked for the Tennessee Department of Labor (TDOL) as the Director of the TDOL’s Division of Employment and Training. While working for the TDOL, Ediger helped Workforce Strategists LLC (WFS) win a no-bid contract with the TDOL to provide mental health related services to chronically unemployed workers. After she resigned from the TDOL, Ediger worked for and obtained an ownership interest in WFS.

The United States charged Ediger with one count each of mail and wire fraud for her participation in an alleged scheme to award WFS a contract for her own personal gain. Following a six-day trial, a jury convicted her of both counts and the dis *220 trict court sentenced her to a 36-month term of imprisonment and two years of supervised release. Ediger appeals her convictions and her sentence. After careful review of the record, we conclude that there was sufficient evidence to support her convictions and that the district court did not err in imposing her sentence. Therefore, we affirm.

I.

Ediger was the Director of the Division of Employment and Training from July 1998 to August 1999. That division was responsible for administering millions in federal grant money for the education and training of unemployed workers in Tennessee. Ediger oversaw a staff of about 35 employees, and she reported to one of two Deputy Commissioners, each of whom reported to the Commissioner of the TDOL, Mike Magill.

In late summer or early fall 1998, Ediger and TDOL Deputy Commissioner Chip Smith met with Commissioner Magill to discuss entering a sole source contract with a company run by John Stamps, a lobbyist and personal friend of the governor, to provide mental heath-related services for chronically dislocated workers. A “sole source” contract is referred to in the Department of Finance and Administration (DF & A)’s written rules for the approval of contracts. Under those rules, there are only three permissible methods of obtaining a services contract: (1) the “Request for Proposal” process, whereby bids were solicited from vendors through a written solicitation and then competitively evaluated; (2) “Verbal Competitive Negotiation,” whereby the competitive process could be handled verbally if the total value of services did not exceed $500; and (3) “Sole Source Negotiation,” whereby the contract could be negotiated verbally with a single vender “in lieu of competitive negotiation only where competitive negotiation would not be feasible or practicable, as in the following cases: (i) The service required is available from only one person or firm; (ii) The contract is with another governmental unit or state agency.”

To request a sole source negotiation, departments were required to provide DF & A a memorandum setting forth a “description of the services to be procured” and a “statement of the means of negotiation the state agency intends to employ and the justification for that choice.... ” DF & A could then approve the request for sole source authorization based upon necessity and compliance with the procedures. Id.

Magill authorized Ediger to investigate whether there was justification for a sole source contract with WFS. Ediger prepared a sole source justification memo on about January 19, 1999 for Magill’s signature requesting that DF & A authorize TDOL to enter into a contract with WFS. The memo stated that WFS was “the only company in Tennessee that has experience developing a program similar in scope.” Magill signed the memo and had it forwarded to DF & A for review.

The Director of Contracts Review for the DF & A, Robert Barlow, sent a memo to Magill on February 19, 1999, indicating that his department needed more information on whether WFS was the only company, not just in Tennessee but anywhere, that could provide the service. Ediger prepared a second sole source justification memo for Magül’s signature on June 2, 1999. This second memo stated that other potential vendor programs assisted in job searches but did not include the mental health component that WFS could provide. The memo again claimed that WFS was “the only company in Tennessee that has experience developing and implementing a program similar in scope, with perform *221 ance-based guarantees, performance based payments and with the capacity to handle the hard to serve type of customer.” Id. Magill signed the memo and forwarded it to the DF & A. Robert Barlow contacted TDOL General Counsel Martha Staley to inform her that the second memo did not address his concern raised in his February 7,1999 response to the first memo. Staley in turn contacted Deputy Commissioner Chip Smith to inform him of the need for further information.

Ediger prepared a third sole source memo on July 15, 1999, in which she stated that she and Chip Smith met with a vendor from Maryland, 1 but that they could not meet the necessary time line and their price was three times that of WFS’s. She forwarded the memo to Staley, who forwarded it to Barlow at the DF & A.

Contrary to Ediger’s assertions in her three memos regarding WFS’s experience, WFS had no experience because it was not yet an operational business when Ediger wrote the memos. Around April 1999, John Stamps began discussing the potential creation of a company that would provide psychiatric and group counseling for chronically unemployed persons. In May, Stamps contacted his corporate lawyer about options for creating WFS as a business entity and on May 26, 1999, Articles of Organization for WFS were mailed to the Tennessee Secretary of State’s Office for registration. Marcus Burrows, a registered psychiatric nurse who also held a master’s degree in business administration, was identified as the Chief Manager and President of WFS and was given a 10% ownership interest. Burrows worked from May until the fall preparing WFS to open for business. It was not until October 1999, after Burrows had been notified that the TDOL contract was approved, that he leased office space, office equipment, and hired a counselor and receptionist. WFS did not open for business until November of 1999.

The same day that Ediger completed the third sole source memo, she informed her superiors that she was resigning to accept a teaching position at Vanderbilt University. She asked to transition out of her position by July 31 because of her August 15 “report date” at Vanderbilt, but she stated that she would be willing to work with TDOL “in whatever capacity is needed in between classes.” She worked at TDOL until August 13,1999.

On August 3, 1999, DF & A approved the TDOL’s request to negotiate a sole source contract with WFS “based on the information that was provided.” Soon after her departure from the TDOL, while WFS and TDOL were negotiating their contract, Ediger began “consulting” work for WFS. In September, she had her sister prepare a logo for WFS. Also in September, Stamps introduced Ediger to Burrows, and thereafter Ediger emailed Burrows regarding WFS’s potential contract with TDOL. On October 14, 1999, Ediger sent Burrows the email that was the basis of the wire fraud charged in Count One of the indictment. The email, a response to a message from Burrows about “red-tape” at the TDOL, stated:

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Bluebook (online)
166 F. App'x 218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-ediger-ca6-2006.