FILED United States Court of Appeals PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS November 12, 2019
Elisabeth A. Shumaker FOR THE TENTH CIRCUIT Clerk of Court _________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 18-7051
BUCK LEON HAMMERS,
Defendant - Appellant. _________________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA (D.C. No. 6:17-CR-00033-RAW-1) _________________________________
Ryan A. Ray, Norman Wohlgemuth Chandler Jeter Barnett & Ray, Tulsa, Oklahoma, for Defendant-Appellant.
Linda A. Epperley, Assistant United States Attorney (Brian J. Kuester, United States Attorney, and Robert A. Wallace, Assistant United States Attorney, with her on the brief), Muskogee, Oklahoma, for Plaintiff-Appellee. _________________________________
Before TYMKOVICH, Chief Judge, BALDOCK, and EID, Circuit Judges. _________________________________
BALDOCK, Circuit Judge. _________________________________
Defendant-Appellant Buck Leon Hammers used to be the Superintendent of the
Grant-Goodland Public School District in Grant, Oklahoma. That is, until he was
charged with conspiring with his secretary to commit bank fraud and embezzle federal program funds. Prior to trial, the Government moved to exclude a suicide note written
by Defendant’s secretary and co-conspirator, Pamela Keeling. In that note, Ms.
Keeling took full responsibility for the fraud and exculpated Defendant of any
wrongdoing. The district court granted the Government’s motion and prohibited
Defendant from introducing the note at trial. The jury subsequently convicted
Defendant of conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349 and
conspiracy to embezzle federal program funds in violation of 18 U.S.C. § 371. The
jury acquitted Defendant on the seven substantive counts of embezzlement and bank
fraud.
On appeal, Defendant asserts: (1) the district court erred in excluding Ms.
Keeling’s suicide note; (2) the Government did not present sufficient evidence to
obtain a conviction; (3) the Government committed prosecutorial misconduct; and (4)
the district court committed procedural error at sentencing. Exercising jurisdiction
under 28 U.S.C. § 1291, we affirm.
I.
In August 2001, Defendant became the Superintendent of Grant Schools. Eight
years later, Grant Schools consolidated with the Goodland School District, creating the
Grant-Goodland Public School District (“Grant-Goodland”). Beginning in 2011, the
auditing firm for Grant-Goodland noticed deficiencies in Grant-Goodland’s invoicing
process. Although the firm noted the deficiencies in Grant-Goodland’s audit and made
recommendations for improvement, the deficiencies persisted through subsequent
audits in 2012, 2013, and 2014.
2 By 2014, the continued deficiencies raised more serious concerns as auditors
began to suspect fraud at Grant-Goodland. Initially, the auditors were concerned with
fourteen large purchase orders totaling $386,211. The auditors were troubled by the
fact that the purchase orders did not have “actual original invoices with letterhead and
normal business information.” In light of their concerns, the auditors examined all
checks issued to the vendors identified in the fourteen large transactions. The auditors
determined the checks to these vendors were written as a group together, each month,
on the same date. Each of the checks was endorsed by both the vendor, and then, a
school official. The checks were cashed within minutes of each other, at the same
bank, on the same day they were issued. Because many of these vendors were located
out of town, the auditors found it unlikely the checks could have been issued, mailed,
and cashed in such a short amount of time. Having validated their suspicions, the
auditors notified the United States Department of Education Office of Inspector
General Investigation Services (“OIG”), which initiated the federal investigation in
this case.
On January 28, 2016, agents from the FBI and the OIG executed a search warrant
at Grant-Goodland’s administrative office and seized 36 boxes of documents as well
as electronic files. Sometime thereafter, Ms. Keeling informed Jimmie Sue Miller—
who was her aunt and the school board treasurer—she intended to tell authorities she
“did it.” On February 1, 2016, the Grant-Goodland school board suspended Defendant
and Ms. Keeling for their alleged roles in the scheme to defraud the district by
3 falsifying invoices and check endorsements. Ms. Keeling committed suicide the next
day.
Before taking her own life, Ms. Keeling left four suicide notes laying on a
bible—three to her family and one “to whom it may concern” at Grant-Goodland. The
letter to whom it may concern at Grant-Goodland read as follows: “I Pam Keeling take
full responsibility for everything at Grant School. No vendor nor Mr. Hammers had
anything to do with what happened. I am truly sorry and pray for forgiveness.”
II.
Prior to trial, the Government filed a motion in limine to exclude the suicide
note from evidence, arguing the note is inadmissible hearsay. In response, Defendant
argued the note qualifies as a statement against interest and is also admissible under
the residual exception to the hearsay rule. See Fed. R. Evid. 804(b)(3); Fed. R. Evid.
807. At the pretrial hearing, the district court granted the Government’s motion in
limine but left its decision open to reconsideration depending on the evidence presented
at trial. At trial, defense counsel revisited the issue and the district court reiterated its
decision to exclude the note.
In making its decision, the district court reasoned the suicide note was not a
statement against interest because “penal interest is of no interest—is of no moment to
a dead man.” The court further held the note was not “corroborated by circumstances
clearly indicating its trustworthiness.” Having determined the note was not
corroborated by circumstances clearly indicating its trustworthiness, the district court
also held the note could not be admitted under the residual exception.
4 Despite its decision to exclude the note, the district court permitted defense
counsel to question Ms. Keeling’s aunt, Jimmie Sue Miller, regarding Ms. Keeling’s
confession that she “did it.” The district court admitted the confession pursuant to the
statement against interest exception because there were corroborating circumstances
with respect to Ms. Keeling’s statement to her aunt, in contrast to the suicide letter.
Specifically, the district court found Ms. Keeling’s statement that she “did it” was
corroborated by the Government’s evidence, which was “very much based upon Ms.
Keeling’s involvement.” Although defense counsel originally intended to call Ms.
Miller to testify regarding Ms. Keeling’s confession, counsel ultimately determined
calling Ms. Miller would not be in Defendant’s best interest.
After the Government rested its case, Defendant moved for a judgment of
acquittal on all counts, which the district court denied. Subsequently, Defendant
testified in his own defense. At the close of all evidence, Defendant renewed his
motion. The district court denied the motion on the same grounds finding, in the light
most favorable to the Government, a rational trier of fact could find every element of
the crimes charged beyond a reasonable doubt. After nearly seven hours of
deliberation, the jury returned a guilty verdict on counts one and two, charging
conspiracy to commit bank fraud and conspiracy to embezzle federal program funds.
The jury acquitted Defendant on counts three through nine, alleging bank fraud and
embezzlement.
Following the trial, the United States Probation Office prepared a presentence
report (“PSR”). In the final PSR, the United States Probation Office recommended the
5 court apply a two-level obstruction of justice enhancement based on Defendant’s
alleged perjury at trial. At sentencing, the district court found by a preponderance of
the evidence Defendant committed perjury and applied the enhancement over
Defendant’s objection.
The district court also considered Defendant’s motion for a downward variance
and the Government’s motion for an upward departure at sentencing. After
consideration, the court granted the Government’s motion in part and imposed a two-
level upward departure. Based on that departure, the district court calculated an
adjusted guideline range of 87 to 108 months. Ultimately, the district court imposed a
sentence at the high end of the guideline range, sentencing Defendant to 108 months
on both counts 1 and 2 to run concurrently. The district court also imposed a three-
year term of supervised release on each count to run concurrently.
III.
Defendant raises four issues on appeal. First, he argues the district court erred
in excluding Ms. Keeling’s suicide note. Next, he maintains the Government did not
present sufficient evidence to obtain a conviction. Third, he alleges the Government
committed prosecutorial misconduct. Finally, he contends the district court committed
procedural error at sentencing. We address each issue in turn.
A.
First, Defendant argues the district court erred in excluding Ms. Keeling’s
suicide note at trial. Defendant further argues the exclusion of the note violated his
constitutional right to present a defense. We review the district court’s evidentiary
6 rulings for an abuse of discretion. United States v. Dowlin, 408 F.3d 647, 659 (10th
Cir. 2005). When a defendant alleges the district court’s evidentiary ruling deprived
him of his constitutional right to present a defense, we review the constitutionality of
the ruling de novo. Id.
1.
Turning first to whether the district court abused its discretion in excluding the
suicide note, Defendant argues the district court should have admitted the suicide note
as a statement against interest pursuant to Federal Rule of Evidence 804(b)(3) or, in
the alternative, under the residual exception pursuant to Federal Rule of Evidence 807.
Under Rule 804(b)(3), a statement against the declarant’s interest is not
excluded as hearsay if it is sufficiently reliable. Rule 804(b)(3) covers only those
statements that are “individually self-inculpatory.” United States v. Smalls, 605 F.3d
765, 781 (10th Cir. 2010) (citing Williamson v. United States, 512 U.S. 594, 599
(1994)). We have rejected the notion “that an entire narrative, including non-self-
inculpatory parts (but excluding the clearly self-serving parts . . .) may be admissible
if it is in the aggregate self-inculpatory.” Smalls, 605 F.3d at 781 (citing Williamson,
512 U.S. at 601).
In this case, only the portions of the suicide note specifically inculpating Ms.
Keeling are eligible for analysis under Rule 804(b)(3). The statement exculpating
Defendant—no vendor nor Mr. Hammers had anything to do with what happened—is
not a statement against interest because it is not self-inculpatory. Therefore, the Rule
7 804(b)(3) analysis applies only to the statement: “I Pam Keeling take full responsibility
for everything at Grant School . . . I am truly sorry and pray for forgiveness.”
Undertaking such analysis here, Rule 804(b)(3) requires three things: (1) the
declarant is unavailable; (2) a reasonable person in the declarant’s position would not
have made the statement unless she believed it to be true because, when made, it
exposed the declarant to criminal liability; and (3) the statement is supported by
“corroborating circumstances that clearly indicate its trustworthiness.” Fed. R. Evid.
804(b)(3). There is no question Ms. Keeling was unavailable because she was deceased
at the time of trial. Therefore, at issue is: (1) whether the statement exposed Ms.
Keeling to criminal liability such that she would not have made the statement unless
she believed it to be true; and (2) whether the statement is supported by corroborating
circumstances that clearly indicate its trustworthiness.
To determine whether a reasonable person in the declarant’s position would not
have made the statement unless she believed it to be true, courts consider “the
statement in context and the circumstances under which it was made.” United States v.
Lozado, 776 F.3d 1119, 1125 (10th Cir. 2015). If evidence of the declarant’s state of
mind is available, and the declarant subjectively believed the statement would not
expose her to criminal liability, it is not a statement against interest. Id. at 1128.
The district court found the statement was not against Ms. Keeling’s penal
interest because “penal interest . . . [is] of no moment to a dead man.” See United States
v. Lemonakis, 485 F.2d 941, 956 n.24 (D.C. Cir. 1973). We conclude the district court
did not abuse its discretion in so holding. Ms. Keeling appears to have written the note
8 in anticipation of her imminent death. While Defendant stresses the rule requires the
statement be against the declarant’s penal interest when it is made, the record indicates
Ms. Keeling had no intention of sticking around to face criminal prosecution. For
example, the other notes found with the inculpatory note were good-byes to her family.
Additionally, the letters were found in Ms. Keeling’s motorhome—the same place she
committed suicide. Therefore, at the time she wrote the note, one cannot seriously
argue Ms. Keeling subjectively believed the statement would expose her to criminal
liability. For that reason, the district court did not abuse its discretion in finding Ms.
Keeling’s suicide note was not against her penal interest. See Lozado, 776 F.3d at 1128.
Even assuming Ms. Keeling’s inculpatory statement was sufficiently against her
penal interest to meet the requirements of Rule 804(b)(3), we cannot find the district
court abused its discretion in finding the statement was not sufficiently corroborated.
Although this Court has not “squarely addressed how a statement must be
corroborated,” we have held “the declarant’s credibility and the circumstances of the
statement bearing on its truthfulness can both be considerations.” Lozado, 776 F.3d at
1132. Additionally, a “close relationship between the declarant and the defendant can
damage the trustworthiness of a statement.” Id. at 1133.
Here, the district court questioned whether Ms. Keeling was in a rational state
of mind shortly before committing suicide.1 The district court also noted Ms. Keeling
had been dishonest and untrustworthy in committing the charged fraud, and therefore,
1 As the district court made clear, the concerns regarding Ms. Keeling’s rationality in this case do not amount to a per se rule that suicide notes are always irrational. 9 her believability is “subject to question.” Finally, the district court raised concerns
that Ms. Keeling was trying to “re-write history . . . perhaps wanting to take guilt on
[herself] to clear someone that [she] may have some close relationship with.”2 Based
on this record, we cannot find the district court abused its discretion in finding Ms.
Keeling’s statement was not sufficiently corroborated.
Even if Ms. Keeling’s statement was not admissible under 804(b)(3), Defendant
urges it should have been admitted under the residual exception contained in Federal
Rule of Evidence 807. The residual exception should only be used “in extraordinary
circumstances where the court is satisfied that the evidence offers guarantees of
trustworthiness and is material, probative and necessary in the interest of justice.”
United States v. Dalton, 918 F.3d 1117, 1133 (10th Cir. 2019) (citing United States v.
Tome, 61 F.3d 1446, 1452 (10th Cir. 1995)). Courts must use caution in applying the
residual exception because “an expansive interpretation of the residual exception
would threaten to swallow the entirety of the hearsay rule.” Tome, 61 F.3d at 1452.
In this case, the district court decided to exclude the suicide note under the
residual exception because the note did not offer guarantees of trustworthiness. We do
not find the district court abused its discretion in so holding. As already discussed,
Ms. Keeling and Defendant had a close relationship, which potentially motivated Ms.
2 This factual finding is supported by the following testimony at trial: “[Defendant and Ms. Keeling] had what I observed to be a relationship that was personal,” “they were comfortable around each other . . . they told each other everything and were . . . friends,” “they had known each other forever,” and “[Ms. Keeling] would have done anything for him.” 10 Keeling to exculpate Defendant before taking her own life. Moreover, Ms. Keeling’s
prior statements and actions with respect to the charged fraud cast doubt on her honesty
and trustworthiness.3
Nevertheless, Defendant argues a note, voluntarily written, in close proximity
to one’s death has an “indicia of reliability” because “the sense of impending death is
presumed to remove all temptation to falsehood, and to enforce as strict an adherence
to the truth as would the obligation of oath.” See Miller v. Stovall, 742 F.3d 642, 650
(6th Cir. 2014) (citing Idaho v. Wright, 497 U.S. 805, 820 (1990)). While Defendant’s
reasoning may be persuasive, it is not dispositive. Although reasonable minds may
differ, the district court’s factual findings were supported by the record and its legal
conclusions were not contrary to the established law. Therefore, we find the district
court did not abuse its discretion in declining to admit the suicide note under the
residual exception.
2.
Next, we turn to Defendant’s second argument—that is, that the exclusion of the
note violated his right to present a defense. While a defendant has a Fifth and Sixth
Amendment right to present a defense, that right is not absolute. Dowlin, 408 F.3d at
659. “The right ‘may, in appropriate cases, bow to accommodate other legitimate
interests in the criminal trial process.’” Rock v. Arkansas, 483 U.S. 44, 55 (1987)
3 We note the district court found the Government’s evidence corroborated Ms. Keeling’s statement to her aunt but did not corroborate the suicide note. Despite this inconsistency, the unique circumstances surrounding the suicide note support our conclusion that there was no abuse of discretion in finding lack of corroboration. 11 (citing Chambers v. Mississippi, 410 U.S. 284, 295 (1973)). For example, “[t]he
accused does not have an unfettered right to offer testimony that is incompetent,
privileged, or otherwise inadmissible under standard rules of evidence.” Taylor v.
Illinois, 484 U.S. 400, 410 (1988) (emphasis added).
To demonstrate his right to present a defense was violated, Defendant must
show: (1) the district court abused its discretion in excluding the evidence at issue; and
(2) the excluded evidence was “of such an exculpatory nature that its exclusion affected
the trial’s outcome.” United States v. Tapaha, 891 F.3d 900, 905 (10th Cir. 2018)
(citing Dowlin, 408 F.3d at 659). Because we find the district court did not abuse its
discretion in excluding the note, we need not address whether the excluded evidence
was of such an exculpatory nature that its exclusion affected the outcome of the trial.
In either case, the district court did not violate Defendant’s right to present a defense.
B.
Next, Defendant argues the Government presented insufficient evidence to
convict him of conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349 and
conspiracy to embezzle federal program funds in violation of 18 U.S.C. § 371. We
review the sufficiency of the evidence de novo to determine whether a rational jury
could find the defendant guilty beyond a reasonable doubt. United States v. Marquez,
898 F.3d 1036, 1040 (10th Cir. 2018). We consider all the evidence, along with
reasonable inferences taken therefrom, in the light most favorable to the government.
United States v. Winder, 557 F.3d 1129, 1137 (10th Cir. 2009). On appeal, we do not
“assess the credibility of witnesses or weigh conflicting evidence, as these tasks are
12 exclusively for the jury.” Id. (citing United States v. Bowen, 527 F.3d 1065, 1076 (10th
Cir. 2008)). Rather, we “merely determine whether a rational trier of fact could have
found ‘the essential elements of the crime beyond a reasonable doubt.’” Winder, 557
F.3d at 1137 (citing Bowen, 527 F.3d at 1076).
To prove conspiracy to embezzle federal program funds under 18 U.S.C. § 371,
the Government must show: (1) Defendant’s agreement with another person to violate
the law; (2) his knowledge of the essential objective of the conspiracy; (3) his knowing
and voluntary involvement; and (4) interdependence among co-conspirators. United
States v. Rahseparian, 231 F.3d 1257, 1262 (10th Cir. 2000). To prove conspiracy to
commit bank fraud under 18 U.S.C. § 1349, the Government must show: (1) Defendant
agreed with at least one other person to commit bank fraud; (2) one of the conspirators
committed an overt act in furtherance of the conspiracy; (3) Defendant knew the
essential objective of the conspiracy; (4) Defendant knowingly and voluntarily
participated in the conspiracy; and (5) there was interdependence among co-
conspirators. See 18 U.S.C. § 1349; 18 U.S.C. § 1344; 18 U.S.C. § 371. In either case,
Defendant argues the Government failed to prove he specifically agreed to defraud or
embezzle, or that he knowingly and voluntarily participated in the illegal activity.
Here, resisting Defendant’s suggestion that we weigh conflicting testimony or
evaluate the credibility of the witnesses, we conclude the Government presented
sufficient evidence to support a guilty verdict on both conspiracy counts. This
evidence is as follows. Defendant is well-educated and trained in school financial
administration. Along with being the superintendent, Defendant was the purchasing
13 agent for Grant-Goodland, responsible for identifying the vendors who would provide
goods and services to the school. In that capacity, Defendant was tasked with
approving the school’s purchases, reporting to the school board regarding those
purchases, and answering any questions raised thereby. In spite of these
responsibilities, Grant-Goodland prepared hundreds of fraudulent purchase orders
reflecting hundreds of thousands of dollars’ worth of goods and services that were
never provided to the school.
Although Grant-Goodland’s auditors did not immediately realize the school was
producing fraudulent purchase orders, the auditors did identify specific problems with
Grant-Goodland’s purchasing process starting in 2011. The auditors informed
Defendant of those deficiencies, and in fact, Defendant was listed as the contact person
on Grant-Goodland’s corrective action plan. Despite Defendant’s training in school
financial administration and knowledge of the deficiencies in the school’s purchasing
process, the problems identified in 2011 persisted through the 2014 fiscal year.
In that time, Grant-Goodland produced hundreds of fraudulent checks based on
the fraudulent purchase orders—purchase orders that were allegedly, and should have
been, approved by Defendant. Despite being written to primarily out-of-town vendors,
the fraudulent checks were cashed at local banks, and many of the checks bore
Defendant’s signature as the last endorser. While Defendant contests the endorsements
reflect his genuine signature, the bank vice president testified, per bank policy, the
checks should not have been cashed unless Defendant, as the last endorser, was
14 present.4 Additionally, multiple lay witnesses testified the signature appeared to be
Defendant’s based upon their familiarity with Defendant’s signature generally.5
Finally, Defendant’s account number is written on at least one fraudulent check for
$2,900, and a bank teller testified Defendant cashed at least “some checks” with them.
While Defendant testified in his own defense and urged Ms. Keeling acted alone,
the jury could have found his testimony less than credible when he, for example,
disclaimed knowledge of $28,000 worth of fraudulent checks approved at the same
school board meeting where he recommended laying off two teachers and combining
classes due to negative balances. A reasonable jury could have rejected Defendant’s
explanation that he trusted Ms. Keeling completely and overlooked the hundreds of
thousands of dollars spent on non-existent school improvements. Based on all the
evidence, a reasonable juror could infer Defendant: (1) specifically agreed to commit
bank fraud and embezzle federal program funds; and (2) acted in furtherance of that
agreement. Consequently, Defendant’s conviction must stand.
C.
Third, Defendant argues he was denied due process due to prosecutorial
misconduct. Specifically, Defendant identifies six statements made by the
Government which he alleges constitute reversible prosecutorial misconduct.
4 We note several bank tellers testified they did not consistently enforce this policy. Nevertheless, it is within the province of the jury to weigh the evidence. 5 We note the handwriting expert’s findings were inconclusive. The handwriting expert explained he could not make a determination because the checks he examined were electronic copies, not originals. 15 A prosecutor’s misconduct may render a trial “so fundamentally unfair as to
deny [a defendant] due process.” Underwood v. Royal, 894 F.3d 1154, 1167 (10th Cir.
2018) (quoting Littlejohn v. Trammell, 704 F.3d 817, 837 (10th Cir. 2013)). To
determine whether a prosecutor’s comments rendered a defendant’s trial fundamentally
unfair, the court: (1) “decides whether the prosecutor’s comments were improper”; and
(2) if so, examines the comments likely effect on the jury’s verdict. United States v.
Christy, 916 F.3d 814, 824 (10th Cir. 2019).
Turning to the first prong, “courts have struggled to determine when a
prosecutor’s statements are improper.” Id. While any improper comments should be
examined in context, courts have recognized prosecutorial comments may be improper
when they refer to matters not in the evidence or distort the record by misstating the
evidence. Id. 824-25. Once the court finds the prosecutor made an improper comment,
the court then “assesses whether the comment affected the jury’s verdict.” Id. at 825.
To determine whether comments affected the jury’s verdict, courts consider the trial in
its entirety, including “the extent of the misconduct, and the role of the misconduct
within the case,” as well as “[t]he prevalence and degree of improper statements.” Id.
at 826 (citing United States v. Gabaldon, 91 F.3d 91, 94 (10th Cir. 1996)). “Absent
prejudice, a prosecutor’s improper statements alone will not require a new trial.”
Christy, 916 F.3d at 826 (citing United States v. Sorensen, 801 F.3d 1217, 1242-43
(10th Cir. 2015)).
Defendant objected to each of the six alleged improper statements, and the
district court overruled each objection. Therefore, we conduct a de novo review for
16 error. See Christy, 916 F.3d at 826 (citing United States v. Anaya, 727 F.3d 1043, 1052
(10th Cir. 2013)).
Here, Defendant first argues the Government misstated the evidence during
cross examination of Defendant when the prosecutor stated:
1. Corey Dawson “recognized your signature” on the forged checks;
2. “Your signature appears on all of those checks according to [Corey Dawson]”;
3. Sandy Storie “has seen your signature all over the place and she says that’s your
signature on that check”; and
4. Sandy Storie “said that looked like your signature to her,” to which Defendant
responded, “it’s not my signature,” and the prosecutor stated, “that’s not what
she said.”
In each of these statements, Defendant argues the Government implied Corey
Dawson and Sandy Storie knew it was Defendant’s signature on the checks, when in
fact they testified it appeared to be Defendant’s signature. Both Corey Dawson and
Sandy Storie testified they could not say with certainty Defendant signed the checks at
issue. Nevertheless, we do not find the Government misstated the evidence in this
cross examination. The Government need not qualify each of the above statements
with “alleged” or “purported” signature.
Moreover, even if the Government’s cross examination slightly misconstrued
the witnesses’ testimony, it is inconceivable to suggest these misstatements influenced
the jury’s verdict. These minor misstatements occurred during the cross examination
17 of a single witness during a three-and-a-half-day trial. Both Corey Dawson and Sandy
Storie were cross examined at length, and the jury heard extensive evidence with
respect to whether it was truly Defendant’s signature on the fraudulent checks. In sum,
it defies logic to believe the jury’s verdict would have been different but for these
statements. Therefore, even if the Government’s statements were improper—which
they were not—Defendant was not prejudiced by them. Accordingly, these statements
do not require reversal.
Next, Defendant argues the Government misstated the evidence when the
prosecutor stated Nancy Hughes “testified that the MAS system is Cloud based, which
means you could reach it from any computer.” Defendant argues the Government’s
statement mischaracterized the evidence because Ms. Hughes testified the MAS system
had only been Cloud-based for “the last couple years.” Because Defendant was not
working at Grant-Goodland in the last couple years, Defendant argues the
Government’s statement is a material misstatement of the evidence.
Although we find the Government’s statement was misleading to the extent that
no Cloud-based MAS program existed during Defendant’s tenure with Grant-
Goodland, we also conclude Defendant suffered no prejudice by the
mischaracterization. In the course of a three-and-a-half-day trial, this single comment
does not affect the overwhelming weight of the evidence. Moreover, when defense
counsel objected to the misstatement he also provided his characterization of the
evidence—that is, defense counsel stated in front of the jury that Ms. Hughes testified
18 “it was Cloud based the last two years, but before that it was not Cloud based.”
Defendant then stated, “I haven’t been at [Grant] the last two years.” Therefore, the
jury heard both characterizations of the evidence simultaneously along with
Defendant’s statement that he was not employed by Grant-Goodland when MAS was
Cloud-based. When ruling on the objection, the district court explicitly stated, “it is
up to the jury” to evaluate the evidence. With this additional information and
instruction, the jury was able to fairly evaluate the evidence when reaching its verdict.
Therefore, we find these statements did not prejudice Defendant, and so, there is no
reversible error.
3.
Finally, Defendant argues the Government’s statements during closing
arguments were improper when the prosecutor stated:
Did [Defendant] leave at noon? Yep. He took a check, left at noon, went to the bank and cashed it and went to the ranch. Look at the time stamps on the checks. They are not all in the afternoon, but most of them are. He told you what he did. Left the school with a check, went to the bank and cashed it.
Defendant argues these statements reflect the Government’s opinion and are not
supported by evidence in the record.
While we recognize the Government is entitled to “a reasonable amount of
latitude in drawing inferences from the evidence” during closing arguments, this
latitude “does not extend to improper suggestions, insinuations or assertions.” United
States v. Manriquez Arbizo, 833 F.2d 244, 247 (10th Cir. 1987). In this case, we need
not decide whether the Government’s statement was improper because, either way, the
19 statement was not prejudicial. In the context of the entire record, the Government’s
statement was “not so egregious as to influence the jury to convict [Defendant] on
evidence not in the record.” See id. at 248. The Government presented substantial
evidence with respect to Defendant’s guilt and the district court instructed the jury that
counsel’s arguments were not to be considered as evidence. Accordingly, we find the
Government’s statement during closing argument was not prejudicial, and therefore,
does not require reversal.
D.
Finally, Defendant argues the district court committed procedural error in
sentencing. Specifically, Defendant argues the district court erred in applying: (1) the
obstruction-of-justice enhancement; and (2) the disruption-of-governmental-function
upward departure. When a defendant challenges the district court’s application of the
sentencing guidelines, “we review legal questions de novo and factual findings for
clear error, giving due deference to the district court’s application of the guidelines to
the facts.” United States v. Mollner, 643 F.3d 713, 714 (10th Cir. 2011) (citing United
States v. Munoz-Tello, 531 F.3d 1174, 1181 (10th Cir. 2008)).
First, Defendant argues the district court erred in applying the obstruction-of-
justice enhancement based on his alleged perjury at trial. Under the obstruction-of-
justice enhancement, if a defendant willfully obstructs or impedes the administration
of justice with respect to the prosecution of the charged offense, the district court must
increase the offense level by two levels. U.S.S.G. § 3C1.1. Before the district court
20 can apply the enhancement, it must find all three elements of perjury—that is: (1) a
false statement under oath; (2) concerning a material matter; (3) with the willful intent
to provide false testimony. United States v. Hawthorne, 316 F.3d 1140, 1146 (10th
Cir. 2003). The district court must also “be explicit about which representations by
the defendant constitute perjury.” Id.
Here, the district court explained its decision to apply the obstruction-of-justice
enhancement as follows:
The defendant’s testimony regarding the presence of his signature on numerous checks used to carry out the fraud conspiracies in this case was directly contradictory to testimony of other witnesses and the evidence presented in this case. His denial of any involvement in the scheme to defraud Grant Public Schools was a willful attempt by the defendant to obstruct justice in this case and not a result of confusion, mistake, or faulty memory. Therefore, the Court finds by a preponderance of the evidence that the defendant was appropriately given a two-level enhancement for obstruction.
Upon the Government’s inquiry, the district court clarified its findings and specifically
stated Defendant lied with respect to: (1) his signature on the checks; (2) his receipt of
embezzled funds; and (3) his blatant denial of any involvement in the scheme to
defraud. The district court also indicated “it’s pretty much the whole kit and
kaboodle.” While it is not entirely clear what this last statement means, it seems to
indicate the district court believed the entirety of Defendant’s testimony was perjured.6
6 We note that the district court’s “whole kit and kaboodle” statement standing alone would run afoul of Hawthorne because it does not specifically identify the portion of perjured testimony. See Hawthorne, 316 F.3d at 1146.
21 Reviewing the court’s decision, we conclude the district court made the requisite
findings to apply the obstruction-of-justice enhancement. It found Defendant made
false statements with respect to: (1) his signature on the checks; (2) his receipt of
embezzled funds; and (3) his involvement in the scheme to defraud. It goes without
saying these perjured statements are material to the charged offenses, and the district
court determined the statements were made willfully.7
Nevertheless, Defendant argues no factual basis exists for the district court’s
findings. Reviewing the district court’s factual findings for clear error, we find the
record adequately supports the district court’s determinations. While no one witness
could say with 100% certainty Defendant signed the checks, numerous witnesses
testified the signature appeared to be Defendant’s based on their familiarity with
Defendant’s signature generally. While the handwriting expert’s findings were
inconclusive, the handwriting expert explained he could not make a determination
because the checks were photocopies rather than original documents. With respect to
receipt of embezzled funds, although the Government could not trace the proceeds to
Defendant directly, a bank teller testified Defendant cashed at least some checks, and
his bank account number was written on the back of a fraudulent check for $2,900.
7 Material evidence is testimony that “if believed, would tend to influence or affect the issue under determination.” United States v. Miranda, 15 F. App’x 674, 677 (10th Cir. 2001) (affirming enhancement even when the district court did not explicitly find materiality). Although the district court did not make an explicit finding regarding materiality, we have previously affirmed an obstruction-of-justice enhancement when the finding was “implicit.” See Hawthorne, 316 F.3d at 1146. Here, Defendant’s testimony that he did not sign any fraudulent checks or receive any embezzled funds is unquestionably material to the charged offenses. 22 Based upon this evidence and the record as a whole, we find no clear error with respect
to the obstruction-of-justice enhancement.
Finally, Defendant argues the district court erred in applying the disruption-of-
governmental-function upward departure. Guideline section 5K2.7 provides “[i]f the
defendant’s conduct resulted in a significant disruption of a governmental function, the
court may increase the sentence above the authorized guideline range to reflect the
nature and extent of the disruption and the importance of the governmental function
affected.” U.S.S.G. § 5K2.7. Departures are not justified, however, “when the offense
of conviction is an offense such as bribery or obstruction of justice” because
“interference with a governmental function is inherent in the offense.” Id.
In this case, Defendant argues disruption of a government function is inherent
in the offense of conviction—embezzlement of federal program funds. Defendant cites
no authority for his proposition, and although we have not directly addressed the issue,
other circuits have applied the enhancement in similar cases. See United States v.
Gunby, 112 F.3d 1493, 1500 (11th Cir. 1997) (applying section 5K2.7 to convictions
for tax fraud); United States v. Khan, 53 F.3d 507, 518 (2d Cir. 1995) (applying section
5K2.7 to Medicare fraud). We are persuaded by the logic those courts applied.
Specifically, the Sentencing Commission explicitly excluded the application of
section 5K2.7 to bribery and obstruction of justice offenses. If the Commission wanted
to preclude the application of section 5K2.7 to embezzlement offenses, it could have
done so. It did not. See Gunby, 112 F.3d at 1500. Furthermore, Defendant was
23 sentenced pursuant to Guideline 2B1.1. This guideline provision does not explicitly
account for an interference with the administration of a government program. Khan,
53 F.3d at 518. Therefore, reviewing the legal question de novo, we find application
of section 5K2.7 was proper.
Nevertheless, Defendant argues even if application of section 5K2.7 is generally
proper, the record does not support the factual basis underlying the departure in this
case. Reviewing the district court’s factual findings for clear error, we find the district
court adequately supported its application of 5K2.7. The district court reasoned:
The conspiracies for which the defendant was convicted resulted in significant monetary loss to the school district. As a result, the defendant’s actions led to state intervention by the Oklahoma State Department of Education on March 24, 2016. The State Department of Education memorandum dated June 23, 2016 specifically cites their road to intervention began due to the financial mismanagement of Grant Public Schools, which would be attributed to the actions of the defendant. Further, the order granting state intervention was based upon the district’s failure to meet financial requirements . . . . The state’s intervention was after the defendant’s fraudulent conduct in this case which resulted in excess of $1 million loss to the school district from June 2010 to January 28, 2016. Therefore, based on the evidence in this matter, the defendant’s fraudulent scheme was significant in the board’s decision to annex Grant Goodland’s Public Schools into the Hugo Public School System. The defendant’s conduct did far more than simply contribute to the closing of a school. It caused the loss of employment and morale of the teachers and staff at Grant Public Schools. It damaged the local school patrons’ confidence in the function of local government. The consolidation of Grant Public Schools into the Hugo Public School system disrupted the function of the Hugo Schools and required them to accommodate additional students into its system. The nature and extent of the disruption caused by the defendant in this case was significant as it caused permanent damage to Grant Public Schools, Hugo Public Schools, and all of its teachers, students, and staff, as well as the confidence of the community in their local government functions.
24 Based on these findings, the district court imposed a two-level upward
departure. Our review of the record convinces us these factual findings are well
supported. While the State Department of Education memorandum identifies other
problems at Grant-Goodland, it repeatedly addresses the financial mismanagement of
the school. Financial mismanagement need not be the sole factor for the annexation
for the district court to determine Defendant’s actions substantially disrupted
government functioning. In fact, the district court acknowledged the State Department
of Education memorandum identified other issues at Grant-Goodland, including its
failure to meet accreditation standards. Nevertheless, based on the evidence before it,
the district court found Defendant’s actions substantially contributed to the annexation
and interrupted government functioning. Based on these findings and the record as a
whole, we find the district court did not err in applying the disruption-of-governmental-
function upward departure.
***
For the reasons provided herein, Defendant’s conviction and sentence are
affirmed.