United States v. Jeffrey C. Nolan

223 F.3d 1311

• Court: Court of Appeals for the Eleventh Circuit
• Decided: August 24, 2000
• Docket: 99-14274
• Status: Published

Opinion

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT AUGUST 24, 2000 ________________________ THOMAS K. KAHN CLERK No. 99-14274 Non-Argument Calendar ________________________

D.C. Docket 98-00567-CR-DTKH

UNITED STATES OF AMERICA, Plaintiff-Appellee, versus

JEFFREY C. NOLAN, Defendant-Appellant. __________________________

Appeal from the United States District Court for the Southern District of Florida _________________________ (August 24, 2000)

Before DUBINA, CARNES and HULL, Circuit Judges.

PER CURIAM:

Defendant-Appellant Jeffrey C. Nolan appeals his conviction after a jury

trial for major fraud against the United States, in violation of 18 U.S.C. §§ 1031 &

2, theft of public money, in violation of 18 U.S.C. § 641, and money laundering, in violation of 18 U.S.C. §§ 641 & 1957. Nolan challenges the district court’s jury

instructions regarding the major fraud charges and argues that there was

insufficient evidence to convict him on the money laundering charge. After

review, we affirm Nolan’s convictions.

I. BACKGROUND

The charges against Nolan resulted from his and his codefendant James

Byrd’s diversion of $3,547,693.00 in government-contract proceeds for personal

use. Nolan was associated with PZ Construction Company, Inc. (“PZ”), which

entered into several contracts to remove debris remaining in the Miami area after

Hurricane Andrew. Nolan was involved with PZ’s contract with the Army Corps

of Engineers (the “ACOE”). PZ was to receive debris in a central location (the

“Three Lakes site”) from which it would transport the debris to various landfills.

Under the contract, PZ began accepting debris on January 4, 1993, and received

$31 to $33 per ton of debris it accepted for disposal. As a minority contractor, the

ACOE was required to pay PZ every week. Testimony at trial established that

instead of taking the debris directly to the landfills, PZ hired subcontractors to

separate the debris into either (1) material that could be recycled and sold or (2)

material that had to be taken to the landfills.

The “recycling” process took longer than simply taking the material to the

2 landfills, and thus the debris began to pile up at the Three Lakes site.1 On March

10, 1993, the Florida Department of Environmental Regulation (the “FDER”)

ordered PZ to receive no additional debris at the Three Lakes site and to remove

the remaining debris because the piles of debris posed a health threat to the area.

By that time, the ACOE had paid PZ a total of $12,848,811.00. After the FDER

issued the cease-and-desist order, the ACOE notified PZ that it would not make

any additional payments on the contract until PZ made satisfactory progress in

removing the debris from the site. However, the ACOE resumed payment after PZ

made a request for additional payments, claiming that it needed to pay its

subcontractors. Yet by December 1993, there was still a large amount of debris

remaining at the Three Lakes site. On February 1, 1994, the ACOE terminated its

contract with PZ for non-performance. Eventually, the ACOE paid D & J

Construction $5 million to complete the removal of debris at the Three Lakes site.

A. The Major-Fraud Charges

The ACOE eventually discovered that instead of using the ACOE’s progress

1 Trial testimony indicated that the ACOE essentially acquiesced in PZ’s practice of “recycling” the material from the site. The ACOE had a contracting officer on site who would have known that PZ had been recycling since the beginning of the contract, and who did nothing to cause PZ to change the practice. At trial, witnesses suggested that recycling was better for the area, both environmentally and economically, and noted that the news media had commented favorably on the practice of recycling the hurricane debris.

3 payments to PZ for the Three Lakes project, Nolan and his codefendant, James

Byrd, were shifting some of the funds for their own personal use. As a result, the

government charged Nolan with twenty-four counts of major fraud. The jury

convicted Nolan of three of those counts of major fraud, all involving the delivery

of checks. At trial, investigators testified that they had traced the money

transferred by the three checks back to ACOE contract proceeds that were

originally paid to PZ. Count Eleven involved a check for $150,000, dated March

4, 1993, that Nolan wrote to C.A. Killen, an accountant in Texas who performed

no work on the Three Lakes project. Count Fifteen involved check for $100,000,

dated April 5, 1993, also written to Killen. Killen eventually redirected to Nolan’s

real estate attorney, Joshua Manaster, a substantial portion of the $250,000 he had

received from Nolan. Manaster put the funds towards a down payment on Nolan’s

$1.15 million house. Count Seventeen involved a check for $132,000, dated May

20, 1993, written from Killen to Manaster.

B. The Money-Laundering Charge

On August 5, 1993, the ACOE sent PZ a check for $595,970, which

included $345,970 that was duplicated from a prior payment and was accidentally

paid to PZ a second time. At trial, Nolan’s administrative assistant, Sheila Carter,

testified that she detected the duplicate payment and notified Nolan. Nolan told

4 her to deposit the entire amount into the PZ account, and that they would take care

of it when the ACOE discovered the overpayment. Nolan’s computer assistant,

Miguel Michelena, testified that he also approached Nolan about the overpayment.

Nolan told Michelena that they would worry about it if the ACOE caught its

mistake.

Special Agent Edward Miller, of the Internal Revenue Service criminal

investigation division, testified that in early August 1993, Nolan completed a wire

transfer including the $345,970 duplicate payment. Nolan withdrew the money

from the PZ account and deposited it into an account belonging to Renaissance

Environmental Corporation (“Renaissance”). Renaissance was a “shell”

corporation acquired by Nolan that did no work on the Three Lakes project. The

jury convicted Nolan of money laundering as a result of the transfer of the

duplicate payment from the PZ account to the Renaissance account.

The jury convicted Nolan of five of the twenty-seven counts in the

indictment, including the three of the major fraud counts, one count of theft of

public money, and one count of money laundering. The district court sentenced

Nolan to a total of sixty-three months’ imprisonment, and imposed a $10,000

restitution payment. Nolan timely appealed.

II. STANDARD OF REVIEW

5 We review de novo “whether the district court misstated the law when

instructing the jury or misled the jury to the prejudice of the defendant.” United

States v. Deleveaux, 205 F.3d 1292, 1296 (11th Cir.) (citation omitted), cert.

denied sub nom, Deleveaux v. United States, 120 S. Ct. 2724 (2000). A district

court’s “refusal to give a requested jury instruction is reviewed for abuse of

discretion, because [a] defendant is entitled to have the court instruct the jury on

the theory of the defense, as long as it has some basis in the evidence and has legal

support.” United States v. Grigsby, 111 F.3d 806, 814 (11th Cir. 1997) (internal

quotations and citation omitted). “We reverse when we are left with a substantial

and ineradicable doubt as to whether the jury was properly guided in its

deliberations.” Id. (internal quotations and citation omitted).

We review a claim of insufficient evidence to sustain a conviction de novo.

See United States v. Christo, 129 F.3d 578, 579 (11th Cir. 1997) (citation omitted).

“We, however, view the evidence in the light most favorable to the government,

with all reasonable inferences and credibility choices made in the government’s

favor.” Id. (internal quotation and citation omitted). We must affirm the

conviction if we find that “any rational trier of fact could have found the essential

elements of the crime beyond a reasonable doubt.” Id. (internal quotation and

citation omitted).

6 III. DISCUSSION

A. Major Theft Jury Instruction

The jury convicted Nolan of three counts of major fraud against the United

States, in violation of 18 U.S.C. § 1031. Section 1031 reads, in pertinent part, as

follows:

Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent –

(1) to defraud the United States; or

(2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises,

in any procurement of property or services as a prime contractor with the United States . . . if the value of the contract . . . for such property or services is $1,000,000 or more, shall [be subject to fines and/or imprisonment].

18 U.S.C. § 1031(a). Regarding the major fraud counts, the district court

instructed the jury, in part, as follows:

A defendant can be found guilty of a crime of committing major fraud against the United States only if all of the following facts are proven beyond a reasonable doubt.

Now, the elements of this crime are set forth on pages eight and nine of the jury instructions.2 Let’s talk about them one by one.

Number one, that the Defendant knowingly executed or attempted to

2 The printed jury instructions are not part of the record on appeal.

7 execute a scheme with the intent to defraud the United States, or to obtain money by means of false or fraudulent pretenses, representations and promises. Second, that the scheme took place as part of the acquisition of money as a contractor with the United States or as a subcontractor or a supplier on a contract with the United States.

Third, that the value of the contract . . . that is the value of the amount to be paid under the contract . . . was one million dollars or more.

R9 at 1662-1663 (emphasis supplied).

Nolan objected to the proposed jury instruction regarding the second

element of the major-fraud offense.3 Nolan requested that the district court replace

the following proposed language, “That the scheme took place as part of the

acquisition of money as a contractor with the United States [or as a

subcontractor],” with the following language drafted by Nolan: “That the scheme

or artifice to defraud occurred as part of any procurement of property or services as

a prime contractor with the United States, [or as a subcontractor].” R8 at 1573

(emphasis supplied). Nolan argued that the language he requested more accurately

tracked the language of the major-fraud statute, as § 1031 uses the word

“procurement” instead of the proposed instruction’s “acquisition.” Also, § 1031

uses the words “property or services” instead of the proposed instruction’s

3 There is no Eleventh Circuit pattern jury instruction addressing the 18 U.S.C. § 1031 major- fraud offense. Additionally, this Court has never examined jury instructions regarding 18 U.S.C. § 1031.

8 “money.” Id. at 1574; 18 U.S.C. § 1031(a).4 The district court overruled Nolan’s

objection.

We have examined the jury instructions as a whole, and conclude that the

district court’s major-fraud jury instruction was a proper statement of the law, and

did not mislead the jury. See Deleveaux, 205 F.3d at 1296. Although the district

court’s instructions did not track exactly the language of § 1031, the substituted

words were similar in meaning to the words in the statute, and operated to clarify

the meaning of the statute in the context of this case. For example, “acquire” is a

generally accepted synonym of “procure.” Webster’s Third New International

Dictionary 1809 (unabridged ed. 1993). Additionally, “money” is simply the form

of “property or services” that Nolan received from the government under the

contract at issue in this case. Because we conclude that the jury was properly

guided by the instruction given by the district court, we also conclude that the

district court did not abuse its discretion by refusing to give Nolan’s requested

version of the major-fraud jury instruction.5 See Grigsby, 111 F.3d at 814.

4 In the district court, Nolan also argued that the words “or artifice” should be included after the word “scheme,” because the major fraud statute uses both terms. 18 U.S.C. § 1031(a). The district court overruled this objection because the Eleventh Circuit pattern jury instructions regarding mail fraud and wire fraud use only the word “scheme,” even though the statutes governing mail fraud and wire fraud, like § 1031, use “scheme or artifice.” Nolan has not raised this specific issue on appeal. 5 To the extent that Nolan argues that to violate 18 U.S.C. § 1031, the fraud must occur prior to or contemporaneous with the creation of the contract, we find that argument to be without

9 B. Sufficiency of the Evidence on Money Laundering Conviction

Nolan was also convicted on one count of money laundering based on the

withdrawal of the $345,970 duplicate payment from the PZ account and the deposit

of that amount in the Renaissance account. On appeal, Nolan argues that there was

not sufficient evidence to sustain the money laundering conviction.

Money laundering occurs when one “knowingly engages or attempts to

engage in a monetary transaction in criminally derived property.” 18 U.S.C. §

1957. The withdrawal of money from a bank account is a “monetary transaction.”

18 U.S.C. § 1957(f)(1). Money laundering is an offense to be punished separately

from the underlying criminal offense, which in this case is the theft of the money

from the government. See United States v. Christo, 129 F.3d 578, 579 (11th Cir.

1997) (citation omitted). Therefore, the primary issue in a money laundering

charge involves “determining when the predicate crime becomes a ‘completed

offense’ after which money laundering can occur.” Id. at 579-80 (citation

omitted).

merit. We believe that Congress intended § 1031 to sweep broadly to also cover fraud not only in the making of the contract, but also in the execution of the contract. See United States v. Brooks, 111 F.3d 365, 369 (4th Cir. 1997) (stating that the legislative history of § 1031 indicated a wide range of concern not only with monetary loss resulting from fraud, but also with safety concerns stemming from, e.g., the provision of defective parts for helicopters and weapons). We conclude that the district court’s major-fraud jury instructions, considered in total, adequately stated the law applicable to violations of 18 U.S.C. § 1031.

10 Nolan’s money laundering conviction was based on the transfer of the

$345,970 from the PZ account to the Renaissance account. The predicate criminal

offense was the initial theft of that money from the government. Therefore, to

support Nolan’s money laundering conviction, the government was required to

prove that the theft offense was a completed criminal offense before Nolan

withdrew the funds from the PZ account and deposited them into the Renaissance

account. 18 U.S.C. § 1957(f)(2); United States v. Gregg, 179 F.3d 1312, 1315

(11th Cir. 1999).

On appeal, Nolan argues that the theft offense was not completed when the

$345,970 was deposited in the PZ account, but only after Nolan transferred the

funds to the Renaissance account. Since this transfer was an element of the money

laundering offense, Nolan argues that he did not commit separate theft and money

laundering crimes. We conclude, however, that the theft was a completed crime

when Nolan ordered the deposit of the duplicate payment from the ACOE into the

PZ account.

The evidence, when viewed in the light most favorable to the government,

indicates that Nolan’s administrative assistant, Sheila Carter, notified Nolan of the

ACOE’s error in forwarding the duplicate payment. Shortly thereafter, Miguel

Michelena, the computer assistant, raised the issue again with Nolan. As he had

11 told Carter initially, Nolan told Michelena to deposit the money into the PZ

account and that they would worry about the error if the ACOE discovered it.

This evidence supports an inference that when the money was deposited in

the PZ account, Nolan had control over the money as if he had robbed the

government and “placed the proceeds of the robbery into his own account with the

intent to use the money for his own purposes.” Gregg, 179 F.3d at 1315 (holding

that a bank fraud was a completed crime when the defendant “fraudulently

obtained the deposit of the proceeds of [a] check into his account, with the intent at

that time to eventually withdraw the money from the account for his own use”).

Unlike the account in Gregg, the PZ account was not technically Nolan’s account.

However, we find this to be a distinction without a material difference. Nolan’s

ability to withdraw the money from the PZ account and deposit it in the

Renaissance account shows that he had control over the PZ account as if it was his

own. Because we conclude that the theft offense was complete when the $345,970

was deposited in the PZ account pursuant to Nolan’s command, we find that there

was sufficient evidence to support Nolan’s conviction for the separate money

laundering offense when Nolan withdrew the money from the PZ account and

deposited it into the Renaissance account.

IV. CONCLUSION

12 We conclude that the district court did not err in instructing the jury on the

major fraud charges. Also, there was sufficient evidence presented to support

Nolan’s conviction for money laundering.

AFFIRMED.