Case: 18-15072 Date Filed: 07/30/2020 Page: 1 of 19
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 18-15072 Non-Argument Calendar ________________________
D.C. Docket No. 5:17-cr-00026-MTT-CHW-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ISAAC J. CULVER, III,
Defendant-Appellant.
________________________
No. 18-15073 Non-Argument Calendar ________________________
D.C. Docket No. 5:17-cr-00026-MTT-CHW-3
versus Case: 18-15072 Date Filed: 07/30/2020 Page: 2 of 19
PROGRESSIVE CONSULTING TECHNOLOGIES, INC.,
Appeals from the United States District Court for the Middle District of Georgia ________________________
(July 30, 2020)
Before MARTIN, ROSENBAUM, and ANDERSON, Circuit Judges.
PER CURIAM:
Isaac Culver appeals his convictions and 87-month sentence for conspiracy
to commit mail and wire fraud, mail and wire fraud, and money laundering. His
appeal was consolidated with that of his company, Progressive Consulting
Technologies, Inc. (“Progressive”). Progressive was convicted of the same
offenses and sentenced to 5-years probation and a $500,000 fine. In their
consolidated appeal, Culver and Progressive (“Appellants”) first argue that
insufficient evidence supported their conspiracy and substantive convictions for
mail and wire fraud, because the government failed to show any intentional scheme
to defraud. Second, they argue that insufficient evidence supported their
convictions for conspiracy to commit money laundering because the government
failed to prove concealment. Finally, Culver argues that the district court
improperly applied a two-level sophisticated means enhancement in calculating his
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guideline sentence. After careful review, we affirm Appellants’ convictions and
Culver’s sentence.
I. In 2012, the Bibb County School District decided to upgrade the school
system’s technology infrastructure. In June of that year, the School District
published a Request for Qualifications (an “RFQ”) for an entity to fill the upgrade
project’s Technical Project Manager role. The School District looked for a firm
capable of providing “technical project management and network management
support.” The School District wanted a firm to oversee the purchase and
installation of the technology upgrades, rather than a firm to complete the
installation itself. The RFQ was the first step in the process for an applicant to
become the project manager. Relevant here, another step required applicants to
submit letters of recommendation from companies with whom they had recently
worked.
In July 2012, Culver, on behalf of Progressive, completed an RFQ outlining
Progressive’s qualifications. As part of its submission package, Progressive
included a letter from Allen Stephen, CEO of CompTech, Inc., a federal
contracting firm located in Dayton, Ohio. However, Culver actually wrote the
recommendation letter and at Culver’s direction, Stephen put Culver’s letter on
CompTech stationary. At trial, evidence was introduced that Culver knew the
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assertions contained in the letter were “totally made up.” Stephen also
acknowledged that some assertions made in the letter were entirely false.1
Progressive was ultimately selected to serve as the project manager for the
upgrade. The “Services Agreement” reflects the terms of the parties’ agreement.
It states that as project manager, Progressive would “[i]nstall, relocate, configure,
modify and test routers, switches, and servers”; assist with “infrastructure
deployments and technical hardware refresh, renovation, and transition initiatives”;
and “[e]valuate and recommend new and evolving networking technologies.”
Appellants recommended the School District use the NComputing L300
device as part of its technology upgrade and the School Board approved the
purchase. Culver was involved with the purchase of these devices. However, the
School District believed the devices were purchased from CompTech, because
Culver was directing CompTech to invoice the School District. The School
District paid CompTech $3,768,000, but CompTech wired $2,151,750 of that
amount back to Progressive so that Progressive could pay for the NComputing
devices. In a separate transaction, CompTech wired $1,537,990 in profit to
Progressive and kept the remaining $78,260 for itself. Out of the over $1.5 million
wired to Progressive, Progressive wrote several checks payable to Culver. The
1 For example, Progressive and CompTech never worked together on the project Culver described in the letter. And, despite the letter’s claim that CompTech had an office in Atlanta, CompTech did not. 4 Case: 18-15072 Date Filed: 07/30/2020 Page: 5 of 19
School District did not know that CompTech was sending money back to
Progressive as part of the purchase.
In March 2013, the School District contacted CompTech to ask when the
NComputing devices would be installed. Stephen, however, never intended
CompTech to perform the installation because he believed Progressive was doing
it. When Stephen contacted Culver about this issue, Culver sent Stephen
information about the equipment and deployment and directed Stephen to respond
to the School District’s inquiries.
At some point during the spring of 2013, the School District began to
question how the technical upgrade was being managed. On April 17, 2013,
Culver sent Stephen a letter advising him that the School was putting together a
timeline and record of payments to vendors for 2012. Culver again directed
Stephen how to respond on behalf of CompTech. Culver told Stephen to say that
in order to get the School District a discount on the NComputing devices,
Progressive asked CompTech to purchase the devices and take a small profit “as a
pass through for using CompTech’s GSA schedule.” Then on April 22, 2013,
Culver sent Stephen a “heads up” email, letting Stephen know that he should tell
the School District that CompTech was doing the install of the NComputing
devices, and that CompTech had two “employees.” None of this information was
true.
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Eventually, the School District shut down the technology upgrade project.
Only 300 of the 15,000 NComputing devices purchased were installed. The
School District deemed the rest of the devices “unusable” because key
components, like monitors and keyboards, were not purchased. In June 2017, the
government indicted Progressive and Culver based on their roles in this scheme. A
jury found them guilty of conspiracy to commit mail and wire fraud, mail and wire
fraud, and money laundering. Culver was sentenced to a term of 87-months
imprisonment and Progressive was sentenced to 5-years probation and a $500,000
fine. This appeal followed.
II. We review de novo whether sufficient evidence supported a jury’s guilty
verdict. United States v. Foster, 878 F.3d 1297, 1303–04 (11th Cir. 2018). In
doing so, we view the evidence in the light most favorable to the prosecution and
resolve all reasonable inferences and credibility evaluations in favor of the verdict.
Id. at 1304. In considering the sufficiency of the evidence, our only task is to
determine whether any rational trier of fact could have found all the essential
elements of the crime beyond a reasonable doubt. United States v. Feldman, 931
F.3d 1245, 1258 (11th Cir. 2019). The jury’s guilty verdict must be affirmed
unless there is no reasonable construction of the evidence from which the jury
could have found the defendant guilty beyond a reasonable doubt. Foster, 878
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F.3d at 1304. A jury is free to choose among reasonable constructions of the
evidence, so it is unnecessary that the evidence exclude every reasonable theory of
innocence or be wholly inconsistent with every conclusion except that of guilt. Id.
It is not enough for a defendant to put forth a reasonable hypothesis of innocence,
as the issue is not whether a jury reasonably could have acquitted, but whether it
reasonably could have found guilt beyond a reasonable doubt. United States v.
Beckles, 565 F.3d 832, 840–41 (11th Cir. 2009).
Credibility determinations are also left to the jury. United States v. Flores,
572 F.3d 1254, 1263 (11th Cir. 2009) (per curiam). A jury is entitled to believe as
much or as little of a witness’s testimony as it finds credible. United States v.
Matthews, 431 F.3d 1296, 1312 (11th Cir. 2005) (per curiam). If the jury does not
believe a defendant’s testimony, the jury may take it as evidence that “the opposite
of his testimony is true.” United States v. Williams, 390 F.3d 1319, 1325 (11th
Cir. 2004) (quotation marks omitted).
That said, we turn to Culver and Progressive’s two sufficiency-of-the-
evidence arguments.
A. MAIL AND WIRE FRAUD A conviction for wire fraud requires that the government prove beyond a
reasonable doubt that the defendants (1) participated in a scheme or artifice to
defraud, (2) with intent to defraud, and (3) used, or caused the use of, interstate
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wire transmissions for the purpose of executing the scheme or artifice to defraud.
United States v. Machado, 886 F.3d 1070, 1082–83 (11th Cir. 2018). Mail and
wire fraud “are analytically identical save for the method of execution.” United
States v. Bradley, 644 F.3d 1213, 1238 (11th Cir. 2011); see also 18 U.S.C.
§§ 1341, 1343.
Courts have construed the phrase “scheme to defraud” broadly. United
States v. Pendergraft, 297 F.3d 1198, 1208 (11th Cir. 2002). The word “defraud”
means “the deprivation of something of value by trick, deceit, chicane, or
overreaching.” Id. (quotation marks omitted). To establish a scheme to defraud,
the government must offer “proof of a material misrepresentation, or the omission
or concealment of a material fact calculated to deceive another out of money or
property.” Bradley, 644 F.3d at 1238 (quotation marks omitted).
In addition, the government must prove the defendant’s intent to defraud.
Id. at 1239. “To gauge a defendant’s intent to commit a fraudulent scheme . . . we
must determine whether the defendant attempted to obtain, by deceptive means,
something to which he was not entitled.” Id. at 1240. An intent to defraud for
purposes of mail and wire fraud may be inferred from the defendant’s conduct.
United States v. Maxwell, 579 F.3d 1282, 1301 (11th Cir. 2009). “Evidence that a
defendant personally profited from a fraud may provide circumstantial evidence of
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an intent to participate in that fraud.” United States v. Naranjo, 634 F.3d 1198,
1207 (11th Cir. 2011).
Appellants’ sufficiency argument rests on United States v. Takhalov, 827
F.3d 1307 (11th Cir. 2016), which held that mere deception is insufficient to
constitute a “scheme to defraud.” Id. at 1313–14. In Takhalov, this Court reversed
a wire fraud conviction because the district court refused to give an instruction to
the jury that the defendants intended to defraud their victims. Id. at 1315–16,
1325. In that case, the government presented evidence to establish that the
defendants tricked men into coming into the defendants’ nightclubs by paying
women (B-girls) to lure them into their clubs. Id. at 1310. Once inside, club
employees “would pour vodka in the men’s beer to get them drunker, misrepresent
the prices of drinks, hide menus, cover up prices, and even forge the men’s
signatures on credit-card receipts.” Id. The defendants asked the district court to
instruct the jury that “[f]ailure to disclose the financial arrangement between the B-
girls and the Bar, in and of itself, is not sufficient to convict a defendant of any
offense[.]” Id. at 1314 (alterations in original) (quotation marks omitted). On
appeal, this Court held that the district court should have charged the jury that in
order to find a scheme to defraud, it had to find both deception about the nature of
the transaction and an intent to harm. Id. at 1312–16.
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Here, Appellants argue that although there was sufficient evidence that they
deceived the school district, the evidence was not sufficient to prove their intent to
defraud. Appellants claim there was no evidence of intent to misrepresent the
price or fees charged and no evidence that they misrepresented the characteristics
or quality of the devices. However, Appellants’ Takhalov-based arguments are not
persuasive.
There was sufficient evidence here to support Culver’s and Progressive’s
conspiracy and substantive wire and mail fraud convictions. Progressive, through
its agents, “constructed an elaborate scheme that allowed them to reap inflated
profits” and left the School District “with almost nothing for its $3,768,000.00
investment.” R. Doc. 202 at 3. Witnesses testified that Appellants deceived the
School District into hiring Progressive as the project manager because Progressive
fabricated a recommendation letter from CompTech. There was also testimony
that Appellants used CompTech as a pass-through for the purchase of the devices
to hide the fact that Progressive was acting as a vendor. This is relevant because
under the agreement with the School District, Progressive was to provide product
management services, and when Progressive acted as a vendor, it created a conflict
of interest. Based on this evidence, the jury could reasonably infer that Appellants
made misrepresentations to the School District in an “attempt[] to obtain, by
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deceptive means, something to which [they were] not entitled.” Bradley, 644 F.3d
at 1240.
Appellants also argue that any misrepresentations they made did not affect
the essential nature of the parties’ bargain and therefore were not material.
Because fraud requires a false statement of “material” fact, Appellants argue this
evidence was not sufficient to prove mail and wire fraud. See Maxwell, 579 F.3d
at 1299 (“A scheme to defraud requires proof of a material misrepresentation . . .
calculated to deceive another out of money or property.”).
This Court addressed a similar situation in Maxwell. There, the defendant
acquired state and federal contracts to perform work as minority contractors, even
though they were not minorities. Id. at 1291. The defendant argued that, although
various contracts he signed had explicit provisions requiring the work to be
performed by a minority contractor, he did not deprive the victims of money or
property because they received the work they sought. Id. at 1302. A panel of this
Court rejected the defendant’s argument, noting that the mail and wire fraud
statutes “also seek to punish the intent to obtain money or property from a victim
by means of fraud and deceit.” Id.
Appellants argue that Maxwell is distinguishable because the contract in that
case “contained explicit provisions that only minority businesses could apply,”
whereas Progressive’s agreement with the School District “did not include any
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provision preventing them from acting as the vendor for the NComputing
transaction and/or to provide conflict-free advice.” Br. of Appellants at 31. But
this fact does not distinguish Appellants’ case. A misrepresentation need not be a
term included in the parties’ agreement for it to be material. Rather, a
misrepresentation is material if it has “a natural tendency to influence, or is capable
of influencing, the decision maker to whom it is addressed.” Maxwell, 579 F.3d at
1299 (alteration adopted) (quotation marks omitted). A jury could reasonably find
that Appellants’ fabricated recommendation letter and misrepresentations about
CompTech’s role influenced the School District in purchasing the NComputing
devices. We therefore affirm the jury’s verdict as to the mail and wire fraud
convictions.
B. MONEY LAUNDERING
We next examine the sufficiency of the evidence supporting Appellants’
convictions on the money laundering counts under 18 U.S.C. § 1956(a)(1)(B)(i).
Section 1956(a)(1)(B)(i) is sometimes referred to as the “concealment” provision
of the money laundering statute. United States v. Majors, 196 F.3d 1206, 1211
(11th Cir. 1999). This section “was designed to punish defendants who thereafter
take the additional step of attempting to legitimize their proceeds so that observers
think their money is derived from legal enterprises.” Id. at 1212.
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In this case, the government had to prove to the jury that: (1) Appellants
conducted or attempted to conduct a financial transaction; (2) the transaction
involved the proceeds of a statutorily specified unlawful activity; (3) Appellants
knew the proceeds were from some form of illegal activity; and (4) they knew a
purpose of the transaction was to conceal or disguise the nature, location, source,
ownership, or control of the illegal proceeds. United States v. Miles, 290 F.3d
1341, 1355 (11th Cir. 2002) (citing § 1956(a)(1)(B)(i)). Appellants challenge the
sufficiency of the evidence only as to the fourth element.
Specifically, Appellants argue the government’s evidence was insufficient to
prove the existence of “any transaction that was designed to conceal the nature,
location, source, ownership, or control of any illegal proceeds” as required under
the concealment provision in § 1956(a)(1)(B)(i). Appellants say they did not
disguise any transaction with aliases, fake addresses, complicated or unnecessary
transactions, or engage in any other concealment efforts, so the government’s
evidence did not show the “animating purpose” of the transaction made it more
difficult for law enforcement to trace the funds at issue. Br. of Appellants at 33.
In determining whether there was a purpose of concealment, this Court looks
to whether there is evidence of:
[S]tatements by a defendant probative of intent to conceal; unusual secrecy surrounding the transaction; structuring the transaction in a way to avoid attention; depositing illegal profits in the bank account of a legitimate business; highly irregular features of the transaction; using 13 Case: 18-15072 Date Filed: 07/30/2020 Page: 14 of 19
third parties to conceal the real owner; a series of unusual financial moves cumulating in the transaction; or expert testimony on practices of criminals.
United States v. Blankenship, 382 F.3d 1110, 1130 (11th Cir. 2004) (alteration
adopted) (quoting Majors, 196 F.3d at 1213 n.18). In Blankenship, the defendant
deposited illegitimate funds into his business account, and then transferred those
funds into bank accounts in his own name. Id. at 1128–29. We held the evidence
was insufficient to show concealment because (1) the money was in accounts in the
defendant’s name, and (2) the accounts were private so the defendant “could not
reasonably have anticipated” receiving a “marginal increase in secrecy” by moving
the money between those accounts. Id. By comparison, in Majors, defendants
deposited illegitimate funds in business accounts of two corporations, transferred
those funds to other, legitimate third-party corporations, and then transferred those
funds from the legitimate corporations directly into their own pockets. Majors,
196 F.3d at 1214. This Court held that evidence was sufficient to prove money
laundering because, in the light most favorable to the government, it supported the
jury’s finding that the defendants “had a specific intent to structure their financial
transactions so as to conceal or disguise the true nature and source of the transfer
of funds between corporations and, ultimately, to them.” Id.
Appellants say this case is different because they funneled funds through
CompTech only for the purpose of defrauding the School District, not to conceal
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the funds themselves. Although the evidence introduced at trial shows that
Appellants funneled the purchase of NComputing devices through CompTech to
deceive the School District, there was other evidence in the record that showed
concealment of the funds. For instance, investigators had to examine CompTech’s
account statements in order to discover the fact that, after Progressive paid
NComputing, it retained a profit from the funds paid by the school district for the
NComputing devices. In addition, Progressive instructed CompTech to wire the
funds from the NComputing devices in two separate transactions in two separate
amounts. Based on this evidence, a rational juror could—and did—conclude that
Appellants’ use of CompTech as a third party, and directions to wire funds of
$2,151,750 and $1,537,990 in two separate transactions, was intended to conceal
the illegitimate proceeds of their fraud. See Blankenship, 382 F.3d at 1130
(looking to “secrecy surrounding the transaction,” “depositing illegal profits in the
bank account of a legitimate business,” and “using third parties to conceal the real
owner”).
In sum, and taking the evidence in a light most favorable to the government,
Culver and Progressive’s transfer of money in two amounts through a third-party
company constituted sufficient evidence to show that a purpose of the transaction
was to conceal or disguise the source, ownership, or control of the illegal proceeds.
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We therefore affirm Appellants’ convictions for conspiracy to commit money
laundering.
III.
Culver also argues that the district court miscalculated the Sentencing
Guidelines range by erroneously finding his conduct fell within the “sophisticated
means” enhancement. See U.S. Sentencing Guidelines § 2B1.1(b)(10)(C). He
says Appellants’ scheme “was neither complex nor intricate,” as is required to
increase a sentence based on a sophisticated-means offense. Br. of Appellants at
37.
We review for clear error the district court’s findings of fact related to the
imposition of sentencing enhancements, including a finding that the defendant used
sophisticated means. United States v. Ghertler, 605 F.3d 1256, 1267 (11th Cir.
2010). When reviewing for clear error, we will not disturb a district court’s
findings “unless we are left with a definite and firm conviction that a mistake has
been committed.” Id. (quotation marks omitted). After careful review, we hold
that the district court did not clearly err in applying the sophisticated-means
enhancement.
The Sentencing Guidelines provide for a two-point enhancement of a
defendant’s offense level if the “offense . . . involved sophisticated means.” USSG
§ 2B1.1(b)(10)(C). The sophisticated means enhancement should only be applied
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to “especially complex or especially intricate offense conduct pertaining to the
execution or concealment of” the scheme. Id. § 2B1.1(b)(10) cmt. n.9(B).
“Conduct such as hiding assets or transactions, or both, through the use of fictitious
entities, corporate shells, or offshore financial accounts also ordinarily indicates
sophisticated means.” Id. There is no requirement that each of a defendant’s
individual actions be sophisticated in order to impose the enhancement. Ghertler,
605 F.3d at 1267. Rather, it is enough if the totality of the scheme was
sophisticated. Id.
We cannot say the district court clearly erred in finding that Culver used
sophisticated means to perpetrate or conceal his fraudulent scheme because his
offense conduct could be viewed as “especially complex or . . . intricate.” See
USSG § 2B1.1(b)(10) cmt. n.9(B). Here, the district court found that increasing
Culver’s sentence was warranted because of the “significan[ce]” of Culver’s
attempts to cover up his conduct by directing CompTech to communicate with the
School District. The district court also found (albeit when discussing a separate
ground for increasing Culver’s sentence) that the scheme continued for an
extended period of time; Appellants “us[ed] deception to get the contract to
become the project manager”; and Appellants engaged in a well-documented
cover-up “as the School District began to ask questions.”
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Like in Ghertler, it may be true that “aspects of [Culver’s] scheme were not
sophisticated,” but under our deferential standard of review, the totality of his
activities spanning July 2012 through April 2013 is sufficient to support the district
court’s finding that Culver used sophisticated means. 605 F.3d at 1268; see United
States v. Feaster, 798 F.3d 1374, 1381 (11th Cir. 2015) (“Regardless of whether
the defendant undertook affirmative acts of concealment, the scheme itself may be
designed in a sophisticated way that makes it unlikely to be detected, allowing it to
continue for an extended period and to impose larger losses.”). These activities
included: providing a fabricated reference letter to obtain a government contract;
using false invoices to hide Progressive’s role as a profiting vendor; sending a
deceptive email, copying the School District, that gave the appearance of a fake
arm’s length negotiation; and feeding CompTech responses to the School District’s
inquiries. In short, Culver’s offenses “involved repetitive, coordinated conduct
designed to allow him to execute his fraud and evade detection.” United States v.
Bane, 720 F.3d 818, 826–27 (11th Cir. 2013) (affirming imposition of a longer
sentence when offense involved multiple corporations, required employees to
create a paper trail to mask the fraud, and involved steps to conceal the offense).
Thus, although Culver did not attempt to conceal his role in the fraud
through false identities or fictitious entities, the totality of his activities carried out
over the course of his relationship with the School District were sufficiently
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complex to support finding that he used sophisticated means. See Ghertler, 605
F.3d at 1267–68. We therefore affirm the district court’s application of the
sophisticated-means enhancement and Culver’s 87-month sentence.
AFFIRMED.