United States v. Ray

• Court: Court of Appeals for the Tenth Circuit
• Decided: August 13, 2024
• Docket: 23-1284
• Status: Unpublished

Opinion

Appellate Case: 23-1284 Document: 010111093773 Date Filed: 08/13/2024 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT August 13, 2024 _________________________________ Christopher M. Wolpert Clerk of Court UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v. No. 23-1284 (D.C. No. 1:14-CR-00147-CNS-2) AUSTIN RAY, (D. Colo.)

Defendant - Appellant. _________________________________

ORDER AND JUDGMENT* _________________________________

Before HOLMES, Chief Judge, HARTZ, and ROSSMAN, Circuit Judges. _________________________________

Austin Ray appeals the district court’s judgment sentencing him to eighteen

months in prison for violating the conditions of his supervised release. Exercising

jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742, we affirm.

I. Background

In 2016, a jury convicted Mr. Ray of eight counts arising from the preparation

of fraudulent income tax returns. The district court imposed a custodial sentence of

* After examining the briefs and appellate record, this panel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 23-1284 Document: 010111093773 Date Filed: 08/13/2024 Page: 2

120 months, followed by three years of supervised release. The court also ordered

Mr. Ray to pay $303,774.32 in restitution.

In January 2022, when Mr. Ray started his term of supervised release, he and

his probation officer, Jordan Buescher, discussed his court-imposed

supervised-released conditions. Relevant here are the conditions prohibiting the

commission of any new crime and requiring him to document and report income and

compensation from any source. Officer Buescher told Mr. Ray that, by signing

monthly financial documents, he was certifying all information was true and correct,

and that it would violate the law and the supervised release conditions to provide

false statements. The financial-disclosure forms contained the same warnings and

cited the false-statements statute, 18 U.S.C. § 1001, which criminalizes knowingly

and willfully making false statements to the government.

In June 2023, Officer Buescher filed a revocation petition based on six

violations of the supervised-release conditions. In this appeal, Mr. Ray challenges

only the district court’s determination on violations 1 through 3, which alleged he

violated § 1001 by falsely stating his monthly financial reports for March through

May 2022.1

1 Violations 4 through 6 alleged that Mr. Ray failed to submit to a search by probation officers, failed to pay restitution as directed, and failed to truthfully answer a probation officer’s inquiry about the source of funds Mr. Ray used to purchase a semi-truck for a business he had opened without prior approval from the probation office. 2 Appellate Case: 23-1284 Document: 010111093773 Date Filed: 08/13/2024 Page: 3

The district court held a hearing on the petition to revoke Mr. Ray’s supervised

release. Officer Buescher testified that in the report submitted for March 2022,

Mr. Ray stated his only income was $254 in food stamps and a $40 gift from family

members, he spent money only on groceries and health insurance, and he had no job

or bank account. According to Officer Buescher, records obtained from a Wells

Fargo account held solely in Mr. Ray’s name showed $3,300 in deposits made in

March 2022. Officer Buescher also testified that, in the April 2022 report, Mr. Ray

similarly stated he received no employment income, had no bank account, and

received only $254 in food stamps, but the Wells Fargo records again showed

deposits—this time more than $11,000 was deposited or transferred into Mr. Ray’s

account. As for the May 2022 report, Officer Buescher testified that Mr. Ray

reported he received about $2,700 in income, spent about $1,730 that month, and still

did not have a bank account. Again, the Wells Fargo records showed more than

$12,000 in deposits and almost $15,000 in withdrawals during the relevant time

frame.

Mr. Ray’s mother also testified at the revocation hearing. When Mr. Ray was

first released, she explained, he spent a lot of time repairing rental properties she

owned. She said the Wells Fargo account was set up for collecting rents from those

properties and then used to pay mortgages and other expenses for them, including

remodeling and repair. Any excess money was returned to her.

Mr. Ray similarly testified that he set up the Wells Fargo account primarily for

keeping track of money his mother gave him from rent she collected, and he used that

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money to pay for repairs on her properties. Excess money in the account was going

toward a truck for a business Mr. Ray wanted to start. When the trucking business

did not develop, Mr. Ray said, he returned $15,000 to his mother. Mr. Ray never

viewed the money in the account as his, so he did not disclose it on his monthly

reports. But Mr. Ray admitted using some of that money for personal living

expenses, explaining he “had money coming in there too.” R. vol. III at 181. He also

explained he forgot to list a training-program payment he received from a job

because the employer terminated his employment about two weeks after he started,

and he thought he was disqualified from receiving the payment. Id. at 159; see

generally id. at 158–160. Mr. Ray explained he did not believe he had intentionally

or knowingly violated the conditions of his supervised release.

The district court found the evidence supported all six violations and sentenced

Mr. Ray to eighteen months in prison to be followed by eighteen months of

supervised release. Mr. Ray appeals.

II. Discussion

Mr. Ray argues the district court misunderstood the law and never made the

factual findings necessary for a § 1001(a) violation, which requires “knowingly and

willfully” making false statements to the government:

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully -- (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

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(2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title, imprisoned not more than 5 years . . . or both. § 1001(a) (emphasis added).

As evidence of the district court’s failure to consider § 1001(a)’s mens rea

requirement, Mr. Ray points to the court’s statement that “the obligations to report

are just firm and in place. It doesn’t matter if you intended to violate the terms and

conditions. They’ve been violated. So your intention or inadvertence honestly does

not matter, because these conditions are set in stone, and they do not require a

separate intent factor.” R. vol. III at 185–86. Mr. Ray argues his allegedly

inadvertent failure to comply with the financial reporting requirements was central to

his defense.

The government contends Mr. Ray waived this argument because he did not

object to the district court’s statements at the hearing and has not argued for plain

error review on appeal. In his reply brief, Mr. Ray argues he preserved his argument

by adequately challenging the government’s evidence and testifying he did not intend

to violate the financial-reporting condition. Alternatively, he argues that if we deem

the argument waived, we should review for plain error.

We discern no error—plain or otherwise. See United States v. Jones, 818 F.3d

1091, 1097 (10th Cir. 2016) (reviewing revocation of supervised release for an abuse

of discretion, including de novo review of any legal questions).

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In the § 1001 context, a false statement is made (1) knowingly, if the

defendant made it “knowing it was false”; and (2) willfully, if the defendant made it

“deliberately, voluntarily and intentionally.” Tenth Circuit Criminal Pattern Jury

Instruction 2.46.1 (2021). Because a court “cannot read [a defendant’s] mind,” it

must “infer his knowledge [for purposes of § 1001] from his behavior and all of the

facts in evidence.” United States v. Fitzgibbon, 576 F.2d 279, 284 (10th Cir. 1978).

We conclude the district court found Mr. Ray knowingly and willfully made

false statements. When government counsel asked the district court to clarify if its

“findings indicate that you find that all the elements . . . are met for a violation of

18 U.S.C. [§] 1001,” the court replied, “I do.” R. vol. III at 191. And the court’s

discussion of the evidence regarding § 1001’s mens rea requirement shows it had.

The court found Mr. Ray was required to report he had opened the Wells Fargo

account but did not. The court also found that in his application to open the account

in March 2022, Mr. Ray indicated he was employed but reported no employment on

his monthly report, which he had to do “whether that was true or not,” id. at 185, and

regardless of “whether [the employment] was for his mother, for [his mother’s] Tax

Service, or for any of the[] trucking companies” that the evidence showed Mr. Ray

might have worked for, id. at 185. The court further found Mr. Ray failed to report

significant deposits and withdrawals reflected in the Wells Fargo documentation and

there were “numerous and repeated expenditures for food, gas, restaurants, liquor

stores, PlayStation, [and] Netflix. Clearly, these expenses are not related to the

mother’s operation of [her] properties.” Id. at 186. Finally, observing that Mr. Ray’s

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restitution payments had “been notably failing,” the court explained that “if you have

money for liquor, restaurants, PlayStation, Netflix, et cetera, that should be going to

your restitution obligation, which is the point of the disclosure . . . .” Id. at 197–98.

Our conclusion is not disturbed by the district court’s comment that it was

immaterial whether Mr. Ray separately intended to violate the conditions of his

supervised release. Reviewing the record as a whole, the district court’s discussion

of the evidence shows it considered but rejected Mr. Ray’s position that he

inadvertently violated the reporting requirement and found the government had met

its burden regarding § 1001’s mens rea element.

We affirm the district court’s judgment.

Entered for the Court

Veronica S. Rossman Circuit Judge