MEMORANDUM *
A jury found Gary Rodrigues, the former Hawaii State Director for the United Public Workers union, guilty of embezzling money from the union1 and accepting kickbacks in connection with an employee welfare benefit plan.2 The jury also found Rodrigues and his daughter Robin Sabatini guilty of mail fraud,3 health care fraud,4 money laundering,5 and conspiracy to commit money laundering.6 We affirm the jury’s verdict and order a limited Ameline remand.
A. Honest Services Mail Fraud and Honest Services Health Care Fraud.
The defendants argue that: (1) the instruction erroneously failed to require that the government prove a specific mis[180] representation or omission made by the defendants as part of the scheme; (2) the instruction did not require that the government prove the defendants acted with an intent to deceive; and (3) the instruction told the jury that honest services included a union official’s duties under § 501 of the Labor-Management Reporting and Disclosure Act (LMRDA).
In United States v. Williams, we explained that our court “and other circuits have recognized the viability of the ‘intangible rights’ theory when the private defendant stands in a fiduciary or trust relationship with the victim of the fraud.”7 Under this theory, the breach or manipulation of the relationship between the actor and the victim satisfies the “fraud” element.8 Because a “person[ ] who assume[s] a legal duty of loyalty comparable to that owed by an officer or employee to a private entity” represents that he is acting in the best interest of the principal,9 to do otherwise (at least without telling the principal) is an act of misrepresentation, or, at least, concealment.10
Accordingly, “depriving an employer of one’s honest services and of its right to have its business conducted honestly can constitute a ‘scheme to defraud’ under § 1341,”11 so long as it is done as part of “a recognizable scheme formed with the intent to defraud.”12 No specific false statement, misrepresentation, or omission is necessary if the “scheme [is] reasonably calculated to deceive.”13 And we analyze this “by a non-technical standard.... [S]chemes are condemned which are contrary to public policy or which fail to measure up to the ‘reflection of moral uprightness, of fundamental honesty, fair play and right dealing....’”14
The instruction did not omit any required elements.15 It required the jury to find that the defendant “knowingly devised a scheme or artifice to deprive [the union] and its members of their right to defendant Gary Rodrigues’s honest services.” And it required the jury to find that the scheme was created “with the intent to deprive [the union] and its members of their right to the honest services of Gary Rodrigues.” This sufficiently required some type of intentionally deceitful deprivation.
[181] Additionally, because there is no suggestion that the court misstated Rodrigues’s statutory obligations under the LMRDA, and because we agree with the Third Circuit that “the LMRDA established, as a matter of federal law, union members’ right to the honest and faithful services of union officials,”16 we approve of the district court’s honest services instruction.
B. Embezzlement of Union Funds.
Rodrigues argues that the indictment failed to state an offense.17 Because he did not raise this issue below, we review for plain error18 and “liberally construe the indictment in favor of validity.”19 Because an indictment’s purpose is simply to “apprise the defendant with reasonable certainty, of the nature of the accusation against him,”20 it is acceptable if “the necessary facts appear in any form or by fair construction can be found within the terms of the indictment.”21 It “should be ... read as a whole [,] ... read to include facts which are necessarily implied[,] ... and ... construed according to common sense.”22 Moreover, an omission will not cause us to reverse unless “it worked to the prejudice of the accused.”23
The indictment said that Rodrigues committed embezzlement by causing the union to pay Hawaii Dental Service. And the specific amounts of money in the indictment represented the consultant fee percentage of the monies paid to HDS. It was clear to everyone (the grand jury, the parties, the judge, etc.) what the embezzlement charge was about. The pre-trial correspondence functioned as a bill of particulars, informing the defense that “the specific amounts of money ... were calculated based on the premiums HDS received from [the union] multiplied by the negotiated consultant fee amount.” That is how the case was presented to the jury. This vitiated any possible prejudice.24
We also reject Rodrigues’s argument that there was a constructive amendment to the indictment.25 The constructive [182] amendment doctrine is meant to ensure that a defendant is not convicted for something for which the grand jury did not indict him.26 Here, however, it was clear to all before trial that the indictment was based on the sending of money from the union to Hawaii Dental Service to cover consultant fees.27
C. Money Laundering and Conspiracy to Commit Money Laundering.
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MEMORANDUM *
A jury found Gary Rodrigues, the former Hawaii State Director for the United Public Workers union, guilty of embezzling money from the union1 and accepting kickbacks in connection with an employee welfare benefit plan.2 The jury also found Rodrigues and his daughter Robin Sabatini guilty of mail fraud,3 health care fraud,4 money laundering,5 and conspiracy to commit money laundering.6 We affirm the jury’s verdict and order a limited Ameline remand.
A. Honest Services Mail Fraud and Honest Services Health Care Fraud.
The defendants argue that: (1) the instruction erroneously failed to require that the government prove a specific mis[180] representation or omission made by the defendants as part of the scheme; (2) the instruction did not require that the government prove the defendants acted with an intent to deceive; and (3) the instruction told the jury that honest services included a union official’s duties under § 501 of the Labor-Management Reporting and Disclosure Act (LMRDA).
In United States v. Williams, we explained that our court “and other circuits have recognized the viability of the ‘intangible rights’ theory when the private defendant stands in a fiduciary or trust relationship with the victim of the fraud.”7 Under this theory, the breach or manipulation of the relationship between the actor and the victim satisfies the “fraud” element.8 Because a “person[ ] who assume[s] a legal duty of loyalty comparable to that owed by an officer or employee to a private entity” represents that he is acting in the best interest of the principal,9 to do otherwise (at least without telling the principal) is an act of misrepresentation, or, at least, concealment.10
Accordingly, “depriving an employer of one’s honest services and of its right to have its business conducted honestly can constitute a ‘scheme to defraud’ under § 1341,”11 so long as it is done as part of “a recognizable scheme formed with the intent to defraud.”12 No specific false statement, misrepresentation, or omission is necessary if the “scheme [is] reasonably calculated to deceive.”13 And we analyze this “by a non-technical standard.... [S]chemes are condemned which are contrary to public policy or which fail to measure up to the ‘reflection of moral uprightness, of fundamental honesty, fair play and right dealing....’”14
The instruction did not omit any required elements.15 It required the jury to find that the defendant “knowingly devised a scheme or artifice to deprive [the union] and its members of their right to defendant Gary Rodrigues’s honest services.” And it required the jury to find that the scheme was created “with the intent to deprive [the union] and its members of their right to the honest services of Gary Rodrigues.” This sufficiently required some type of intentionally deceitful deprivation.
[181] Additionally, because there is no suggestion that the court misstated Rodrigues’s statutory obligations under the LMRDA, and because we agree with the Third Circuit that “the LMRDA established, as a matter of federal law, union members’ right to the honest and faithful services of union officials,”16 we approve of the district court’s honest services instruction.
B. Embezzlement of Union Funds.
Rodrigues argues that the indictment failed to state an offense.17 Because he did not raise this issue below, we review for plain error18 and “liberally construe the indictment in favor of validity.”19 Because an indictment’s purpose is simply to “apprise the defendant with reasonable certainty, of the nature of the accusation against him,”20 it is acceptable if “the necessary facts appear in any form or by fair construction can be found within the terms of the indictment.”21 It “should be ... read as a whole [,] ... read to include facts which are necessarily implied[,] ... and ... construed according to common sense.”22 Moreover, an omission will not cause us to reverse unless “it worked to the prejudice of the accused.”23
The indictment said that Rodrigues committed embezzlement by causing the union to pay Hawaii Dental Service. And the specific amounts of money in the indictment represented the consultant fee percentage of the monies paid to HDS. It was clear to everyone (the grand jury, the parties, the judge, etc.) what the embezzlement charge was about. The pre-trial correspondence functioned as a bill of particulars, informing the defense that “the specific amounts of money ... were calculated based on the premiums HDS received from [the union] multiplied by the negotiated consultant fee amount.” That is how the case was presented to the jury. This vitiated any possible prejudice.24
We also reject Rodrigues’s argument that there was a constructive amendment to the indictment.25 The constructive [182] amendment doctrine is meant to ensure that a defendant is not convicted for something for which the grand jury did not indict him.26 Here, however, it was clear to all before trial that the indictment was based on the sending of money from the union to Hawaii Dental Service to cover consultant fees.27
C. Money Laundering and Conspiracy to Commit Money Laundering.
For the money laundering statute to apply, the charged financial transaction must involve “proceeds of specified unlawful activities....”28 Defendants concede that mail fraud is a specified unlawful activity. But they say that the monies Sabatini deposited were not “proceeds” of the mail fraud because the fraud was a deprivation of the intangible right to honest services as opposed to a scheme to obtain money or property. Thus, according to them, the mail fraud did not produce “proceeds.” We disagree. The “use of the mail” element of mail fraud for which the defendants were convicted was the sending of “consultant fee” checks to Sabatini. These checks were “proceeds” of the scheme or artifice to defraud the union.29
D. Kickbacks.
Rodrigues’s theory is that he did not violate the statute because the life insurance plan falls under the governmental plan exception to ERISA. He argues that the instruction given on how to determine whether the union plan was a governmental one was erroneous. And he argues that there was insufficient evidence to justify the jury’s verdict that the plan was not a governmental one.
Both of Rodrigues’s arguments are based on his reading of Silvera v. Mutual Life Insurance Co.,30 where we concluded that a group benefits insurance policy issued by a private insurance provider to the city should be considered a “governmental plan” even though the “City did not directly fund or underwrite the plan” and “it was [the private provider], not the City, who designed and set up the plan, administered it on behalf of the employees, and was ultimately liable for the payments of benefits.”31 In Silvera, we used the Department of Labor’s regulation on whether a plan is established through the purchase of insurance to analyze whether the city had established a plan. The regulation says [183] that a plan is not established if “no contributions are made by an employer or employee organization,” if “[p]articipation in the program is completely voluntary for employees,” and if “[t]he sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program ..., to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer.”32 Seizing on the court’s comment that “behavior inconsistent with any one the above criteria would constitute evidence of the establishment of a plan,”33 Rodrigues argues that the government had to show each of these three prongs to meet its burden.
Silvern is distinguishable. It dealt with whether the insurance provider or the insurance purchaser was the entity that established or maintained the plan. Here, the dispositive question is whether the insurance purchaser (and thus the entity that established and maintained the plan) was the government or the union, and we conclude that the district court’s totality of the circumstances formulation of the challenged instruction, considered as a whole, was a reasonable way to guide the jury to make that determination.34
We also conclude that there was sufficient evidence to justify the jury’s eonclusion that the plan was established or maintained by the union, and not the government. Taking the evidence in the light most favorable to the prosecution, we note the following: the government had no role in negotiating the premiums or purchasing the plan; the government allowed its employees to purchase the plan as an alternative to other plans it offered, but did not endorse it over the others; the government only paid 2.5% of the premiums, with the remainder paid by the employees; the government sent its contribution and the employees contribution to the union, who then sent it on to the insurance provider; the union maintained the payment and enrollment records; and the government only audited the records once in four decades. This meets our low threshold for sufficiency of the evidence challenges.
E. Prejudicial Joinder
Rodrigues argues that all of his convictions should be thrown out because the kickback count (Count 102) should not have been joined to the other 101 counts.35 Federal Rule of Criminal Procedure 8(a) says that an “indictment ... may charge a defendant in separate counts with 2 or more offenses if the offenses charged ... are of the same or similar character, or are based on the same act or transaction, or [184] are connected with or constitute parts of a common scheme or plan.”36
In United States v. Jawara, we explained that “[s]ame or similar character” cases often present a situation where “line drawing between permissible and improper joinder ... becomes imprecise and the standards applied confusing” and we “endeavor[ed] ... to fill in some of the blanks.”37 Based on a review of the Jawara factors, initial joinder was appropriate. The offenses charged each involve Rodrigues using his ability to enter contracts on the unions behalf in order to secretly obtain money for himself or the person of his choosing in connection with those contracts. And witnesses who gave testimony on the kickback count offered testimony relevant to some of the other counts.
F. Sentencing
Defendants were sentenced under the pre-Booker mandatory guidelines scheme. They did not make an Apprendi38 objection at sentencing. The appeal of their sentences is thus controlled by Ameline.39 Accordingly, we order a limited remand for the sentencing judge to determine whether the he would have imposed the same sentences if he had known the guidelines were advisory.
AFFIRMED IN PART AND REMANDED IN PART.