United States v. Tommie Huff

• Court: Court of Appeals for the Eleventh Circuit
• Decided: June 25, 2010
• Docket: 08-16272
• Status: Published

Opinion

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________ FILED U.S. COURT OF APPEALS No. 08-16272 ELEVENTH CIRCUIT JUNE 25, 2010 ________________________ JOHN LEY CLERK D. C. Docket No. 06-00059-CR-HL-5

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

TOMMIE HUFF,

Defendant-Appellant, STEVE DEASON,

Defendant.

________________________

Appeal from the United States District Court for the Middle District of Georgia _________________________

(June 25, 2010)

Before EDMONDSON, BARKETT and BALDOCK,* Circuit Judges.

* Honorable Bobby R. Baldock, United States Circuit Judge for the Tenth Circuit, sitting by designation. BARKETT, Circuit Judge:

Tommie Huff was convicted of bribery and conspiracy to commit wire fraud

and bribery, in violation of 18 U.S.C. §§ 1341, 1343, 201, for his role in a kickback

scheme that involved placing fraudulent supply orders for Robins Air Force Base

(“RAFB”). He raises three issues on appeal. First, he argues that there is

insufficient evidence to permit a reasonable juror to find that the single conspiracy

charged in the indictment existed because the government failed to prove any

interdependence between him and his co-defendant Steve Deason. Rather, Huff

argues that there were multiple independent “hub and spoke” conspiracies. Huff

also challenges his sentence, arguing that the district court erred in calculating the

amount of loss and the amount of restitution. He contends that the district court

should have considered only the value of the kickbacks Huff received when it

calculated both figures instead of the value of the kickbacks received by both Huff

and his co-conspirator “S.H.”1

I. CONVICTION

Huff contends that insufficient evidence supported his conviction for

conspiracy to defraud because the indictment charged a single conspiracy between

1 This opinion will refer to Huff’s co-conspirators as “S.H.” and “J.H.” because of the sealed nature of the district court’s records.

2 Huff and Steve Deason but the government’s evidence only supported a finding of

of multiple “hub-and-spoke” conspiracies, in which S.H. and J.H. formed the hub

and he and Deason formed separate spokes. He argues that because there was no

interdependence between himself and Deason, there was no “rim” connecting the

individual spokes and thus there were multiple independent conspiracies, not the

single one that was charged in the indictment.

The applicable standard of review is whether, viewing the evidence in the

light most favorable to the government, a reasonable juror could have found the

existence of a single conspiracy beyond a reasonable doubt. United States v.

Richardson, 532 F.3d 1279, 1284 (11th Cir. 2008), cert. denied, 129 S. Ct. 950

(Jan. 12, 2009). “In other words, a jury’s conclusion that a single conspiracy

existed should not be disturbed as long as it is supported by the evidence.” Id.

“To determine whether a jury could reasonably have found that [the]

evidence established a single conspiracy beyond a reasonable doubt, [this court]

must consider: (1) whether a common goal existed; (2) the nature of the underlying

scheme; and (3) the overlap of participants.” Id. (emphasis and quotation marks

omitted). “The government must establish interdependence amongst the

co-conspirators.” United States v. Seher, 562 F.3d 1344, 1366 (11th Cir. 2009).

This court has explained that:

3 The existence of separate transactions does not have to imply separate conspiracies if the co-conspirators acted in concert to further a common goal. Courts typically define the common goal element as broadly as possible, with “common” being defined as “similar” or “substantially the same.” If a defendant’s actions facilitated the endeavors of other co-conspirators, or facilitated the venture as a whole, then a single conspiracy is shown. Each co-conspirator thus does not have to be involved in every part of the conspiracy.

Id. (quotations and citations omitted).

A “hub-and-spoke” conspiracy occurs where “a central core of conspirators

recruits separate groups of co-conspirators to carry out the various functions of the

illegal enterprise.” United States v.Chandler, 388 F.3d 796, 807 (11th Cir. 2004)

(citing Kotteakos v. United States, 328 U.S. 750, 755 (1946)). “The core

conspirators move from spoke to spoke, directing the functions of the conspiracy.”

Id. Where only one conspirator moves from spoke to spoke, however, the

conspiracy is analogous to a “rimless wheel,” with nothing connecting the separate

spokes into a single conspiracy. Id. “Thus, where the ‘spokes’ of a conspiracy

have no knowledge of or connection with any other, dealing independently with

the hub conspirator, there is not a single conspiracy, but rather as many

conspiracies as there are spokes.” Id. Where “the various spokes are aware of

each other and of their common aim,” however, there is a single conspiracy.

Seher, 562 F.3d at 1367.

Based upon the record in this case, we believe the government presented

4 sufficient evidence to permit a reasonable juror to conclude that Huff and Deason

were involved in a single conspiracy. First, Huff, Deason, J.H., and S.H. shared a

common goal and worked in concert to defraud the government for their personal

benefit. Huff and Deason abused their position as government credit cardholders

by placing fraudulent orders with APC Supply (“APC”) and S&G Supply

(“S&G”), both of which were owned by S.H. and J.H. All four individuals

personally benefitted from the scheme; J.H. and S.H. would receive cash kickbacks

and additional orders while Huff and Deason received cash and merchandise

kickbacks.

Second, the nature of the underlying fraudulent scheme was substantially

similar because both Huff and Deason placed orders to APC or S&G that they

knew would not be filled (or would not be filled in full), paid for the orders with

government credit cards, and traveled to APC to pick up their share of the

fraudulent gain (in the form of cash or items for their personal use) from J.H. and

S.H.

Third, the government presented sufficient evidence to permit a finding of

Huff and Deason’s overlapping participation (i.e. interdependence) because Huff

placed orders for items that Deason picked up from APC’s offices even though

they worked in separate government offices and the items were destined for

5 delivery to RAFB directly. The jury also could have inferred that Huff and Deason

were aware of each other’s fraudulent arrangements with S.H. and J.H., APC, and

S&G because they (1) had a relationship with each other apart from their

transactions with S.H. and J.H., as they were good friends and fishing buddies; (2)

visited S.H. and J.H., who orchestrated this scheme, together; (3) used their

government credit cards to defraud the government for their personal benefit

through APC or S&G over the course of the same two-year time period; (4) visited

APC during the day and ate lunch there at APC’s expense during that same period;

and (5) were treated to a hunting trip together at APC’s expense (also during that

same period), which constituted a bribe for their continued participation in the

fraudulent scheme. The evidence presented was sufficient to permit a reasonable

juror to infer that Deason and Huff were aware of the scope of the J.H. and S.H.’s

scheme to defraud and that each took almost identical actions that not only

furthered the scheme as a whole but were interdependent.

Accordingly, the evidence was sufficient to establish a single conspiracy in

this case, and there was no material variance between the indictment and the

evidence presented at trial.2

2 While Huff relies heavily on Chandler and Kotteakos in support of his argument, these cases are distinguishable from the facts here. In Chandler, this court held that the government failed to prove a single conspiracy where the organizer of the conspiracy recruited individuals to assist him in the conspiracy, but these individuals were unaware of each other and of the overall

6 II. SENTENCE

A. Offense Level: Calculation of Loss Amount

Huff argues that the district court erred in determining the loss amount

attributable to him as $86,938.03. He argues that the proper amount of loss should

be based only on his counts of conviction, and that therefore he should have been

held responsible for only $42,068.64— the portion he received as “kickbacks”

from S.H., who retained the other half. Thus, he contends, under United States

Sentencing Guideline (“U.S.S.G.”) § 2B1.1(b)(1), his base offense level should

have been increased by six levels, not eight levels.

This court reviews de novo questions of law arising under the Sentencing

Guidelines. United States v. DeVegter, 439 F.3d 1299, 1303 (11th Cir. 2006).

This court reviews for clear error a district court’s factual determinations made at

sentencing. Id. Because Huff’s arguments on appeal focus on whether the district

court properly held him liable for kickbacks received by his co-conspirator, Huff

raises a legal issue subject to de novo review. Id.

nature of the scheme. 388 F.3d at 806-812. This court noted that the conspiracy organizer purposefully prevented his co-conspirators from finding out about each other or the nature of the activity that was the object of the conspiracy. Id. at 806-07. In Kotteakos, the Supreme Court held that the government failed to prove a single conspiracy where the defendants interacted with the same individual to obtain loans in a fraudulent manner, but otherwise had no relationship and no connection with each other. 328 U.S. at 754-55. As discussed in greater detail earlier, Huff and Deason, unlike the defendants in Chandler and Kotteakos, interacted with one another and with their co-conspirators S.H. and J.H. together.

7 For purposes of determining the offense level, under former U.S.S.G. §

2C1.1(b)(2)(A) (2002) (amended 2004), the amount of loss is the greater of “the

value of the payment, the benefit received or to be received in return for the

payment, or the loss to the government from the offense.” Contrary to Huff’s

contention, the value of the bribe (i.e. the kickback) is used only when the value of

the bribe exceeds the value of the benefit or the value of the benefit cannot be

determined because “for deterrence purposes, the punishment should be

commensurate with the gain to the payer or the recipient of the bribe, whichever is

greater.” U.S.S.G. § 2C1.1 cmt. background (2002) (amended 2004). Huff is also

liable for: (1) all acts by others that he aided and abetted; and (2) the acts of his co-

conspirators that were reasonably foreseeable to him and thus, jointly undertaken

criminal activity. U.S.S.G. § 1B1.3(a)(1)(A) and (B).

Huff’s contention that the loss amount is limited to his share of the

kickbacks (i.e. his portion of the bribe) is foreclosed by this court’s decision in

DeVegter, 439 F.3d at 1303. In DeVegter, one of the two defendants, who worked

at an investment banking firm, gave an intermediary $83,872 to use as a bribe in

order to obtain a government contract. Id. at 1302. The intermediary who received

this money, in turn, gave half of it to the other defendant, who helped secure the

contract for the investment firm. Id. at 1302, 1305 n.3. The district court

8 calculated the loss amount based on the half-portion of the bribe that one of the

defendants ultimately received. Id. at 1305 n.3.

On appeal, this court explained that, under U.S.S.G. § 2B4.1, which cross-

references § 2C1.1 (the Guideline provision at issue in this case), the loss amount

used at sentencing may be based on the amount of the bribe that a defendant

received, but only if it was not possible to estimate the net value of the improper

benefit garnered by the defendant’s fraudulent conduct. Id. at 1305 n.3 Thus, we

held that it was inappropriate to use the amount of the bribe as the loss amount, and

that the improper benefit to the investment firm should have been used as the loss

amount because it could be calculated with reasonable certainty and would have

exceeded the amount of the bribe he received. See id. at 1303-05, n.2. This court

also clarified that, even if it were appropriate to determine the loss amount based

on the bribe, the loss amount should have been equal to the full, initial bribe

amount, not just the half-portion of the bribe one of the defendants ultimately

received. Id. at 1305 n.3.

The same analysis and result applies here. Huff does not seriously dispute

the fact that the amount of his “kickbacks” was less than the amount that APC or

S&G benefitted as a result of the illegal scheme. Thus, the bribe amount would not

be the proper measure of loss here under § 2C1.1, which requires the imposition of

9 whichever is greater: the value of gained by the payer of the bribe or the recipient

of the bribe. Furthermore, under § 1B1.3, Huff is liable for all acts he aided and

abetted (which includes the fraud that S.H. and J.H. perpetrated on the government

through APC and S&G) and for the acts of his co-conspirators that were

reasonably foreseeable to him (i.e. S.H.’s acts).

Therefore, the district court did not err in basing the loss amount on Huff’s

substantive counts of conviction only and calculating it as $86,938.03, which was

the total amount of the fraudulent checks written by his co-conspirator S.H.

($84,137.28) plus the value of the hunting trip Huff received as a bribe

($2,800.75).3 Notably, the district court limited its loss calculation to the

substantive counts of conviction on the charges of bribery even though it was

authorized under § 1B1.3 to include the loss amount attributable to Huff’s co-

conspirator Deason.

In conclusion, the district court’s calculation of $86,938.03 as the loss

amount was not clearly erroneous.

3 While the district court’s language indicated that the loss amount included the value of the two hunting trips, our review reveals that the district court held Huff responsible for the value of the 2002 hunting trip only. The total amount of $86,938.03 is comprised of the value of the total amount of the checks set forth in Huff’s substantive counts of conviction for bribery ($84,137.28) and the value of the 2002 hunting trip ($2,800.75). This calculation is consistent with the district court’s decision to hold Huff responsible for only the amounts relating to his substantive counts of conviction because the jury did not convict Huff of bribery relating to the 2001 hunting trip.

10 B. Restitution Order

Huff argues that the district court abused its discretion by ordering that he

pay restitution in an amount equal to the monetary figure that both he and S.H.

received as kickbacks, again contending that he should have been held liable for

only half that amount. Specifically, Huff relies on this court’s decision in United

States v. Vaghela, 169 F.3d 729 (11th Cir. 1999), in support of his argument that

he should have been ordered to pay restitution in the amount of $42,068.64 (i.e. the

amount of the kickbacks he actually received) rather than $86,938.03 (the loss

amount calculated by the district court for offense level purposes).

The government responds that the court’s restitution order was supported by

the evidence, and reasserts its argument that the district court was authorized to

(but did not) hold Huff responsible for a greater amount—the value of all the

orders that he and Harper processed through S&G and for Deason’s acts. The

government argues that Vaghela is inapposite because, in that case, the victim was

not substantially defrauded, whereas RAFB was substantially defrauded by the

fraudulent orders processed through S&G. Id. at 40-41.

This court reviews de novo the legality of a restitution order, and for clear

error a factual finding regarding the specific amount of restitution. United States v.

Foley, 508 F.3d 627, 632 (11th Cir. 2007) (citations omitted).

11 Huff was convicted of an offense against property: conspiracy to commit

wire fraud in violation of 18 U.S.C. § 1343. Accordingly, the district court was

obligated to order restitution under the Mandatory Victim Restitution Act

(“MVRA”), 18 U.S.C. § 3663A. Here, there is no argument or evidence that the

burden of calculating actual loss to RAFB outweighed the need to compensate the

government, therefore the district court was obligated to order restitution. 18

U.S.C. § 3663A(a)(1), (c)(1)(A)(ii), (3); United States v. Dickerson, 370 F.3d

1330, 1335-36 (11th Cir. 2004).

Huff does not dispute that some amount of restitution is owed; the question

is how much. Under 18 U.S.C. § 3664, “the court shall order restitution to each

victim in the full amount of each victim’s losses as determined by the court.” 18

U.S.C. § 3664(f)(1)(A) (emphasis added). A restitution award “must be based on

the amount of loss actually caused by the defendant’s conduct.” United States v.

Liss, 265 F.3d 1220, 1231 (11th Cir. 2001) (emphasis added). The government

bears the burden of proving the amount of the loss. Id. at 1231-32; 18 U.S.C. §

3664(e). “[A]s part of its burden to prove a restitution amount, the government

must deduct any value that a defendant’s fraudulent scheme imparted to the

victims.” United States v. Swanson, 483 F.3d 509, 515 (7th Cir. 2007).

Here, the district court ordered Huff to pay $86,938.03 in restitution—the

12 same amount as the loss amount the district court calculated for purposes of Huff’s

offense level. However, the amount of loss does not necessarily equal the amount

of restitution to be paid because “[a] defendant’s culpability will not always equal

the victim’s injury.” United States v. Catherine, 55 F.3d 1462, 1465 (9th Cir.

1995); see also United States v. Simpson, 538 F.3d 459, 463-66 (6th Cir. 2008)

(holding that district court may look to intended loss for loss amount but must base

restitution amount on actual loss); United States v. Gallant, 537 F.3d 1202, 1247

(10th Cir. 2008), cert. denied, 129 S. Ct. 2026 (Apr. 20, 2009) (“The calculation of

loss under the Sentencing Guidelines. . . does not necessarily establish loss under

the MVRA [for restitution].”); United States v. Germosen, 139 F.3d 120, 130 (2d

Cir. 1998) (“Of course, an amount-of-loss calculation for purposes of sentencing

does not always equal such a calculation for restitution.”). This is because, inter

alia,4 the amount of loss (for purposes of offense level calculation) is either the

actual or intended loss while the restitution amount must be the actual loss suffered

by the victim. Compare U.S.S.G. § 2F1.1 Cmt. n.7(b) (amount of loss is the

greater of the intended or actual loss) with 18 U.S.C. § 3663(b) (amount of loss is

“actual loss” to victim). Thus, “[a] court could find that a defendant intended a

4 In addition, restitution may include prejudgment interest while the amount of loss cannot. Compare United States v. Smith, 944 F.2d 618, 626 (9th Cir. 1991) (applying the MVRA, 18 U.S.C. § 3663) with U.S.S.G. § 2F1.1 cmt. (n.7).

13 large amount of loss for sentencing purposes, but then order a much-reduced

amount in restitution in light of the actual losses suffered by the victims.” United

States v. Allen, 529 F.3d 390, 396-97 (7th Cir. 2008).

The record currently before the court does not explain how the district court

reached its restitution figure. While the determination of the restitution amount “is

by nature an inexact science,” United States v. Teehee, 893 F.2d 271, 274 (10th

Cir. 1990), under the MVRA, the district court is directed to “engage in an

expedient and reasonable determination of appropriate restitution by resolving

uncertainties with a view toward achieving fairness to the victim.” United States v.

Gordon, 393 F.3d 1044, 1047 (9th Cir. 2004) (relying on legislative history of

“nearly identical” Victim and Witness Protection Act, 18 U.S.C. § 3663, S. Rep.

No. 97-532, at 31 (1982), reprinted in 1982 U.S.C.C.A.N 2515, 2537, for guidance

in interpreting MVRA, 18 U.S.C § 3363A). The district court must explain its

findings with sufficient clarity to enable this court to adequately perform its

function on appellate review. See United States v. Gupta, 572 F.3d 878, 890-91

(11th Cir. 2009) (remanding for district court to determine the amount of

restitution owed); accord United States v. McAlpine, 32 F.3d 484, 490-91 (10th

Cir. 1994) (vacating restitution order and remanding for district court to make

specific factual findings because record did not indicate how district court arrived

14 at the specific restitution figure such that the reviewing court “was unable to

effectively review the court’s findings, and [was] unable to determine if the

findings represent the victims’ losses). We are unable to do so in this case due to

the presence of two major points of ambiguity in the record.

First, the government presented evidence that not all of the orders placed by

Huff were fraudulent. Indeed, Huff placed some orders with APC and S&G that

were filled as expected, but the fraudulent orders were ones that were placed but

(a) only partially filled, (b) not filled at all, (c) filled with personal items intended

for use by Deason, or (d) filled with another item. It is undisputed that RAFB

suffered some amount of loss due to its payments for orders that were never or

only partially filled under the fraudulent scheme. But the district court did not

make specific factual findings on how it calculated the exact dollar amount of the

victims’ actual losses. The government presented evidence of the total amount

charged to the government credit cards during the time period of the scheme, but a

portion of those charges were for goods that were ordered and actually provided

and thus would not count towards the restitution calculation. S.H. testified that the

kickbacks S.H. and Huff pocketed were from the “profits” of the scheme. It is

unclear from the sentencing transcript whether the district court determined if the

victim (RAFB) received any value from some of Huff’s fraudulent orders that

15 formed the basis for his substantive wire fraud convictions or if those orders were

ones in which no items were supplied and thus were pure “profit” as S.H.

suggested.

These facts are significant because any value of the services or items

received by the victim (RAFB) must be offset against the restitution order. In

Vaghela, the defendant, who worked for a medical clinic, accepted bribes in

exchange for sending the clinic’s lab work to a particular laboratory. 169 F.3d at

731. The Department of Health and Human Services ultimately paid $50,420.02

for some of this lab work, and the defendant received $23,400 in bribes. Id. This

court held that the district court erred in finding that the defendant should pay

$50,420.02 in restitution because it appeared that the lab work performed had been

medically necessary, and, as a result, the government received a valuable service in

exchange for its payments to the lab. Id. at 736. Thus, this court held that the

amount of restitution should be the amount the defendant received in bribes:

$23,400. Id.

In this case, the district court must make specific factual findings of whether

the victim suffered a loss and the amount of those actual losses. The court must

determine whether any value has been rendered to the victim in the form of a

service or product that should be offset against the restitution amount. As it

16 currently stands, the district court appeared to adopt the Presentence Investigation

Report’s (“PSR”) recommendation on the restitution amount and did not make

specific factual findings at the sentencing hearing as to how this amount was

calculated. The failure to explicate its methodology leaves us in doubt of the

propriety of the $86,938.03 restitution award.

Next, given the record currently before this court, it is also unclear whether

the district court’s restitution order of $86,938.03 was meant to include the

$42,068.64 that was attributable to S.H.’s share of the kickbacks. Specifically, did

the district court already account for this $42,068.64 (S.H.’s share of the

kickbacks) in S.H.’s restitution order,5 or did the district court intend that Huff

share jointly and severally in S.H.’s obligation for this amount in addition to the

kickbacks Huff himself received? This factual finding is significant because “[t]he

proper amount of restitution is the amount wrongfully taken by the defendant.”

United States v. Allen, 529 F.3d 390, 396 (7th Cir. 2008) (citation omitted).

Restitution is not intended to “provide a windfall for crime victims but rather to

ensure that victims, to the greatest extent possible, are made whole for their

5 The Presentence Investigation Report noted that the total amount of restitution owed to the United States Treasury for RAFB was $342,777. The PSR noted that the amount of restitution owed by Huff should be offset by the restitution ordered for the other co-conspirators: Deason, S.H., and J.H. It is unclear though whether the amount of restitution the district court ordered for S.H. included the $42,068.64 in kickbacks that S.H. retained.

17 losses.” United States v. Arutunoff, 1 F.3d 1112, 1121 (10th Cir. 1993) (citing 18

U.S.C. § 3663(b)(1)). Thus, if the district court has already accounted for that

amount in its separate restitution order in S.H.’s criminal judgment and did not

intend for the obligation to be jointly and severally shared by Huff, it would appear

that its existing restitution order would provide a windfall to the victim, who would

be compensated twice for S.H.’s share of the kickbacks—once by S.H.’s restitution

order and once by Huff’s.

Because the district court did not make specific factual findings of the

victims’ actual losses, as required by § 3664, we therefore are unable to determine

whether the amount of restitution imposed by the district court exceeded the

victims’ actual losses. Accordingly, we vacate the restitution order and remand for

a limited resentencing on the sole issue of the amount of restitution.

AFFIRMED IN PART, AND VACATED AND REMANDED IN PART.