United States v. Windle

35 F.4th 62

• Court: Court of Appeals for the First Circuit
• Decided: May 26, 2022
• Docket: 21-1477P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 21-1477

UNITED STATES OF AMERICA,

Appellee,

v.

JEFFREY S. WINDLE,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before

Lynch, Thompson, and Gelpí, Circuit Judges.

Zainabu Rumala, Assistant Federal Public Defender, on brief for appellant. Rachael S. Rollins, United States Attorney, and Randall E. Kromm, Assistant United States Attorney, on brief for appellee.

May 26, 2022 LYNCH, Circuit Judge. Within months of being released

from a fifteen-year prison sentence for convictions of mail and

wire fraud, money laundering, and tax evasion, Jeffrey S. Windle

once again engaged in fraud, in violation of the terms of his

supervised release. After Windle stipulated to the violations,

the district court added to the terms of his supervised release a

monitoring condition as to his computer activities to provide

Windle with needed incentives for him to comply with the law.

Windle argues on appeal, first, that this condition is unwarranted,

and second, that it is vague and overbroad. Only the first

objection was preserved.

The imposition of the computer monitoring condition was

not an abuse of discretion, as it was more than warranted by

Windle's long and extensive history of fraudulent use of computers

to obtain over $14 million from his victims and Windle's prompt

recidivism upon his release from imprisonment. Further, the

unpreserved arguments fail on plain error review, as there was no

error at all. We affirm.

I.

A. Procedural History

Windle pleaded guilty in March 2009 to a twenty-four-

count superseding indictment charging him with mail and wire fraud,

money laundering, and tax evasion. He was sentenced on June 23,

2009 to fifteen years of imprisonment, followed by three years of

- 2 - supervised release. He also was ordered to pay more than $14.5

million in restitution.

Windle was released from prison and began his first term

of supervised release in March 2020. Probation discovered by

October 2020 that Windle had violated conditions of his release,

and identified further violations in February 2021. Windle

stipulated to the violations at a revocation hearing held on May

5, 2021. The district court revoked Windle's supervised release.

The court sentenced Windle to a "12 month[] period [of

imprisonment], so that it will be a full 12 months, followed by

two years of supervised release."

The district court reimposed the previous conditions of

supervision and also imposed several new conditions. One of the

new conditions is the subject of this appeal and states:

The defendant shall allow the US Probation Office to install software designed to monitor computer activities on any computer and smartphone the defendant is authorized to use. This may include, but is not limited to, software that may record any and all activity on the computers the defendant may use, including the capture of keystrokes, application information, internet use history, email correspondence, and chat conversations.

Defense counsel did not object contemporaneously to the scope of

the computer monitoring condition, but did question whether the

condition was "appropriate" and "reasonably related to Mr.

Windle's conviction here," positing that the violations involved

- 3 - "more face-to-face transactions than the use of a computer." The

district judge responded: "No. I think the fraud aspects justify

it." We next describe this fraud.

B. Factual History

As the district court observed at Windle's first

sentencing hearing in 2009, Windle has "a history of . . . stealing

by fraud[,] deception, [and] misuse." This history began as early

as 1990, when Windle was first convicted as an adult of attempted

larceny for trying to defraud a store clerk. Since then, he has

been convicted of mail fraud, wire fraud, tax evasion, money

laundering, larceny, fraudulent use of a credit card, utter fraud,

forgery, and false claims.

Relevant here, between 2003 and 2008, Windle defrauded

his former employer, Cambium Learning, Inc. ("Cambium"), of nearly

$14 million and the Congregational Church of South Dennis ("CCSD")1

of close to $650,000. After serving more than a decade in prison

and while on supervised release in 2020, he again engaged in fraud

in an attempt to obtain a Range Rover and multi-million-dollar

properties. As next described, he frequently used computers to

execute this fraudulent activity.

1 CCSD is also commonly referred to as the South Dennis Congregational Church, or "SDCC."

- 4 - 1. Fraud on Cambium

In 2004, Windle was hired to be the Director of Budget

and Finance at Cambium, a company that provides instructional

materials, services, and technology to educators working with

struggling students. Windle was responsible for overseeing

various financial functions at Cambium, including the preparation

of consolidated financial statements, maintenance of financial

reporting records, closing of the company's books, payment of

company expenses, initiation of wire transfers, and writing and

signing of company checks.

Windle's fraud involved the purchase of two pieces of

real estate, one in Massachusetts and one in Florida. In the first

year he was hired, Windle wrote himself two checks totaling more

than $1.9 million from Cambium's checking and money market

accounts. He used the money to purchase the house in

Massachusetts, which his family moved into in 2005. Windle again

wrote a check from Cambium's checking account in 2006, that time

in the amount of approximately $1.16 million. After falsely

representing to the company's Chief Financial Officer that the

check was for a transfer of funds between Cambium accounts, Windle

used the money to purchase a bank check for a vacation home in

Florida.

Around the same period, Windle began using his email to

direct Cambium's accounts payable staff to issue checks that Windle

- 5 - ultimately used for his own personal benefit. He first sent emails

asking for checks in amounts totaling close to $180,000, all made

payable to "Jeffrey S. Windle." Windle falsely represented to the

staff that such payments were reimbursements for business expenses

he incurred. The staff issued Windle the checks, which he

deposited into his personal checking account and used to pay for

home renovations and to purchase cars and boats.

Windle also directed via email the accounts payable

staff to issue checks made payable to CCSD for "consulting fees"

pursuant to Cambium's "contract" with CCSD. Cambium had no

contract with CCSD. Cambium's accounts payable staff issued thirty

checks in accordance with Windle's email instructions, for a total

of approximately $275,000. Windle deposited the checks into CCSD's

bank account and then transferred the funds into his personal

account for his and his family's personal use.

Between March 2006 and April 2008, Windle also manually

wrote numerous checks from Cambium's Bank of America checking

account made payable to "SDCC" and "CCSD," and then emailed

Cambium's accounts payable to conceal his diversion. His emails

instructed the accounts payable staff to record the checks in

Cambium's books as inventory purchases. There had been no such

inventory purchases. Windle deposited these unauthorized checks,

which totaled approximately $4.8 million, into CCSD's account

before transferring the funds into his personal account. He set

- 6 - up a phony post office box address in the name of Bank of America

and fraudulently filled out bank confirmation forms to deceive

auditors as to the true balance of Cambium's bank account.

From June 2007 through April 2008, Windle used his

authority to pay Cambium's vendors from a company account in

Colorado (the "Sopris West" account) to direct numerous wire

transfers so that he could purchase real estate, a yacht and other

boats, a Mercedes, a golf club membership, and a landscaping

service. Windle further used email to ask the Operations Manager

at the company's bank for an address change for the Sopris West

account so that the account's bank statements would be mailed to

Windle (rather than to Cambium's senior staff accountant). Windle

then prepared false spreadsheets for Cambium that purported to

reflect the Sopris West account's banking transactions and account

balances to prevent discovery of the low balance in the account.

Windle obtained a total of approximately $5 million from these

wire transfers.

2. Fraud on the Church

Windle also defrauded his church. Windle and his family

were parishioners at CCSD, and he became the volunteer treasurer

of the church in 2003. As the treasurer, Windle oversaw and had

signature authority over several of CCSD's bank accounts. Instead

of closing certain of those accounts as directed, Windle kept them

- 7 - open and used them to launder the money he stole from Cambium and

the church.

Between 2003 and 2005, Windle wrote himself and his wife

collectively seven checks from CCSD's accounts for a total of

approximately $278,250. He stole an additional approximately

$434,000 from the church between December 2003 and January 2008 by

withdrawing cash or writing checks to himself or to third parties.

Windle took steps to conceal his fraud by fabricating

monthly financial statements and annual reports. He submitted

balance sheets that significantly overstated the amount of funds

in the church's accounts. Windle also created phony audit report

letters by fabricating the letterhead of an established Certified

Public Accountant ("CPA") firm. He did this to convince CCSD's

Board of Directors that the church's finances had been audited by

independent CPAs, although they had not.

Windle's schemes were uncovered in 2008. Law

enforcement discovered that Windle had failed to report his fraud

proceeds on his federal tax returns for the taxable years 2004

through 2007, and that he had prepared a fraudulent federal income

tax return (Form 1040) for each year, which he filed

electronically.2

2 Windle was convicted in 1997 of false claims, having electronically filed false U.S. Income Tax Returns (Forms 1040) for the 1993 and 1994 tax years based on fabricated W-2 Forms.

- 8 - Windle served more than a decade in prison for these

offenses. Within one year of his release in March 2020, Windle

engaged in the following fraudulent conduct:

3. Violations of Supervised Release

On October 13, 2020, Windle was arrested by Barnstable

Police Officers and charged with larceny over $1,200 by false

pretenses. In September 2020, Windle had agreed to make a wire

transfer to a car dealership in the amount of approximately

$118,000 for the purchase of a Range Rover, although he did not

have sufficient funds to do so. The transfer failed, and Windle

agreed to bring a personal check in its place. Based on this

promise, the car dealership permitted Windle's girlfriend to take

possession of the vehicle. Windle provided the dealership with a

personal check that same day, but the check did not clear. Windle

had placed a stop payment on the check. When the dealership tried

contacting Windle about the issue, Windle avoided the calls, so

the dealership contacted the police.

The Probation Office questioned Windle about the

incident. He admitted he did not have the funds to cover the

expense and did not explain his conduct.

Around the same time, Windle lied to the Probation

Office, saying that he did not sign (electronically) a Purchase

and Sale agreement for the purchase of a $4 million home as

"Jeffrey Whitney." As the Probation Office inquired about the

- 9 - purchase, it also discovered that Windle had failed to disclose,

as he was required to, all of his financial accounts. Windle

previously had told the Probation Office that his only financial

account was a checking account with Martha's Vineyard Bank.

Meanwhile, Windle had provided the real estate broker with a bank

statement in the name of Jeffrey Whitney from a retirement savings

account as proof of funds for the real estate transaction. The

account reflected a balance of more than $7 million. Upon further

inquiry from the Probation Office, Windle admitted he had a

different retirement account in his own name and provided a

screenshot via text message as proof of the account. That account

had a balance of approximately $350,000.

Windle thereafter was summoned and appeared before a

magistrate judge on December 4, 2020 for an initial appearance on

revocation proceedings. He was released pending the final

revocation hearing with an additional condition that he must use

his true name, which he promptly violated. Within one month,

Windle was caught trying to buy a $15 million home, presenting

himself as Jeffrey Leonard with a deposit check that never cleared.

In sum, for the underlying conviction, the record shows

that Windle used email to defraud Cambium and his church of

millions of dollars. The record further shows that he also used

his computer to conceal his schemes by creating fraudulent

spreadsheets, financial statements, annual reports, and audit

- 10 - letters and letterhead. As for the violation of his supervised

release, Windle used a computer to electronically sign the

fraudulent Purchase and Sale agreement and to access a retirement

account he was hiding from the Probation Office.

II.

We review preserved objections to the imposition of a

special condition of release for abuse of discretion and

unpreserved objections for plain error. United States v.

McCullock, 991 F.3d 313, 317 (1st Cir. 2021). "[W]e will find an

abuse of discretion only when left with a definite conviction that

'no reasonable person could agree with the judge's decision.'"

Id. (quoting United States v. Cruz-Ramos, 987 F.3d 27, 41 (1st

Cir. 2021)). This court will find plain error only if the

defendant shows "there [was] (1) an error (2) that is plain, and

that the error (3) affects substantial rights and (4) seriously

impairs the fairness, integrity, or public reputation of judicial

proceedings." United States v. Perazza-Mercado, 553 F.3d 65, 74–

75 (1st Cir. 2009) (quoting United States v. Prochner, 417 F.3d

54, 59 (1st Cir. 2005)).

In assessing the validity of a special condition,

we apply 18 U.S.C. § 3583(d) and U.S.S.G. § 5D1.3(b), which require that special conditions cause "no greater deprivation of liberty than is reasonably necessary" to achieve the goals of supervised release, 18 U.S.C. § 3583(d)(2), and that the conditions be "reasonably related" both to these goals

- 11 - and to the "nature and circumstances of the offense and the history and characteristics of the defendant[,]" 18 U.S.C. § 3583(d)(1); see also 18 U.S.C. § 3553(a)(1).

Id. at 69. The goals of supervised release include

"deterr[ing] . . . criminal conduct," and "protect[ing] the public

from further crimes of the defendant." 18 U.S.C. §§ 3553(a)(2)(B)-

(C), 3583(d)(2).

This court has upheld broad restrictions on internet

access as a condition of supervised release "where (1) the

defendant used the internet in the underlying offense; (2) the

defendant had a history of improperly using the internet to engage

in illegal conduct; or (3) particular and identifiable

characteristics of the defendant suggested that such a restriction

was warranted." United States v. Aquino-Florenciani, 894 F.3d 4,

7 (1st Cir. 2018) (emphasis added) (quoting United States v.

Hinkel, 837 F.3d 111, 126 (1st Cir. 2016)).

As the recitation of facts demonstrates, the computer

monitoring condition was warranted. It is reasonably related to

the goals of supervised release, Windle's long history of fraud,

and his high risk of reoffending.

"This is not the case of a defendant who 'has no history

of impermissible internet use' and for whom 'the internet was not

an instrumentality of the offense conviction.'" See United States

v. Vélez-Luciano, 814 F.3d 553, 560 (1st Cir. 2016) (quoting

- 12 - Perazza-Mercado, 553 F.3d at 69); see also United States v.

Browder, 866 F.3d 504, 512 (2d Cir. 2017) (upholding computer

monitoring condition due to defendant's illicit computer usage);

United States v. Dolivek, 510 F. App'x 573, 574 (9th Cir. 2013)

(unpublished) (same). Windle's thirty-year criminal history and

habitual engagement in fraud using his computer, email, and the

internet, make the condition reasonable. He had been undeterred

by his twelve years in prison and his initial terms of supervised

release. The district court reasonably concluded that additional

conditions and incentives for him to comply with the law were

needed.

Windle's argument as to the fact that no computer or

smartphone monitoring condition had been imposed during his

initial supervision works against him. Indeed, Windle rapidly

returned to fraudulent activities during this initial supervision

in the absence of such a condition, showing the original conditions

were insufficient. This clearly supports the special condition at

issue here. United States v. Stergios, 659 F.3d 127, 134 (1st

Cir. 2011) ("It was . . . reasonable for the district court to

find, the second time around, that restrictions on [defendant's]

internet usage were necessary to deter him from committing further

crimes."). Windle's "status as a repeat offender suggested that

an internet restriction was warranted." Id. at 135.

- 13 - Windle's arguments that the condition on computer device

usage is overbroad and vague fail at step one of plain error

review. Windle focuses primarily on his overbreadth argument,

contending that the monitoring condition is overly intrusive, even

though his supervision is for only two years and the challenged

condition is not a complete or partial ban on Windle's computer or

internet usage. Cf. United States v. Ramos, 763 F.3d 45, 63 (1st

Cir. 2014) ("[As compared to broader internet bans,] monitoring

and filtering systems, searches of any computer equipment, and

searches of other electronic or data-storage devices upon

reasonable suspicion . . . are narrowly tailored tools."); Perazza-

Mercado, 553 F.3d at 73 ("[O]ur concern regarding a categorical

residential internet ban does not imply that [defendant] is

entitled to unlimited internet access, particularly if a

'relatively narrowly-tailored condition' would 'readily

accomplish[] the goal of restricting use of the Internet and more

delicately balance[] the protection of the public with the goals

of sentencing." (third and fourth alterations in original)

(quoting United States v. Zinn, 321 F.3d 1084, 1093 (11th Cir.

2003))).

Windle next argues that the district court should have

further narrowed the computer condition, such that the Probation

Office be required to have reasonable suspicion of further criminal

conduct or further violation of a condition of supervised release

- 14 - before it can monitor Windle's computer usage. He cites to and

misreads Stergios, 659 F.3d at 134. Such a limitation is not

necessary here. First, this court previously has endorsed the

imposition of computer monitoring and filtering systems, when

compared to broader internet and computer bans, as "narrowly

tailored tools" for deterring a defendant from using a computer to

commit further crimes. See Ramos, 763 F.3d at 63. Second, Windle

has already violated the conditions of his supervised release once.

For the reasons stated above, we reject Windle's

argument and affirm.

- 15 -