681 F.3d 509 (3rd Cir. 2012), 11-1239, United States v. Andrews

Docket Nº:11-1239.
Citation:681 F.3d 509
Opinion Judge:FISHER, Circuit Judge.
Party Name:UNITED STATES of America v. Ashley ANDREWS, Appellant.
Attorney:Denise M. Francois (Argued), Hodge & Francois, St. Thomas, VI, for Appellant. Kim L. Chisholm, Office of United States Attorney, St. Thomas, VI, Paul A. Murphy (Argued), Office of United States Attorney, Christiansted, VI, for Ashley Andrews.
Judge Panel:Before: FISHER, GREENAWAY, JR. and ROTH, Circuit Judges.
Case Date:June 04, 2012
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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681 F.3d 509 (3rd Cir. 2012)

UNITED STATES of America

v.

Ashley ANDREWS, Appellant.

No. 11-1239.

United States Court of Appeals, Third Circuit.

June 4, 2012

Argued Dec. 5, 2011.

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Denise M. Francois (Argued), Hodge & Francois, St. Thomas, VI, for Appellant.

Kim L. Chisholm, Office of United States Attorney, St. Thomas, VI, Paul A. Murphy (Argued), Office of United States Attorney, Christiansted, VI, for Ashley Andrews.

Before: FISHER, GREENAWAY, JR. and ROTH, Circuit Judges.

OPINION

FISHER, Circuit Judge.

Ashley Andrews (" Andrews" ) was convicted of one count of conspiracy, in violation of 18 U.S.C. § 371, four counts of wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2, one count of program fraud, in violation of 18 U.S.C. §§ 666(a)(1)(B) and

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2, one count of making a false claim upon the Government of the Virgin Islands, in violation of 14 V.I.C. § 843(4), and one count of inducing a conflict of interest, in violation of 3 V.I.C. §§ 1102, 1103, and 1107. Andrews appeals his judgment of conviction and sentence. For the reasons set forth below, we will affirm the judgment of conviction, vacate the judgment of sentence on Counts One through Six, and remand to the District Court for resentencing.

I.

In 1985, the Government of the Virgin Islands (" GVI" ) and the United States entered into a consent decree in the District Court of the Virgin Islands, pursuant to which the GVI was to make improvements to its sewage system. For over fifteen years, the GVI failed to make the necessary repairs. In October 2001, the District Court held a hearing, requiring the GVI to show cause why it should not be held in contempt for failure to comply with the consent decree. Around this time, Ohanio Harris (" Harris" ), who, in his capacity as Special Assistant to the Governor of the Virgin Islands, was responsible for handling issues regarding the sewage system, began to promote Andrews as a contractor who could repair the sewage system. Andrews had created a construction company called Global Resources Management (" GRM" ) in 2001. GRM, however, could not obtain the sewer repair contract without a Virgin Islands business license. Because a " tax clearance" letter was required before such a license could be issued, and Andrews could not obtain a " tax clearance" letter on his own, when GRM applied for the license in late February 2002, Harris was listed as the president of GRM on the application. Prior to February 2002, Andrews had served as president of GRM, and on or about March 8, 2002, Andrews again replaced Harris as president of GRM.

On March 1, 2002, Harris and Andrews traveled to Tortola, British Virgin Islands to meet with representatives of the Berger Group, an American engineering firm. At this meeting, Harris, who was introduced as the Special Assistant to the Governor, vouched for Andrews, stating that Andrews had organized local contractors to work as subcontractors for large firms. Harris also indicated that he could arrange a meeting with the Governor to discuss awarding the sewage system contract to the Berger Group. Harris testified that after this meeting, he and Andrews went to a hotel, and Andrews paid him $2,500 in cash. The payment, Harris explained, was " for what [he] ha[d] done for [Andrews]." Harris deposited the check into his bank account and then used the money to make a mortgage payment on his home.

Around this time, Harris began to hold himself out as a liaison between GRM and Andrews, and the Virgin Islands Department of Public Works (" DPW" ). Harris arranged a meeting between the Governor and Andrews to discuss the sewer repair work. After this meeting, Andrews asked Harris to help him get the contract, and Harris replied that he would " see what [he] c[ould] do." Harris testified that in exchange for his assistance in obtaining the contract, Andrews agreed that he would hire Harris to work at GRM after Harris retired from government service. On March 24, 2002, Harris again traveled to Tortola to meet with Andrews and representatives from the Berger Group. Harris testified that he told Andrews that he expected to be compensated for whatever assistance he provided, and Andrews assured him that he would be paid. Harris subsequently set up additional meetings between Andrews, the Governor, and other GVI officials. At some point, GRM submitted

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a $3.6 million bid for the sewer repair work. The Governor testified that Harris told him " that [GRM] was a company that we should look at and see if they can do the job." The sewage system repair contract was not advertised, and there were no other contractors bidding for the project, despite the fact that, even in emergency situations, there were generally three bidders. Wayne Callwood (" Callwood" ), the Commissioner of DPW, testified that " [b]asically, this project was sole-sourced to GRM."

The GVI tentatively accepted GRM's bid in October 2002, on the condition that GRM procured a performance bond and a payment bond, each for 100 percent of the contract price ($3.6 million). On October 7, Campbell Malone (" Malone" ), a Certified Public Accountant acting on behalf of GRM, contacted Alan Feuerstein (" Feuerstein" ), a New York attorney, for assistance in obtaining the bonds. Feuerstein put Malone in touch with Wayne Price (" Price" ), a surety bond manager at Melwain Enterprises, in Long Island, New York. On October 10, Price faxed Malone, who was in the Virgin Islands, a collection of bond application paperwork. Price sent additional bond-related paperwork to Malone on October 11(fax) and October 17 (email).

On October 18, Malone emailed Price a completed bond application package, which was signed by Andrews. This application contained numerous false representations, including statements that: (1) Andrews was divorced; (2) Andrews owned a home valued at $720,000, when, in fact, his daughters owned the home; (3) Andrews had a one-third interest in a $150,000 property located at 113 Estate Grove Place, St. Croix; (4) Andrews had $7,000 in cash on deposit at the Banco Popular as of September 30, 2002; and (5) Andrews had stock in GRM worth $600,000. In the " work on hand" section of the application, which asked for a list of all of the contracts that GRM had secured but not yet completed, Malone and Andrews listed the following five " contracts" worth a total of $26 million: (1) a professional services contract worth $1.5 million; (2) a contract with the GVI for sewage system repair in the amount of $7.5 million, twice the price of the actual contract; (3) a construction management services contract for Peebles Hospital in the British Virgin Islands valued at $1 million; (4) a development contract worth $12 million; and (5) " work on hand" for processing municipal garbage. At trial, the Government proved that none of these contracts had been obtained. Additionally, the bond application falsely stated that: (1) GRM and its owners were not involved in any litigation, whereas Andrews was in the midst of a lawsuit related to another company that he owned; (2) GRM had a $350,000 " investment" in an affiliate, which in reality was worthless; and (3) that Robert Jarnis was a director of GRM, when he actually worked for the Berger Group in Massachusetts.

GRM had difficulty obtaining the bonds without a construction contract signed by the Governor. Accordingly, the Virgin Islands Attorney General advised the Governor to sign the contract, on the condition that no Notice to Proceed would be issued by the Department of Property and Procurement (" P & P" ) until GRM successfully obtained the bonds. The Governor signed the sewer system repair contract on December 20, 2002.

On January 23, 2003, the United States filed a motion to enjoin the enforcement of the contract. On January 28, before GRM was able to obtain the required bonds and before any Notice to Proceed was issued, the Governor terminated the contract. The GVI subsequently asked the District Court to remove the injunction, but the

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District Court refused, and enjoined the GVI from re-contracting with GRM. United States v. Gov't of Virgin Islands, 248 F.Supp.2d 420 (D.Vi.2003), affirmed in part and vacated in part by United States v. Gov't of Virgin Islands, 363 F.3d 276 (3d Cir.2004).

On June 12, 2003, Andrews submitted to the GVI a $748,304.92 post-termination claim, seeking payment for the time and resources GRM had expended preparing its bid. This claim included numerous false statements and duplicate charges. Moreover, as evidence adduced at trial established, Andrews's entire scheme was fraudulent. Callwood testified that " to the best of [his] knowledge, [GRM was not] capable of doing construction work."

Andrews, Harris, and Malone were indicted on February 20, 2004. The grand jury returned a Second Superseding Indictment (" Second Superseding Indictment" or " Indictment" ) on June 10, 2004, which charged Andrews with one count of conspiracy, in violation of 18 U.S.C. § 371 (Count One), four counts of wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 2 (Counts Two through Five), one count of program fraud, in violation of 18 U.S.C. §§ 666(a)(1)(B) and 2 (Count Six), one count of fraudulent claims upon the Government of the Virgin Islands, in violation of 14 V.I.C. § 843(4) (Count Seven), and one count of inducing a conflict of interest, in violation of 3 V.I.C. §§ 1102, 1103, and 1107 (Count Eight). Harris pled guilty, and Malone and Andrews went to trial. They were initially tried on the charges in the Second Superseding Indictment in May 2006, but the jury was unable to reach a verdict. They were re-tried...

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