U.S. v. Graham, No. 09-6013 (4th Cir. 6/16/2010)
| Decision Date | 16 June 2010 |
| Docket Number | No. 09-6013.,09-6013. |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ROBERT E. GRAHAM, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Appeal from the United States District Court for the Southern District of West Virginia, at Beckley, David A. Faber, Senior District Judge, (5:06-cr-00025-1).
ARGUED: Harry Preston Henshaw, III, Charleston, West Virginia, for Appellant.
Hunter Paul Smith, Jr., OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee.
ON BRIEF: Charles T. Miller, United States Attorney, Charleston, West Virginia, for Appellee.
Before MICHAEL, MOTZ, and GREGORY, Circuit Judges.
Affirmed by published opinion. Judge Motz wrote the majority opinion, in which Judge Michael joined. Judge Gregory wrote a dissenting opinion.
After the Government charged Robert E. Graham with 39 criminal offenses, he opted for a bench trial. The district court found him not guilty of all offenses except that charged in Count 14—embezzlement from his employer, an organization receiving in excess of $10,000 annually in federal funds. See 18 U.S.C. § 666 (2006). Graham appealed his sole conviction, and we reversed, holding that the Government had offered insufficient evidence to prove, "beyond a reasonable doubt, that Graham knowingly stole any money" as alleged in Count 14. See United States v. Graham, 269 F. App'x 281, 286 (4th Cir. 2008) (per curiam). Graham then moved for a certificate of innocence, a necessary prerequisite to recovery of damages from the Government for unjust conviction and imprisonment. See 28 U.S.C. §§ 1495, 2513 (2006). Concluding that Graham had not met the statutory prerequisites for a certificate of innocence, the district court refused to grant him one. Graham appeals. Because the district court did not abuse its substantial discretion in denying the certificate, we affirm.
Graham served as executive director of two related nonprofit corporations—the Council on Aging, Inc. ("COA") and All Care Home and Community Services, Inc. ("All Care")— for more than twenty years. The corporations, which shared a Board of Directors, provided services to the elderly and infirm and received well over $10,000 annually in federal funds.
For many years, Graham had no written employment contract with either corporation. However, in December 2001, he prepared and submitted employment contracts, which the Board's president signed. The contracts raised Graham's annual salary from $125,000 to $185,000.
In March 2002, COA agreed to assume responsibility for All Care's administrative expenses, including Graham's salary and benefits, and entered into an amended employment contract with Graham so providing. This amended contract contains the following sick-leave provision:
Beginning on the date of employment sometime around May 1975 until the termination of employment, [Graham] shall be entitled to accrue two days (16[ ]hours) per month paid sick leave time. Sick leave may be accumulated from year to year. Sick leave benefits may be converted into cash compensation if used for illnesses or upon the termination of this contract.
Thus, the contract authorized Graham to convert his sickleave benefits into cash compensation under only two circumstances—"illness[ ] or . . . termination of th[e] contract."
Nevertheless, in January 2003, without meeting these conditions, Graham sought Board permission to convert some of his sick leave to cash. Graham offered the Board the following brief justification for the request: The Board granted his request, and on that same day, Graham converted 1200 sick-leave hours to $106,728. Two more times in the spring of 2003, again without meeting the contractual conditions, Graham requested and received Board permission to convert some of his sick leave to cash. In all, during 2003, Graham converted sick leave to over $160,000 in cash.
Graham never again asked the Board to approve his conversion of sick leave to cash. But in both January and February 2004, again without meeting either of the contractual conditions, he converted sick leave to cash. In total, during 2004, Graham converted sick leave to over $30,000 in cash.
In response to ongoing state investigations of COA, the Board called an emergency meeting in March 2004, at which it revised the terms of Graham's employment contract and ordered Graham to return the money he received for sick leave in 2003. That same month, Graham heeded his attorney's advice and repaid all the money he had received for sick leave in both 2003 and 2004.
In July 2006, a federal grand jury in the Southern District of West Virginia returned a second superseding 39-count indictment against Graham. Both counts 13 and 14 charged him with embezzling money from COA by unauthorized conversion of sick leave to cash. See 18 U.S.C. § 666.1 Count 13 charged him with embezzling $160,092.81 in calendar year 2003; Count 14 charged him with embezzling $31,129 in 2004.
Graham pled not guilty to all counts and waived his right to a jury trial. During his five-day bench trial, the Government offered substantial evidence that at all relevant times, the COA Board members were elderly (their average age exceeded 80), hard of hearing, financially unsophisticated, and strongly influenced by Graham. The Government argued that this evidence required the district court to find that Graham could, and did, take advantage of the Board at every turn and so find him guilty of all 39 counts in the indictment.
The district court refused to so find. Rather, after the trial, at which Graham did not testify, the court acquitted Graham of all crimes but that charged in Count 14—embezzlement from his employer of $31,129 through sick-leave conversions to cash in 2004. Thus, the court found Graham not guilty of mail fraud, wire fraud, tax violations, embezzlement related to the purchase of a plasma television and the maintenance of a SEP IRA plan, or embezzlement with respect to the 2003 sick-leave conversion charged in Count 13. United States v. Graham, No. 5:06-00025, 2006 WL 2527613 (S.D.W. Va. Aug. 30, 2006).
The court explained its differing finding as to Counts 13 and 14 as follows:
Evidence establishes that, in 2003, defendant went to the boards of COA and All-Care and requested board approval prior to cashing in sick leave. The board's sanction of defendant's behavior, regardless of the ability of its members to fully comprehend the intricacies of the organizations' finances, leads this court to conclude that defendant did not violate 18 U.S.C. § 666(A)(1)(a) as to Count Thirteen. Even though the court doubts that the board members comprehended in detail all of the matters before them, they did consent. Their assent, regardless of their level of competence, creates a reasonable doubt as to Count Thirteen.
On the other hand, the evidence at trial did establish that defendant was guilty of Count Fourteen. It shows clearly that he did not return to the board and seek the same approval for his last buy out of sick leave even though he knew he was supposed to do so . . . .
. . . [T]he conclusion is inescapable that Graham cashed in the sick leave [in January and February 2004] without the approval of his board, knowing he needed board approval, thereby effectively stealing the money or converting it to his own use.
From the evidence taken at trial it is clear that defendant, an employee, took this money from COA without having any board approval whatsoever. These transactions each constituted major changes of the sort that required board approval. The fact that Graham sought board approval for the [2003] cashouts of sick leave is compelling evidence that he knew such approval was required. Graham cavalierly disregarded the board and treated large amounts of COA's money as if it were his own, diverting it to his personal use and to the detriment of those whom COA and All-Care were created and funded to serve.
As to the other counts—related to the plasma television, SEP IRA plan, and federal taxes — the court concluded that although Graham's conduct was "doubtlessly improper and unethical," id. at *1, and "inconsistent with Graham's duties as Executive Director," id. at *2, the Government had failed to prove beyond a reasonable doubt that Graham harbored the requisite intent to commit the crimes charged. Id. at *1-2, *4; see 18 U.S.C. § 666; 26 U.S.C. § 7206 (2006). The court similarly acquitted Graham of various fraud charges, see 18 U.S.C. §§ 1341, 1343, 1346 (2006), finding that the Government had not proven that Graham devised a scheme to defraud his employer. Graham, 2006 WL 2527613, at *2-5.
The district court concluded that [t]he events leading to this indictment are improper and outrageous and cannot be condoned by the court. Graham failed miserably to fulfill his duties as a public servant, engaging in conduct that squandered public resources and adopting a life-style that reflected discredit upon COA and All-Care, their directors and employees. Bad conduct in and of itself, however, does not equal criminal conduct. To convict a defendant of a crime, the government must establish beyond a reasonable doubt by competent evidence each and every element of each and every crime charged. Except for Count Fourteen, the government has failed to do so.
Id. at *5. The court imposed on Graham a within-Guidelines sentence of two years in prison and a $10,000 fine, and ordered him to forfeit any portion of the funds charged as stolen in Count 14 that he had not already returned.
Graham appealed, and we reversed his sole conviction on sufficiency grounds. Graham, 269 F. App'x at 286-87. We concluded that, because in 2003, "[t]he Board repeatedly authorized Graham to buy out his accrued...
To continue reading
Request your trial