U.S. v. Griffith

• Decision Date: 27 October 2009
• Docket Number: No. 07-5156.,07-5156.
• Citation: 584 F.3d 1004
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Debbie L. GRIFFITH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

584 F.3d 1004

UNITED STATES of America, Plaintiff-Appellee, v. Debbie L. GRIFFITH, Defendant-Appellant.

No. 07-5156.

United States Court of Appeals, Tenth Circuit.

October 27, 2009.

Barry L. Derryberry, Assistant Federal Public Defender (Julia L. O'Connell, Acting Federal Public Defender, with him on the briefs), Tulsa, OK, for Defendant-Appellant, Debbie L. Griffith.

Leena Alam, Assistant United States Attorney (David E. O'Meilia, United States Attorney, with her on the brief), Tulsa, OK, for Plaintiff-Appellee, United States of America.

Before BRISCOE, BRORBY, and EBEL, Circuit Judges.

EBEL, Circuit Judge.

Debbie L. Griffith ("Griffith") pled guilty to embezzling more than $1,000 from the U.S. Department of Veterans Affairs ("VA"), in violation of 18 U.S.C. § 641. Griffith misappropriated and converted to her own use VA benefit payments belonging to David Norvell ("Norvell"), for whom she acted as fiduciary and benefits payee. The district court sentenced Griffith to eighteen months' imprisonment and ordered her to pay Norvell restitution of $27,002.

In this appeal, Griffith challenges both the district court's calculation of loss — and its consequent determination of her base offense level — under the Sentencing Guidelines, U.S.S.G. § 2B1.1, and its calculation of restitution under the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A(c)(1)(A)(ii). Exercising jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a), we AFFIRM the district court's loss calculation, VACATE the restitution order, and REMAND to the district court for re-calculation of restitution.

I. FACTUAL AND PROCEDURAL BACKGROUND

Norvell, a veteran of the Korean War, began receiving VA disability benefit payments in 1960, when he was rated 10% disabled for frostbite to his feet. Griffith met Norvell at the V.F.W. in late 2000, shortly before the death of Norvell's wife of forty-five years. The two became friends, and after Norvell's wife died, Griffith began helping him to manage his daily affairs. By September of 2001, Griffith was assisting Norvell with his personal finances. Griffith, who had been married during the early days of her friendship with Norvell, was divorced in July of 2002, and eventually the two began dating.

By October of 2002, according to VA records, Norvell was suffering from post-traumatic stress disorder ("PTSD") in addition to frostbite, and his disability rating was increased to 30% as a result of the combination of those conditions. The VA deemed Norvell "incompetent to handle [his] own financial affairs" on January 13, 2003 (R. vol. III. at 69), at which time his "overall or combined [disability] rating [was] 60%" (R. vol. I, tab 11, at Exh. 3, at 2.).¹ Two months later, on March 12, 2003 Griffith signed a VA form entitled "Responsibilities of a Federal Payee of VA Funds" (the "payee agreement") and was appointed as Norvell's fiduciary and payee. (R. I, tab 11, at Exh. 2.)

As a federal payee for a VA beneficiary, Griffith was "responsible for receiving all [Norvell's] income and seeing that [Norvell's] just debts [were] paid." (Id. at 1.) The payee agreement instructed Griffith that she "must establish a custodial checking account and submit verification in writing from [her] bank when this is done." (Id.)² It further instructed her as follows:

3. All disbursements are to be made by check from the custodial checking account. No checks for cash, no cash withdrawals, no exceptions. You must keep accurate records at all times.

4. You must obtain prior approval from [the VA] office for expenditures over $200. (However, this does not include medical needs or normal monthly payments such as rent, utilities, food.)

5. Funds are to be used for the beneficiary only. You cannot borrow, loan, or give as gifts, funds belonging to the beneficiary.

(Id.) Griffith also signed, at this time, a VA fiduciary form in which she "agree[d] to furnish if requested" periodic accountings of Norvell's VA benefit funds.³ The VA made its first payment to Griffith as payee, a lump sum of $1,419, on March 24, 2003. Effective July 28, 2003, Norvell's disability rating was raised to 100%, based on his PTSD. As a result of this adjustment, Norvell's benefit payments increased from roughly $800 monthly to roughly $2200 monthly.

In March of 2004, a VA field examiner visited Griffith and Norvell and reported that Norvell appeared to be well cared-for. The field examiner also reported that the "fiduciary [-]beneficiary relationship" was "good" and that "[t]he veteran and payee plan[ned] to be married on April 3rd." (R. vol. III at 79.) Griffith and Norvell married on April 3, 2004, and Griffith became Norvell's VA "spouse-payee" soon thereafter. As a result of the marriage, Norvell's disability payments were increased to $2,366 monthly. In notifying Griffith of this change, the VA informed her that "[t]he veteran's monthly benefits include[d] an additional allowance for [her], as a dependent of the veteran." (R. vol. I, tab 11, Exh. 5, at 1.) At the time of the marriage, Griffith was thirty-nine years old, and Norvell was seventy-three.

Within a month of the marriage, Norvell's family began to suspect that Griffith had been defrauding him before the marriage and was continuing to defraud him. Norvell's bank accounts, which typically had held moderate end-of-month balances in 2001 and low end-of-month balances in 2003, had been depleted to near zero or negative balances by the spring of 2004. Indeed, Norvell had declared bankruptcy on April 2, 2004, the day before his marriage to Griffith. After the family confronted Norvell with their suspicions, he moved out of the couple's home in June of 2004, aided by his son Tim and the Broken Arrow, Oklahoma, police. Norvell then notified the VA that he was divorcing Griffith because she had run off with his money. Norvell's stepson, James Stevens, replaced Griffith as Norvell's fiduciary and VA benefits payee on July 19, 2004. The couple divorced in November of 2004.

The VA's investigation of Griffith's handling of Norvell's benefits covered the period from March 24, 2003, when she received the first payment in her role as payee, to April 1, 2004, when she received the last payment before she was designated as spouse-payee. Agent Sewell determined that during that period, $22,870.27 in electronic deposits had been made to Norvell's checking account. Griffith did not establish a custodial checking account, as required by the VA fiduciary form, but instead added her name to one of Norvell's existing accounts. Agent Sewell further determined that while she was acting as Norvell's payee, Griffith made unauthorized cash withdrawals of $17,520 from Norvell's benefits-holding account, and that she wrote on that account several checks "that were clearly outside of [her] fiduciary duty." (R. vol. III at 50.) On January 18, 2006, Griffith gave Agent Sewell a written statement admitting that while she was acting as Norvell's fiduciary and was "responsible for approximately $20k in VA funds," she "misus[ed]" those funds. (R. vol. I, tab 11, Exh. 6 at 1).

Griffith was indicted on a single count of theft of U.S. property in violation of 18 U.S.C. § 641, under a grand jury charge that she "did intentionally, willfully and knowingly embezzle, steal, purloin, and convert to her own use money in excess of $1,000.00." (R. vol. I, tab 2.) The indictment charged that this money was in the form of VA benefit checks "of a value of approximately $22,870.00." (Id.) Griffith pled guilty to this single count but did not make a plea agreement.

Under the 2006 edition of the Sentencing Guidelines, U.S.S.G. § 2B1.1(a)(2), Griffith's base offense level was six. The offense level was increased by two because the victim was vulnerable, id. § 3A1.1(b)(1), and additionally by two because Griffith abused a position of private trust, id. § 3B1.3. The final Presentence Investigation Report ("PSR")⁴ calculated loss at $83,739, which resulted in a further increase of eight offense levels. Id. § 2B1.1(b)(1)(E). The offense level was decreased by three because Griffith accepted responsibility for her conduct. U.S.S.G. § 3E1.1. Coupled with Griffith's Criminal History Category of I, her resulting offense level of fifteen produced an advisory sentencing range of eighteen to twenty-four months' imprisonment. The PSR further calculated Griffith's mandatory restitution at $27,002, payable to Norvell.

Griffith objected to the PSR's calculation of both loss and restitution. Regarding the loss calculation, she argued both that the Government had not proven contested facts regarding offense conduct, and that the PSR impermissibly included non-criminal conduct as relevant conduct under U.S.S.G. § 1B1.3. Regarding restitution, she argued that the PSR's calculation impermissibly included losses caused by conduct outside the offense of conviction.

The district court overruled each of Griffith's objections. First, the district court explained that the acts described as relevant conduct in the PSR "clearly constitute law violations involving crimes [such] as larceny, embezzlement, [and] unauthorized use of access devices," and that those acts — including Griffith's "sham" marriage to Norvell — were "part of the same course of conduct and a common scheme or plan as the offense of conviction." (R. vol. IV at 6, 8.) The district court went on to find that the Government had proved by a preponderance both the direct loss and estimated loss portions of the PSR's loss calculation. Finally, the district court found that "[o]nly losses derived directly from Veterans Administration funds" were used to calculate restitution, which thus was based solely on "the specific conduct [underlying] the offense of conviction." (Id. at 13.)

The district court sentenced Griffith to eighteen months' imprisonment and imposed restitution of $27,002. Griffith timely appealed.

II. Discussion

A. Griffith's challenge to the district court's loss...