U.S. v. Henderson
| Decision Date | 01 August 2005 |
| Docket Number | No. 04-4151.,04-4151. |
| Citation | 416 F.3d 686 |
| Parties | UNITED STATES of America, Appellee, v. Denise Marie HENDERSON Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Steven H. Silton, argued, Minneapolis, MN (Marshall H. Tanick, Charles A. Horowitz, and Shawn L. Pearson, on the brief), for appellant.
Joseph J. Dixon, III, argued, Asst. U.S. Atty., Minneapolis, MN, for appellee.
Before RILEY, BOWMAN, and BENTON, Circuit Judges.
A jury convicted Denise Marie Henderson of five counts of wire fraud, one count of concealment from the Social Security Administration (SSA), and three counts of making false statements to SSA, in violation of 18 U.S.C. § 1343 and 42 U.S.C. § 408(a)(3), (4). She appeals, challenging the evidence, indictment, jury instruction, sentence, and jurisdiction of the district court.1 Jurisdiction being proper under 28 U.S.C. § 1291, this court affirms.
In 1995, Henderson was injured in a car accident. In 1996, six months before applying for social security disability income (SSDI), she flew to Russia to adopt a child. She told the social worker that she owned her own business, worked 15 to 20 hours a week, and was in good health and physically active. Weeks before applying for SSDI, she sought cosmetic surgery, informing the surgeon she had no significant past or current medical illnesses.
In 1997, Henderson applied for SSDI, telling SSA she could not work. She claimed she had: 4 to 5 migraines a week; vertigo; numbness; and could not walk, kneel, climb, bend, lift, reach, concentrate, do chores or errands, attend to personal grooming needs, drive for more than 20 minutes, or sit or stand for more than 20 minutes. The SSA denied her application initially and on appeal. While appealing, Henderson worked for her husband's company, Marketing That Works, Inc. She instructed the employees not to tell anyone she worked there. In 1999 — after Henderson testified at a hearing — an Administrative Law Judge reversed SSA, and awarded her benefits, retroactive to June 1996. Henderson promised to notify SSA if her medical condition improved or if she returned to work.
While applying for and receiving SSDI, Henderson had 21 cosmetic consultations, never alerting the doctors to any serious medical conditions. During the four years she received SSDI, Henderson competed in beauty pageants. In 1998, she made seven appearances as Mrs. Washington County and won the Mrs. Minnesota International pageant. In 1999 and 2000, she made over 200 appearances as Mrs. Minnesota. Between 1999 and 2003, Henderson also competed in Mrs. United States, Ms. U.S. Continental, Mrs. International, and All American — which required travel to Las Vegas, Nevada; Tyler, Texas; Orlando, Florida; and Pigeon Forge, Tennessee. Henderson also flew for vacations to: Acapulco, Jamaica, New Zealand and Australia in 1996; Texas and New York in 1998; Hawaii in 1999; and Cancun in 2000.
A search warrant executed at Henderson's home revealed she was operating two businesses out of her home while receiving SSDI. Police found invoices, checks, contracts, press releases, credit card receipts, and emails in Henderson's name for her businesses, Crowning Moments, Inc. (CMI) and Queen Bear's Closet (QBC). The documents disclosed that she arranged contracts, attended meetings, kept finances, solicited clients, found sponsors and conducted marketing for both enterprises. As director of CMI, Henderson directed seven pageants between 2001 and 2003. QBC was a consignment shop that sold used pageant wear.
In total, Henderson submitted eight reports to SSA stating she had a disabling condition resulting in chronic migraines, neck and back pain, numbness, and other ailments. Prior to 2003, Henderson failed to report to SSA her activities or pageant competitions. When she did list her hobbies, she stated she worked eight hours a week for CMI, and attended pageants when she felt good.
Primary jurisdiction permits a court to dismiss or stay an action in deference to a parallel administrative agency proceeding. Jackson v. Swift Eckrich, Inc., 53 F.3d 1452, 1456 (8th Cir.1995). This promotes uniformity, consistency, and the optimal use of the agency's expertise and experience. See Access Telecommunications v. Southwestern Bell Telephone Co., 137 F.3d 605, 608 (8th Cir.), cert. denied, 525 U.S. 962, 119 S.Ct. 404, 142 L.Ed.2d 328 (1998). The doctrine, however, should be used sparingly, particularly where Congress has decided that the courts should consider an issue. United States v. McDonnell Douglas Corp., 751 F.2d 220, 224 (8th Cir.1984). This court appears to review primary jurisdiction de novo. See Access, 137 F.3d at 608; DeBruce Grain, Inc. v. Union Pacific R. Co., 149 F.3d 787, 790 n. 4 (8th Cir.1998).
Henderson argues that her case should have been deferred to SSA because SSDI eligibility is a complicated, regulatory issue requiring agency expertise. Contrary to Henderson's assertion, the jury was not asked to measure Henderson's eligibility against SSA's regulations, but to decide whether she misrepresented or omitted material facts to SSA. The function of a jury is to weigh the evidence and assess the credibility of witness, particularly in cases of fraud. See United States v. Baumgardner, 85 F.3d 1305, 1310-11 (8th Cir.1996).
She also argues that the refusal to defer to SSA denied her procedural due process because she was not "heard at a meaningful time and in a meaningful manner." See Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). She claims a further due process violation, asserting she likely would have received a favorable administrative ruling, resulting in (some) issue preclusion in her criminal prosecution.2
Although Henderson's administrative proceeding was not concluded before her criminal trial, she had ample opportunity to be heard at a meaningful time and place. See United States v. Lahey Clinic Hospital, Inc., 399 F.3d 1, 7-8, 12 (1st Cir.2005); Ram v. Heckler, 792 F.2d 444, 447 (4th Cir.1986). At trial, she testified, presented evidence, and faced accusers and witnesses. Henderson's procedural rights were fully protected.
Further, Henderson cites no statute or precedent that entitles a defendant to an administrative resolution before a criminal prosecution (even if the defendant might obtain a favorable agency decision). Finally, a district court certainly has jurisdiction of a prosecution for social security fraud. See generally Baumgardner, 85 F.3d at 1305. Despite SSA's comprehensive regulatory scheme, Congress explicitly made it a crime to conceal material facts from, or make false representations, to SSA. See 42 U.S.C. § 408(a)(3),(4).
The district court properly refused to invoke the primary jurisdiction doctrine.
Henderson asserts that there was insufficient evidence to support the verdict. She complains that the government failed to prove that her businesses were "substantial gainful activity," or that she was not disabled and ineligible for SSDI benefits. 42 U.S.C. § 1382c(a)(3)(E); 20 C.F.R. §§ 404.1572, 404.1520. None of these are required elements of wire fraud, concealment or misrepresentation. She also contends that the government failed to demonstrate that she harbored any fraudulent intent or that her representations were material — which are required elements of 18 U.S.C. § 1343 and 42 U.S.C. § 408(a)(3).
Intent frequently cannot be proven except by circumstantial evidence; the determination often depends on the credibility of witnesses, as assessed by the factfinder. United States v. Erdman, 953 F.2d 387, 390 (8th Cir.1992). Here, the jury may infer Henderson's intent from her conduct. See United States v. Gravatt, 280 F.3d 1189, 1192 (8th Cir.2002). The government produced ample circumstantial evidence of her intent by showing inconsistencies between her statements to SSA and her conduct. She claimed she had four to five migraines a week, yet after 21 consultations, told her cosmetic surgeon she had only one or two a month. She told SSA she could not travel, but toured the country vacationing and competing in pageants. She stated she could not concentrate, yet managed two businesses. Intent is also evident in Henderson's instruction to employees not to tell anyone she was employed. The jury could reasonably infer that Henderson intentionally misled SSA.
She also complains the government did not prove that her statements or omissions were material to SSA's decision. In federal statutes criminalizing false statements to public officials, materiality means any "natural tendency to influence, or was capable of influencing, the decision of the decision making body to which it was addressed." Kungys v. United States, 485 U.S. 759, 769-70, 108 S.Ct. 1537, 99 L.Ed.2d 839 (1988); Baumgardner, 85 F.3d at 1307 n. 1. Henderson's statements conveyed that she was unable to work or perform any physical tasks; she did not disclose her activities, pageant competitions and travels; an SSA expert testified that Henderson's misrepresentations and concealments influenced SSA's decisions. Thus, a jury could reasonably find that the statements and omissions were material to SSA's decision.
Reviewing the evidence in the light most favorable to the verdict, and giving the government the benefit of all reasonable inferences logically drawn from the evidence, no reasonable jury could have found Henderson innocent. See United States v. Goodson, 155 F.3d 963, 966 (8th Cir.1998).
Henderson contends that the superceding indictment was facially defective because it was not supported by facts, and did not allege a mens rea for any count, or materiality as an element of wire fraud. This challenge is reviewed de novo. United States v. Covey, 232 F.3d 641, 645 (8th Cir.2000). However, because she did not raise this issue prior...
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