U.S. v. Phillips, No. 98-30968
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
| Writing for the Court | Before JOLLY, EMILIO M. GARZA, and BENAVIDES; E. GRADY JOLLY; EMILIO M. GARZA; EMILIO M. GARZA |
| Citation | 219 F.3d 404 |
| Parties | (5th Cir. 2000) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. CHANEY L. PHILLIPS; EMERSON C. NEWMAN, Defendants-Appellants |
| Docket Number | No. 98-30968 |
| Decision Date | 13 July 2000 |
Page 404
v.
CHANEY L. PHILLIPS; EMERSON C. NEWMAN, Defendants-Appellants.
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Page 406
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Appeals from the United States District Court for the Middle District of Louisiana.
Before JOLLY, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This appeal presents evidence of several discrete schemes of local corruption involving ghost employees, payment of salary kickbacks, and misuse of state government funds. Based on this evidence and other related illegal conduct, a federal jury convicted the appellants, Chaney Phillips, the tax assessor for St. Helena Parish, Louisiana, and Emerson C. Newman, a political ally, on all counts of a twenty-count indictment, charging conspiracy, mail fraud, engaging in an illegal monetary transaction, theft involving a federally funded program, money laundering, and perjury.1 The district court sentenced Phillips to serve sixty months concurrently on each of counts 1, 2, and 16-20, and ninety-seven months concurrently on each of counts 3, 4, and 5-14. The district court also ordered Phillips to pay restitution in the sum of $225,587.56. The district court sentenced Newman to fifty-one months for counts 1 through 15, with restitution in the amount of $224,404.56.
We reverse their convictions with respect to theft involving a federally funded program, 18 U.S.C. § 666, because we find no adequate relationship between the tax assessor's office and the federal funds. As the money laundering convictions under counts five through fourteen are tied wholly to the § 666 charge, the convictions under counts five through fourteen also are reversed. We affirm the convictions, however, on all the indictment's remaining counts.
Phillips served as the elected Tax Assessor for St. Helena Parish, Louisiana, from 1981 to 1997. In 1997, Phillips was elected sheriff for St. Helena Parish and served in that capacity until his conviction. Newman, a friend and political supporter, owned and operated a hardware store in Greensburg, St. Helena Parish, with his first wife, Jean. After a long illness, Jean died of cancer in July of 1992.
The evidence focused on several different schemes involving Phillips and Newman. From a monetary perspective, the most significant of these was an insurance scheme that ran from 1990-92. Triggering the scheme was the Newmans' loss of health insurance sometime in late 1989 or early 1990. Starting in 1990, Phillips placed Newman and his wife Jean on the assessor's payroll so that they would be
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eligible for health insurance benefits. The Newmans purportedly were hired to assist in bringing the assessment district in compliance with state property assessment regulations and/or to act as "spotters" for the assessor's office. Their ownership and management of Greensburg's largest hardware store supposedly allowed them to look for signs of new construction or property improvement that would affect a property's assessed value. According to the defendants, the parish's lack of a building code or permit system necessitated that someone fill this role.2
Phillips employed Newman for three months. Thereafter, Newman resigned the position, only to be replaced by Jean on the assessor's payroll. She remained there through June 1992, one month prior to her death. The government contended that the Newmans either did no work for their $800 per month paychecks or they did insufficient work for this salary. The evidence at trial, especially when viewed most favorably from the point of view of the government as the prevailing party, allowed the jury reasonably to conclude that the Newmans did little or no work for these benefits, and that the Newmans kickbacked their salaries to Phillips.
While on the payroll in this period, the Newmans received a gross salary totaling $23,200. They also received $177,538.19 in health insurance benefits through the Louisiana Assessors' Insurance Fund ("LAIF"). Additionally, as part of the benefits conferred by the insurance plan, Newman received a one-time $15,000 payment as beneficiary of Jean's LAIF life insurance policy.
There were other schemes. The "hardware scheme" relates to a later period of employment, starting approximately two and one-half years later in February 1995, when Newman again appeared on the payroll of the assessor's office. He remained there for ten months. During this period, Newman received paychecks amounting to $8,000, or $4,758 after taxes. Newman credited this entire amount to Phillips's account at Newman's hardware store. Phillips and Newman contended that the credits to Phillips's account stemmed from the sale of a horse that Phillips allegedly sold to Newman.
The "clothing scheme" involved Phillips only. On three occasions Phillips charged personal items of clothing from a men's store to the assessor's office. The store billed these charges to the assessor's office as employee uniforms. Upon learning of the investigation into the activities of the assessor's office, Phillips paid cash to the store owner and received in return a refund check with which to reimburse the assessor's office. The store's proprietor, David Albin, testified at trial to these transactions.
Still another scheme was introduced at trial, although not alleged in the indictment: a vote-buying scheme. The government introduced this evidence to show intent and motive under Fed. R. Evid. 404(b). As we noted, in 1997, Phillips ran for sheriff in a special election and won. During this election, Newman paid two individuals to vote for Phillips. An individual brought potential voters to Newman's hardware store, where they checked in with Newman. They next went to the courthouse and voted; then they returned to the store where Newman paid each of them twenty dollars for voting for Phillips. The individuals receiving money for their votes, as well as the go-between and Newman, were arrested and charged in conjunction with these crimes by state officials. Phillips was never charged in this matter. Indeed, an effort to implicate Phillips in this scheme failed when he rebuffed an approach by the government's informer.
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We first set out the various standards of review that will be applied in our review of these convictions. First, we review the conviction "viewing the evidence in the light most favorable to the government, [to determine whether] a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt." United States v. Greer, 137 F.3d 247, 249 (5th Cir. 1998). We review questions of law and application of statutes de novo. See Voest-Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 891 (5th Cir. 1998); United States v. Westmoreland, 841 F.2d 572, 576 (5th Cir. 1988). We review the district court's admission of evidence for an abuse of discretion. See United States v. Pace, 10 F.3d 1106, 1113 (5th Cir. 1993). If we find an abuse of discretion, the harmless error doctrine is applied. See United States v. Skipper, 74 F.3d 608, 612 (5th Cir. 1996). We thus affirm evidentiary rulings unless the district court abused its discretion and a substantial right of the complaining party was affected. See United States v. Asibor, 109 F.3d 1023, 1032 (5th Cir. 1997).
We first consider the 18 U.S.C. § 666 convictions, convictions that stem only from Newman's 1995 employment.3 Section 666, is entitled "Theft or bribery concerning programs receiving Federal funds."4 The elements of the crime as
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presented by the prosecution under the facts in this case and as set forth by the district court in its jury charge are: (1) the defendant is an agent of the relevant state or local government or agency; (2) which received in excess of $10,000 under a federal program involving a federal grant, etc.; (3) the defendant committed the statutorily proscribed acts with respect to property that was owned by, or under the care, custody, or control of the state or local government or agency; and (4) the property at issue had a value in excess of $5,000. The defendants focus their argument only the first element, i.e., that Phillips had an agency relationship with a recipient of federal monies. Indeed, given the evidence that was admitted into the trial record (some of which is challenged on admissibility grounds), the jury reasonably found on the evidence before it that Phillips wrongly converted funds of the assessor's office in placing Newman on the payroll in 1995, and that Phillips corruptly accepted something of value from someone who expected to be rewarded in a transaction with the assessor's office, when Philips accepted kickbacks from Newman.5 We should make clear that the count charging a § 666 violation did not allege the conduct occurring with respect to the 1990-92 insurance scam.
The federal funds in question were food stamps provided to parish residents. The program was administered, and the food stamps issued, by an agency that was part of the parish government.6 Thus, the question is whether, for purposes of § 666, Phillips as tax assessor was an agent of the parish.
Consistent with the broad terms of the statute, the district court instructed the jury that Phillips and Newman could be convicted under the Act if it found Phillips to be authorized to act on behalf a government or agency receiving federal funds. The district court instructed the jury that "[u]nder Louisiana law, tax assessors are parish officers." The government argued to the jury and it now argues
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before us on appeal that, for purposes of § 666, St. Helena Parish is a local governmental body and the tax assessor is a parish agent. Thus, the agency question in this appeal turns entirely on whether Phillips was an agent of St. Helena Parish for...
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