U.S. v. Schmitz

• Decision Date: 04 March 2011
• Docket Number: No. 09–14452.,09–14452.
• Citation: 634 F.3d 1247
• Parties: UNITED STATES of America, Plaintiff–Appellee,v.Suzanne L. SCHMITZ, a.k.a. Suzanne Martha Lowe Schmitz, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

634 F.3d 1247

22 Fla. L. Weekly Fed. C 1846

UNITED STATES of America, Plaintiff–Appellee,

v.Suzanne L. SCHMITZ, a.k.a. Suzanne Martha Lowe Schmitz, Defendant–Appellant.

No. 09–14452.

United States Court of Appeals, Eleventh Circuit.

March 4, 2011.

William N. Clark, Glory R. McLaughlin, Keith Edward Brashier, Redden, Mills & Clark, LLP, Birmingham, AL, for Schmitz.Jeffrey M. Anderson, Ramona C. Albin, Birmingham, AL, for U.S.Appeal from the United States District Court for the Northern District of Alabama.Before MARTIN, COX and BLACK, Circuit Judges.COX, Circuit Judge:

Suzanne L. Schmitz, a former Alabama state legislator, was convicted on three counts of mail fraud, in violation of 18 U.S.C. § 1341, and four counts of theft concerning a program receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(A). The theory of prosecution underlying all the charges was that Schmitz abused her position as state legislator to obtain employment with the Community Intensive Treatment for Youth Program (the “CITY Program” or “Program”), a federally-funded program for at-risk youth, and then collected over $177,000 in salary and other benefits from the Program, even though she performed little or no work, generated virtually no services or work product, and rarely showed up at Program offices. To conceal her scheme, Schmitz obtained a flexible work schedule and submitted false and fraudulent statements regarding the number of hours she worked and the volume and nature of her services.

Schmitz now appeals, challenging her convictions on various grounds. Because we conclude that the federal-funds counts of the indictment did not sufficiently allege a scheme to defraud, we vacate Schmitz's convictions on those counts. We affirm Schmitz's convictions for mail fraud. And, we vacate her sentences and remand for resentencing.

I. BACKGROUND

A. FACTS

1. Schmitz's path to the CITY Program

Alabama voters elected Schmitz to the state legislature in 1998, and re-elected her in 2002.¹ Schmitz's legislative duties required her to be in Montgomery three days a week, usually from January through May. While serving in the legislature, Schmitz also taught in a public high school. When her legislative duties prevented her from teaching, she would leave a detailed lesson plan for a substitute. Schmitz was not paid her teacher's salary when she was working as a legislator in Montgomery.

After her re-election, Schmitz became dissatisfied with splitting her legislative and teaching duties, so she quit her job as a teacher and started looking for new employment. To this end, Schmitz asked Paul Hubbert, the Executive Secretary of the Alabama Education Association and an influential lobbyist in Montgomery, to help her find a job in the education field. Hubbert in turn contacted Roy Johnson, then-Chancellor of the Alabama Department of Postsecondary Education, to find a job for Schmitz in the two-year college system. Hubbert also told Seth Hammett, then-Speaker of the Alabama House of Representatives, that Schmitz would be coming to see him about employment. In addition to Hubbert's indirect assistance, Schmitz asked Speaker Hammett directly if he would make arrangements to have money placed in the budget so that she could be employed in the postsecondary system. Speaker Hammett told Johnson that he would help fund a job for Schmitz if Johnson could find one in his department.

Johnson considered various employment options for Schmitz, but he settled on the CITY Program—a federally-funded program that sought to develop the social, behavioral, and academic skills of juvenile offenders in the State of Alabama. Johnson selected this program for Schmitz because it was exempt from strict requirements for hiring processes applicable to the two-year college system. Johnson directed Dr. James Cornell, the administrator of the CITY Program and the president of Central Alabama Community College, to make a position available for Schmitz. Dr. Cornell said he would find a position for Schmitz, but he wanted assurance of additional funding for that position, and he wanted to meet Schmitz in person. Speaker Hammett directed the chairman of the House Education Appropriations Committee to alter the state budget to pay for Schmitz's new position, and Johnson arranged a meeting at the Alabama House of Representatives between Dr. Cornell, CITY Program director and founder Ed Earnest, and Schmitz.

After this meeting, Dr. Cornell offered Schmitz the position of Program Coordinator for Community and External Affairs. That position had never existed before, and was specially created for Schmitz. Dr. Cornell did not consider any other candidates for the position, nor did he conduct any serious review of Schmitz's qualifications before offering her the job. Johnson instructed Dr. Cornell to pay Schmitz a salary equal to the amount she had earned as a public school teacher. The letter offering Schmitz the position specified a salary of $42,623.

Dr. Cornell met with Schmitz in January 2003 and gave her a handwritten list of job duties for the first few months of her employment. Schmitz was essentially expected to “put a face” on the CITY Program and improve public relations. In particular, she was expected to develop a statewide public relations plan for the CITY Program; visit with public relations personnel from the Department of Postsecondary Education and the two-year colleges; visit each of the ten CITY Program sites in Alabama and become familiar with CITY Program personnel; develop relationships with various media outlets; solicit ideas from CITY Program employees; and analyze existing public relations materials. Schmitz understood that she was supposed to work forty hours per week for the CITY Program. She formally accepted the CITY Program position on January 24, 2003.

2. Schmitz receives notice that she cannot “double-count” her time and requests a flexible work schedule

Several days after accepting the CITY Program position, Schmitz received a letter from the Chief Examiner of Public Accounts for the State of Alabama reminding her that a recent Alabama Ethics Commission opinion prohibited state legislators from collecting compensation from public employers for time spent on legislative duties. To help ensure that Schmitz would not double-count time spent on legislative duties as time spent on her CITY Program responsibilities, the letter included a work log and time record to help capture specific details about the hours she worked.

A month or so after accepting the CITY Program position, on March 3, 2003, Schmitz mailed a letter to Dr. Cornell requesting a “flexible work schedule.” This request was based on a policy established by Chancellor Johnson to allow a person to serve in the legislature and work in public education, but only if certain requirements were met. One of those requirements was that the employee keep a weekly log of their work hours. According to Schmitz, she requested this accommodation because of the difficulty in balancing the requirements of the CITY Program job and her duties as a state legislator. Dr. Cornell approved Schmitz's request for a flexible work schedule in April 2003, reminding her that she was “expected to maintain a detailed log of activities relative to [her] legislative duties and to make them available for review upon request.” (Dkt. 186 at 166–67.)

3. Schmitz fails to show up for work, and completes almost no assigned tasks

Much of the evidence at trial focused on the key issue of what work Schmitz did, or did not do, for the CITY Program after she obtained a flexible work schedule. The Government produced evidence that Schmitz rarely showed up at any CITY Program office and produced virtually no work product during her time on the payroll. For example, during the first month of her employment, in February 2003, a computer technician set up Schmitz's computer in her Huntsville office and left a note with her username and password in a sealed envelope in her desk drawer. When the technician returned to the office a month or so later, the sealed envelope was still in the drawer and the computer had not been used since its initial setup. Various employees at the CITY Program office in Huntsville testified that they rarely saw Schmitz during her three-year period of employment. The Huntsville program coordinator, in particular, testified that Schmitz would spend only thirty minutes to an hour at the office when she visited. And, he said, in more than three years he never saw her stay a full day.

Schmitz did not show up at the other CITY Program locations either. Although one of Schmitz's job duties was to visit all ten CITY Program locations, she failed to visit at least five of them. Regional Coordinator Lester Crowder testified that she saw Schmitz about five times at CITY Program locations during her three years of employment. Schmitz was so rarely seen at CITY Program offices that several witnesses did not even know she was a CITY Program employee when they saw her at an all-employee conference in Orange Beach, Alabama in 2006.

Not only did Schmitz rarely show up for work, she also failed to complete the job duties assigned to her. Within the first year of her employment, then-director of the City Program Ed Earnest complained to Dr. Cornell that Schmitz was not doing her job. Earnest also expressed concern to Schmitz's business manager, Barbara Creel, that she was not doing anything. Creel testified that she could not think of any work Schmitz had done for the Program during her employment.

In November 2005, concerns about Schmitz's employment situation prompted then-director Larry Palmer and interim president of Central Alabama Community College Susan Sallato to complain to Chancellor Johnson that Schmitz was not coming to work.² Johnson directed Palmer and Sallatto to ensure that Schmitz came to work, but problems persisted. As a result, Johnson held a meeting in November 2005 with all three...