United States v. Croft
| Decision Date | 24 May 2022 |
| Docket Number | 21-50380 |
| Parties | United States of America, Plaintiff-Appellee, v. Bradley Lane Croft, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeal from the United States District Court for the Western District of Texas USDC No. 5:18-CR-603-1
Before King, Costa, and Ho, Circuit Judges.
Bradley Lane Croft challenges the sufficiency of the evidence supporting his convictions for wire fraud, aggravated identity theft, and money laundering. He also challenges the restitution and forfeiture orders issued by the district court pursuant to those convictions. For the following reasons, we AFFIRM.
From 2011 to 2018, Bradley Lane Croft was the operator of Universal K-9, a school in San Antonio that trained dogs, as well as handlers, for various law-enforcement related tasks such as detection and tracking. Initially, many of Croft's students came from small police departments; he would both train a person as a handler and then provide him or her with a dog (often obtained from shelters) for $2, 500 well below the normal price of obtaining a working dog even before considering the price of training. Croft then thought of a new approach to expand his business: teaching veterans who could pay the course fee using funds provided through the G.I. Bill and paid by the Education Benefits Program of the Department of Veterans Affairs (VA). To be eligible to receive those funds, Universal K-9 had to be certified by the Texas Veterans Commission (TVC) as a non-accredited non-college-degree school.
Over the course of three years, Croft submitted multiple applications to the TVC; eventually, after the fourth application (received on March 4, 2016) was approved, Universal K-9 was certified by the TVC and accepted by the VA on June 24, 2016. One of the required attachments for an application for a non-accredited, non-college-degree school was a "Roster of Administrative and Instructional Staff." The form where that information was to be submitted contained a provision where the submitting applicant agreed: "I certify that the information on this form (and/or attachment) is true and correct to the best of my knowledge and belief."
Rufus Coburn, who was the Assistant Director of the TVC when Croft's applications were submitted, testified at trial that the name of the instructors and their certifications to teach the listed classes were required for approval of an application by the TVC. He also described the roster as a "particularly important" part of the application. Coburn additionally testified that each individual instructor had to be approved to teach veterans by the TVC, that "the veteran will not be able to get the G.I. Bill benefits if [an] unapproved instructor is one of their instructors," and that the roster of instructors had to be updated if any changes occurred.
On the final application, which was ultimately approved, Croft listed four instructors whose duties were to "[t]each [c]lass and [t]rain [d]ogs": Wes Keeling, Dustin Bragg, Jesse Stanley, and Art Underwood. In the column titled "Course/Subject Taught," each had the following courses listed: Police K-9 Handlers Course, Police K-9 Trainers Course, K-9 Interdiction Course, Behavioral Modification, and Kennel Master Course. Croft's application additionally included numerous certificates detailing the certifications of the four instructors.
However, at trial, evidence was introduced that the four individuals had neither given their permission to be listed as Universal K-9 instructors for the purposes of the TVC application nor actually served as instructors for the listed courses. Wes Keeling testified that he only taught a short interdiction course as a module to Universal K-9's larger program (and only to police officers and not to the general public), stopped teaching for Universal K-9 in 2017, and did not agree to teach the courses listed on the application nor grant permission for Croft to use his name and certifications on the application. Dustin Bragg testified that he had never talked with Croft about joining Universal K-9's staff nor had he authorized use of his name for the application, but instead taught just one-to-two interdiction modules with Keeling (who served as his point of contact and paid Bragg for that work); he did not agree to teach any other courses. Jesse Stanley testified that he had agreed to work with Universal K-9 should it be approved for different military contracts that were separate from and predated the TVC application, ended his working relationship with the company in 2014, and was already employed by the Department of Homeland Security by the time the final application was submitted and approved. The court did not hear testimony from Art Underwood, and for good reason-he was dead, and had been dead since March 16, 2014, approximately two years before Croft filed his final application. Multiple students (including veterans who took classes using G.I. Bill funds) testified that their classes were primarily taught by Croft and/or other individuals not listed on the TVC application.
The court also heard testimony from Richard Cook, who recruited veterans and processed paperwork for Universal K-9 to be paid by the VA. Cook was a 100% disabled veteran who suffered from cognitive disabilities due to injuries he suffered as a result of a random act of violence years earlier. Cook testified that, unbeknownst to him, Croft had listed Cook as the President of Universal K-9 on applications to the TVC. Cook also testified that, at Croft's direction, he opened multiple bank accounts in his own name for Universal K-9 to receive funds from the VA (ultimately totaling $1, 506, 758.31) and sent the checkbooks, debit cards, and online passwords to Croft.
Croft often directed Cook to withdraw funds from these accounts, and sometimes to funnel those funds through Cook's own bank accounts, which Croft then used to make several purchases. These purchases were either made with the hope to expand Universal K-9 and its activities with veterans or for Croft's own benefit. These purchases included an American Eagle 45T mobile home, a property at 15329 Tradesman in San Antonio, multiple pickup trucks held in the name of other people (including Croft's daughter), payment for elective surgery, and jet skis. For some of these purchases, Croft had Cook withdraw money from the Universal K-9 accounts holding VA money in intervals of $9, 000 or less, under the threshold where reporting is required by the financial institution.
In a superseding indictment, Croft was charged with eight counts of wire fraud in violation of 18 U.S.C. § 1343, four counts of aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1), two separate counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A), (a)(1)(B), and (a)(2), and two counts of making a false tax return in violation of 26 U.S.C. § 7206(1). After a bench trial, Croft was found guilty on all counts. He was ultimately sentenced to 118 months' imprisonment. The court also ordered that Croft pay a $1, 600 special assessment and $1, 506, 758.31 in restitution and ordered forfeiture of several pieces of personal and real property.[1] Croft timely appeals.
Croft challenges the sufficiency of the evidence supporting his convictions for wire fraud, aggravated identity theft, and money laundering.[2]He additionally challenges the district court's restitution and forfeiture orders.
We "review[] a district court's finding of guilt after a bench trial to determine whether it is supported by 'any substantial evidence.'" United States v. Serna-Villarreal, 352 F.3d 225, 234 (5th Cir. 2003) (quoting United States v. Shelton, 325 F.3d 553, 557 (5th Cir. 2003)). That is, we look to see whether "any rational trier of fact could have found that the evidence established guilt beyond a reasonable doubt." Id. In doing so, we cast the evidence "in the light most favorable to the verdict," id., and "defer to all reasonable inferences drawn by the trial court," United States v. Turner, 319 F.3d 716, 721 (5th Cir. 2003) (quoting United States v. Mathes, 151 F.3d 251, 252 (5th Cir. 1998)). We will take each challenged conviction in turn.
Proving wire fraud requires proving the following elements: "(1) a scheme to defraud; (2) the use of, or causing the use of wire communications in furtherance of the scheme; and (3) a specific intent to defraud." United States v. Harris, 821 F.3d 589, 598 (5th Cir. 2016). "'Scheme to defraud' is tricky to define, 'but it includes any false or fraudulent pretenses or representations intended to deceive others in order to obtain something of value, such as money, from the [entity] to be deceived.'" United States v. Swenson, 25 F.4th 309, 316-17 (5th Cir. 2022) (alteration in original) (quoting United States v. Evans, 892 F.3d 692, 711-12 (5th Cir. 2018)). The false statement or pretense must also be material, meaning that "it has 'a natural tendency to influence, or [is] capable of influencing, the decision of the decision making body to which it was addressed.'" Harris, 821 F.3d at 599 (alteration in original) (quoting United States v. Gaudin, 515 U.S. 506, 509 (1995)). Lastly, the intent element requires that the defendant "acts knowingly with the specific intent to deceive for the purpose of causing pecuniary loss to another or bringing about some financial gain to himself." Swenson, 25 F.4th at 318-19 (quoting Evans, 892 F.3d at 712).
The use of the wires is not in dispute-Croft's successful application for Universal K-9 to be certified by the TVC led more than a million dollars of G.I. Bill funds to be transported through the wires and into his coffers. The only question, then, is whether...
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