United States v. Eagle
| Decision Date | 05 July 2013 |
| Docket Number | No. 11-30352,D.C. No. 4:11-cr-00032-SEH-1,11-30352 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. FLORENCE A. WHITE EAGLE, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
FOR PUBLICATION
OPINIONAppeal from the United States District Court
for the District of Montana
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge McKeown
SUMMARY**
Criminal Law
The panel affirmed in part and reversed in part a criminal judgment in a case arising out of the involvement by the Bureau of Indian Affairs Superintendent at the Fort Peck Indian Reservation in a scheme to obtain money from a tribal credit program.
Reversing convictions on counts charging conspiracy to convert tribal credit program proceeds (18 U.S.C. § 371) and theft and conversion from an indian Tribal Organization (18 U.S.C. §§ 1163, 2), the panel held that the government's misapplication theory, predicated at best on an employer directive and a civil regulation, cannot support a conviction; and that the government's embezzlement and conversion theories also fail because the defendant never controlled or had custody of the funds that she later borrowed.
Affirming a bribery conviction (18 U.S.C. § 201(b)(2)), the panel held that a jury could easily infer a quid pro quo and had ample evidence to conclude that the defendant's actions were "corrupt."
Because the government did not show that the defendant violated a specific duty to report credit program fraud, the panel reversed her conviction of concealment of public corruption (18 U.S.C. § 1001(a)(1)).
The panel reversed a conviction for public acts affecting a personal financial interest (18 U.S.C. § 208(a)(1)) because the connection between the payment of a BIA Administrative Officer's fraudulent nominee loans and the defendant's alleged financial interest is remote and speculative.
The panel held that there was sufficient evidence to support the defendant's conviction of misprision of a felony (18 U.S.C. § 4).
The panel rejected the defendant's contention that her convictions for public acts affecting a financial interest and misprision of a felony would violate her Fifth Amendment right to avoid self-incrimination because each charge relied on her duty to report criminal activity that would have exposed her to prosecution. The panel reasoned that the connection between the defendant's loan modification and the BIA Administrative Officer's use of nominee borrowers is too remote to implicate the defendant's Fifth Amendment rights.
The panel held that the district court erred at sentencing in its application of U.S.S.G. § 2C1.1(b)(2), when it appeared to value the loan modification using standard "loss" calculations instead of focusing on the "value of the benefit" the defendant received. The panel explained that any sentencing adjustment must be based on the value of the loan modification as a bribe, and remanded for further proceedings.
Steven T. Potts (argued), Great Falls, Montana, for Defendant-Appellant.
Carl E. Rostad (argued), United States Attorney's Office for the District of Montana, Great Falls, Montana, J. Bishop Grewell, United States Attorney's Office for the District of Montana, Billings, Montana, for Plaintiff-Appellee.
Florence White Eagle appeals her conviction and sentence on six counts arising out of her involvement in a scheme to obtain money from a tribal credit program: (I) conspiracy to convert tribal credit program proceeds in violation of 18 U.S.C. § 371; (II) theft and conversion from an Indian Tribal Organization in violation of 18 U.S.C. §§ 1163, 2; (III) bribery in violation of 18 U.S.C. § 201(b)(2); (IV) concealment of public corruption in violation of 18 U.S.C. § 1001(a)(1); (V) public acts affecting a personal financial interest in violation of 18 U.S.C. § 208(a); and (VI) misprision of a felony in violation of 18 U.S.C. § 4. Without a doubt, White Eagle turned a blind eye to fraud and facilitated its cover up. The difficulty for the prosecution is that, in the main, the crimes charged did not fit the facts. We affirm White Eagle's convictions on Counts III and VI (bribery and misprision of a felony), but reverse the convictions on Counts I, II, IV, and V, and remand for resentencing.
White Eagle was the Bureau of Indian Affairs ("BIA") Superintendent at the Fort Peck Indian Reservation. The BIA is the federal government's trustee for lands on Fort Peck in northeastern Montana, which is home to the Assiniboine and Sioux Tribes. Until early 2008, the BIA oversaw the Fort Peck Credit Program ("Credit Program"), which provided a supplemental source of credit to tribal members and was intended to "rais[e] the economic status of members of the Tribes to a point where they can look to the same sources of financing as are looked to by other citizens." One of White Eagle's duties was to sign loan documents for Credit Program loans that pledged trust assets as collateral.
The Credit Program was staffed with four tribal employees and two BIA employees—a loan specialist and a loan assistant. The four tribal employees were supervised by the two BIA employees, who, in turn, were supervised by Toni Greybull, the BIA Administrative Officer. White Eagle was Greybull's immediate supervisor and the two women worked together at Fort Peck for many years.
Greybull was a central participant in a fraudulent scheme to advantage Credit Program employees. The setup was not particularly complicated—Credit Program employees obtained loans by filing applications in the names of "nominee," or stand-in, relatives and then splitting the proceeds amongst themselves. To avoid the three-person Credit Committee tasked with application review and approval, Greybull approved many of the loans herself. This scheme was extensive: an Office of the Inspector General ("OIG") audit revealed that of the approximately $1.6 million loaned by the Credit Program, around $1.2 million went toCredit Program employees and their stand-in family members.
Greybull died in March 2008, leaving behind a number of unpaid loans in others' names. In May 2008, Greybull's sister Linda Christiansen approached White Eagle with documentation for nominee loans that Greybull had taken out in Christiansen's name as well as in the name of Arthur Greybull, III (Toni Greybull's son). Christiansen requested that the loans be repaid out of Greybull's life insurance. Apparently worried that inquiries about the loans would lead to an audit that potentially would expose the fraud, White Eagle contacted Greybull's husband Arthur Greybull Jr. and falsely informed him that Toni Greybull (not the nominee borrowers) had outstanding loans with the Credit Program. Greybull's husband then paid the loans with money from Greybull's life insurance.
Greybull was not the only beneficiary of the loan program. White Eagle also obtained loans from the Credit Program, though not through the use of nominee borrowers. In 2002, she took out a short-term loan of $2,000, and in February 2007 she obtained a long-term loan for $5,050. White Eagle made payments as required under the terms of the loans. The long-term loan was modified twice to allow borrowing of additional funds: in January 2008 the loan was increased by $15,000, and in June 2009 it was increased by another $5,050. These modifications were approved by the Credit Program's Credit Committee, not Greybull. Although the government does not allege the loans were fraudulently procured, White Eagle's long-term loan modification was contrary to specific directives she had received. When the BIA regional director discovered in late 2007 that White Eagle had taken out loans, he told her to pay them off anddiscontinue participation in the Credit Program due to the conflict of interest. The government argues that White Eagle's Credit Program loans also violated the prohibition on holding financial interests that conflict with conscientious performance of duty. See 5 C.F.R. § 2635.101(b)(2).
At trial, the government argued that Greybull arranged the 2008 loan modification as quid pro quo for White Eagle's assistance in dealing with possible discovery of the nominee loan scheme triggered by Greybull's mother Patricia Menz. In September 2007, Menz visited the Credit Program offices to pay off a loan she had personally taken out and discovered, to her surprise, that other loans had been taken out in her name and without her knowledge or consent. The Credit Program employee who assisted Menz had obtained fraudulent loans himself and knew that Greybull had obtained fraudulent loans. He directed Menz to speak to Greybull for answers to her questions. Instead, and without telling Greybull or others involved in the scheme, Menz contacted the OIG and reported the loan irregularities.
Menz did not complain to the BIA or the Credit Program, and there was no official reason for White Eagle to address her concerns. Nonetheless, in December 2007, White Eagle sent Menz a letter on BIA letterhead falsely assuring her that she owed nothing because the loans had been erroneously listed in her name and had also been paid off. The day before White Eagle sent the letter, she had applied for the $15,000 increase in her long-term loan. Although the loan was approved by the Credit Committee, the government presented evidence that Greybull fast-tracked its approval, even prevailing upon Credit Program staff to release a hold on White Eagle's account. The government also argued that the loan issued on unusually favorable terms. Under its theory,the fast-tracked and favorable loan modification was a payoff for White Eagle's assistance in the coverup.
The fraudulent scheme was uncovered during a 2009 audit conducted by the Fort Peck Tribes. The audit determined that fraud had been taking place since at least the early 1990s, with...
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