United States v. Milovanovic, No. 08-30381
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
| Writing for the Court | TALLMAN |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellant, v. BRANO MILOVANOVIC; TONY GENE LAMB; ISMAIL HOT; MUHAMED KOVACIC; ELVEDIN BILANOVIC; ALEKSANDAR DJORDJEVIC, Defendants-Appellees. |
| Docket Number | No. 08-30381,D.C. No. 2:08-cr-00010-EFS-1 |
| Decision Date | 24 April 2012 |
UNITED STATES OF AMERICA, Plaintiff-Appellant,
v.
BRANO MILOVANOVIC; TONY GENE LAMB; ISMAIL HOT; MUHAMED KOVACIC; ELVEDIN BILANOVIC; ALEKSANDAR DJORDJEVIC, Defendants-Appellees.
No. 08-30381
D.C. No. 2:08-cr-00010-EFS-1
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Filed April 24, 2012
Amended May 22, 2012
Page 5608
James A. McDevitt, United States Attorney, Joseph H. Harrington, Assistant United States Attorney, Timothy M.
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Durkin, Assistant United States Attorney, United States Attorney's Office, Spokane, Washington, for the plaintiff-appellant.
Robert Fischer, Spokane, Washington, for defendant-appellee Brano Milovanovic.
Joseph Nappi, Jr., Spokane, Washington, for defendant-appellee Tony Gene Lamb.
Frank L. Cikutovich, Spokane, Washington, for defendant-appellee Ismail Hot.
Curran C. Dempsey, Spokane, Washington, for defendant-appellee Elvedin Bilanovic.
Dan B. Johnson, Spokane, Washington, for defendant-appellee Muhamed Kovacic.
Gerald R. Smith, Spokane, Washington, for defendant-appellee Aleksandar Djordjevic.
The Government's Motion to Amend the Published Opinion is GRANTED. The opinion filed on April 24, 2012, is AMENDED as follows: (1) the phrase "on which the victim relied to its detriment" is omitted from slip op. 4371; and (2) the phrase "on which the agency relied in issuing CDLs" is omitted from slip op. 4374.
An amended opinion will be filed concurrently with this order
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TALLMAN, Circuit Judge:
The State of Washington outsources the testing of applicants for commercial truck drivers' licenses to entities and individuals who administer the test and certify the results. The government alleges that a scheme to solicit bribes corrupted the process and caused the State to issue licenses to unqualified non-residents. A federal grand jury returned an indictment for mail and wire fraud on a theory that the State was deprived of the delivery of honest services by those involved. The district court held that the existence of a formal fiduciary duty to the State and resulting economic harm were required, and the court dismissed all charges. The United States brought an appeal to reinstate the case. 18 U.S.C. § 3731.
We address: (1) whether breach of a fiduciary duty is an element of honest services mail fraud under 18 U.S.C. §§ 1341 and 1346; (2) whether the superseding indictment, charging the defendants with a bribery-based scheme to defraud that breached a material relationship of trust, states an offense for honest services fraud in violation of 18 U.S.C. §§ 2, 1341, 1346, and 1349; and (3) whether, as the district court ruled, economic harm is required to establish a cognizable offense. We have jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.
Defendants Brano Milovanovic ("Milovanovic"), Tony Lamb ("Lamb"), Ismail Hot ("Hot"), Muhamed Kovacic ("Kovacic"), Elvedin Bilanovic ("Bilanovic"), and Aleksandar Djordjevic ("Djordjevic") were charged with conspiracy and with devising a scheme and artifice to defraud and deceive the Washington State Department of Licensing ("DOL"). The government alleged that defendants solicited and were paid bribes to help unqualified, non-resident appli-
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cants obtain commercial drivers' licenses ("CDLs") through materially false and fraudulent misrepresentations and omissions on CDL applications achieved by cheating on the exams, by false certifications that skills tests were completed successfully when no such tests were successfully performed, and by use of in-state addresses in Spokane, Washington, when the applicants actually resided out of state.
Because the district court dismissed the superseding indictment on these allegations, we assume for purposes of our decision that the United States can prove what it has alleged. See, e.g., United States v. Kenny, 645 F.2d 1323, 1347 (9th Cir. 1981) ("'[A]n indictment returned by a legally constituted and unbiased grand jury, like an information drawn by the prosecutor, if valid on its face, is enough to call for trial of the charge on its merits.' " (quoting Costello v. United States, 350 U.S. 359, 363 (1956))). We address the legal challenges surrounding the sufficiency of the indictment to state proper crimes to determine whether, if proved beyond a reasonable doubt, a properly instructed jury could convict. See, e.g., United States v. Boren, 278 F.3d 911, 914 (9th Cir. 2002) ("'Of course, none of these charges have been established by evidence, but at this stage of the proceedings the indictment must be tested by its sufficiency to charge an offense.' " (quoting United States v. Sampson, 371 U.S. 75, 78-79 (1962))). For that reason, we recite the facts as the Grand Jury has alleged them and draw all reasonable inferences in favor of the government.
Like most states, the State of Washington requires commercial truck drivers to obtain a special license to operate large vehicles, such as eighteen-wheel trucks and trailers, on public roadways. An applicant who desires to obtain a CDL in Washington must: (1) be a resident of the State; and (2) have a Washington personal driver's license. If an applicant meets both initial requirements, the applicant is eligible to take the
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CDL exam, which consists of both a written and a driving test. Wash. Rev. Code § 46.25.060(1)(a). The written test, commonly referred to as the "Knowledge Test," assesses an applicant's knowledge of the rules and regulations relating to the operation of commercial vehicles. An applicant who is not proficient in the English language is entitled to have an interpreter present to translate the exam questions and the applicant's answers.
Once an applicant successfully passes the Knowledge Test, he or she is eligible to take the driving portion. The driving exam is conducted on behalf of the State by a third-party examiner,1 is approximately an hour and a half to two hours in length, and is composed of three sections: (1) a pre-trip inspection; (2) a road test; and (3) a basic controls test.
If an eligible applicant successfully completes both portions of the CDL exam, the third-party examiner and the applicant sign a document, the "Skills Test Results," to verify that the applicant passed the exam. The applicant then presents the form to the local DOL office, pays the requisite fees, and is issued a temporary CDL. The local DOL office subsequently sends the applicant's paperwork via the U.S. Mails to the DOL in Olympia, Washington, which saves a copy of the
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form electronically and uploads the documents to a database. The information is then supplied to the Central Issuance System, which is managed for the State by a private corporation that prints the permanent CDL and sends it via the U.S. Mails to the applicant's address.
Milovanovic, a bilingual English and Bosnian speaker, was an independent contractor for Spokane International Translation, which itself contracted to provide translation services to government agencies, including the DOL in the Spokane area.2 As part of the scheme and artifice to defraud, Milovanovic contacted Bosnian-speaking individuals residing outside the State of Washington and offered to provide them a CDL for approximately $2,500. If an applicant paid the requested amount, he or she traveled to Spokane, Washington, where Milovanovic would serve as "translator" during the written exam. Milovanovic, however, did more than translate; he routinely assisted applicants to cheat on the exam by either orally telling them the correct answers in their native tongue or using hand signals during the exam to identify the correct answers. Milovanovic also provided local addresses to applicants to help them satisfy the Washington residency requirement. Once an applicant "passed" the written exam, Milovanovic contacted Lamb, a CDL third-party tester for the DOL. Unlike Milovanovic, Lamb contracted directly with the
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State agency. Like Milovanovic, however, Lamb was also an independent contractor, not an employee of the DOL.3 In exchange for falsifying the results of the skills test for each applicant, Milovanovic paid Lamb approximately $200 to $500 per test. To make his records appear legitimate to state auditors, Lamb sometimes noted in his CDL Tester Logs— which he either mailed or faxed to the DOL in Olympia in order to comply with DOL rules—that applicants failed the first time they took the skills test.
Co-defendants Hot, Kovacic,...
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