Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-30231/USCOURTS-ca9-14-30231-0/pdf.json

Parties Involved:
Fawn Patricia Ann Tadios
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

FAWN PATRICIA ANN TADIOS,

Defendant-Appellant.

No. 14-30231

D.C. No.

4:13-cr-00051-BMM-1

OPINION

Appeal from the United States District Court

for the District of Montana

Brian M. Morris, District Judge, Presiding

Argued and Submitted December 8, 2015

Seattle, Washington

Filed May 18, 2016

Before: M. Margaret McKeown and Richard C. Tallman,

Circuit Judges and Sharon L. Gleason,* District Judge.

Opinion by Judge McKeown

* The Honorable Sharon L. Gleason, United States District Judge for the

District of Alaska, sitting by designation.

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2 UNITED STATES V. TADIOS

SUMMARY**

Criminal Law

The panel affirmed the district court’s inclusion in its loss

calculation at sentencing the estimated salary paid to the

defendant, the CEO of a federally-funded health care clinic

located on the Chippewa Cree’s Rocky Boy Reservation, for

time she spent visiting her husband when she claimed to be

traveling on business.

The defendant was convicted for converting federal funds

for personal use, using federal funds for personal benefit, and

misapplying clinic funds. 

The panel rejected the defendant’s argument that because

she was an exempt employee, the Chippewa Cree suffered no

loss in paying her full salary for when she was visiting her

husband instead of performing clinic duties. The panel held

that including in the loss calculation under U.S.S.G. § 2B1.1

the estimated value of the time the defendant should have

reported as annual leave was not clear error.

The panel addressed the defendant’s remaining arguments

concerning her conviction and sentencing in a memorandum

disposition.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. TADIOS 3

COUNSEL

Steven Thomas Potts (argued), CJA, Great Falls, Montana;

Jeffry M. Foster, CJA Panel Attorney, Davis, Hatley,

Haffeman & Tighe, P.C., Great Falls, Montana, for

Defendant-Appellant.

Carl E. Rostad (argued), Assistant United States Attorney,

District of Montana, Great Falls, Montana, for PlaintiffAppellee.

OPINION

McKEOWN, Circuit Judge:

Fawn Patricia Ann Tadios asks us to ignore the old adage

“time is money” and hold that the value of an exempt

employee’s time cannot be used to calculate loss due to fraud

or theft under the United States Sentencing Guidelines. We

decline to do so.1

For eight years, Tadios served as the Chief Executive

Officer (“CEO”) of the Rocky Boy’s Health Board Clinic

(“the Clinic”), a federally funded health care facility located

on the Chippewa Cree’s (the “Tribe”) RockyBoyReservation

in Montana. As CEO, Tadios was entrusted with the

management of the Clinic’s health care programs and its $14

million annual budget.

1 We address Tadios’s remaining arguments concerning her conviction

and sentencing in a memorandum disposition filed concurrently with this

opinion. See United States v. Tadios, ___ Fed App’x ___ (9th Cir. 2016).

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4 UNITED STATES V. TADIOS

During Tadios’s tenure with the Clinic, her husband,

Tribal Chairman Raymond Parker, was sentenced to the

federalpenitentiaryin Yankton, South Dakota for embezzling

tribal funds. Tadios took a series of trips to see him, partially

funding these personal visits with her tribal credit card and

Clinic travel advances. Rather than claim annual leave for

her absences, Tadios attempted to cover up the personal

nature of her trips. For example, Tadios listed the purpose of

a five-day March trip as a “site visit” to tour a nearby tribal

health clinic. As it turned out, Tadios spent only two hours

touring the healthcare facility—the rest of the excursion was

devoted to visiting her husband. Indeed, each time Tadios

visited her husband, she told her board that she was traveling

for “official business purposes.” Memorializing her

dissimulation, Tadios submitted timesheetslisting eight hours

of “travel” on most of the days she spent in Yankton with

Parker.

Tadios was convicted for converting federal funds

allocated to the Clinic for personal use in violation of

18 U.S.C. § 666(a)(1)(A), using federal funds for personal

benefit in violation of 18 U.S.C. § 1163, and misapplying

Clinic funds in violation of 18 U.S.C. § 669. Recognizing her

otherwise exemplary record, the district court sentenced

Tadios to a prison term of one year and a day, followed by

two years of supervised release, and ordered $15,000 in

restitution to the Tribe.

In calculating the loss Tadios inflicted on the Tribe under

§ 2B1.1 of the Sentencing Guidelines (dealing with economic

offenses involving, inter alia, theft, fraud or deceit), the

district court included the estimated salary the Clinic paid to

Tadios, an exempt, management-level employee, for the time

she spent visiting her husband when she claimed to be

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UNITED STATES V. TADIOS 5

traveling on business.2 The heart of this appeal—and an issue

of first impression in our circuit—is whether the district court

committed clear error by including the salary loss. See

United States v. Torlai, 728 F.3d 932, 937 (9th Cir. 2013)

(“We review the district court’s factual determinations,

including the calculation of the victim’s loss, for clear error.”

(internal quotations, citations and alterations omitted)).

Because Tadios was a salaried employee, the district court

estimated the value of her time by calculating her hourly rate

and multiplying that figure by the number of hours that she

should have claimed as annual leave.3 Reliance on time and

salary records was sufficient, as the court “need only make a

reasonable estimate of loss, given the available information.” 

United States v. Burns, 104 F.3d 529, 536 (2d Cir. 1997); see

also U.S.S.G. § 2B1.1 cmt. n.3(C) (In determining intended

loss, a district court “need only make a reasonable estimate of

the loss . . . based upon th[e] evidence.”).

Tadios argues that, because she was an exempt employee,

she was entitled to her full base pay for every pay period in

which she performed any work, regardless of her travel or

vacation schedule. Thus, she asserts that the Tribe suffered

no loss in paying her full salary on days and for hours when

2 This inclusion resulted in a sentencing enhancement and an increased

restitution award. The district court calculated the total loss amount as

just under $16,000, including both travel expenditures for personal use and

lost salary, resulting in a four-point increase in the sentencing level. See

U.S.S.G. § 2B1.1(b)(1)(C). Without inclusion of the estimated salary,

Tadios would not have qualified for this enhancement.

3 The court estimated Tadios’s hourly rate by dividing her annual salary

by the number of hours in an average work year, assuming a standard 40-

hour work week.

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6 UNITED STATES V. TADIOS

she was visiting her husband instead of performing Clinic

duties. She also claims that the lack of evidence monetizing

her vacation leave dooms the loss calculation. We disagree.

Under Tadios’s best of both worlds theory, she could

sleep on the job full time or visit her husband 40 hours per

week without imposing a financial loss on the Tribe because,

as an exempt employee, she would be paid anyway. This

argument strains credulity, underscores the duplicitous nature

of her conduct, and would make a farce of public

accountability.

“Public accountability is the notion that ‘governmental

employees should not be paid for time not worked due to the

need to be accountable to the taxpayers for expenditure of

public funds.’” Serv. Emps. Intern. Un., Local 102 v. County.

of San Diego, 60 F.3d 1346, 1352 n.2 (9th Cir. 1994) (quoting

Hilbert v. District of Columbia, 23 F.3d 429, 435 (D.C. Cir.

1994) (Henderson, J., concurring in part, dissenting in part)). 

According to this principle, even exempt public employees

must honestly account for time away from work.4

The public accountability principle underscores that time

has value. It was thus not clear error for the district court to

include the estimated value of the time that Tadios should

have reported as annual leave in calculating the total losses

Tadios inflicted on the Tribe. By failing to claim or deduct

4 The Tribe’s own personnel policies reflect the accountability principle,

providing that “[s]ubmittal of a fraudulent time sheet will be grounds for

disciplinary action or termination,” and “exempt employees are not

compensated for overtime and therefore may require a more flexible

workday on occasion. . . . Exempt employees who abuse this policy will

be required to utilize the time clock.”

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UNITED STATES V. TADIOS 7

annual leave for the dates when she visited her husband and

told her board she was traveling for work, Tadios harmed the

Clinic twice over: first, by getting the Clinic to pay for travel

expenses it had no obligation to cover, and again by getting

the Clinic to pay her salary for time she was supposed to be

working but was not.

Tadios abused her status as an exempt employee by

submitting fraudulent time sheets and falsely claiming to be

working or traveling rather than taking annual leave when she

visited her husband. In so doing, she deprived the Tribe of

her honest services, and thereby “obviously inflicted some

level of pecuniary harm on the organization.” United States

v. Crawley, 533 F.3d 349, 357 (5th Cir. 2008). The district

court’s calculation of this harm by estimating the loss Tadios

inflicted on the Tribe was not clearly erroneous.

AFFIRMED.

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