Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-10304/USCOURTS-ca9-12-10304-0/pdf.json

Parties Involved:
Carlos Javier Ezeta
Appellee
United States of America
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v.

CARLOS JAVIER EZETA,

Defendant-Appellee.

No. 12-10304

D.C. No.

2:11-cr-00289-

RCJ-VCF-1

OPINION

Appeal from the United States District Court

for the District of Nevada

Robert Clive Jones, District Judge, Presiding

Argued and Submitted

February 10, 2014—San Francisco, California

Filed May 23, 2014

Before: Richard C. Tallman and Johnnie B. Rawlinson,

Circuit Judges, and Thomas O. Rice, District Judge.*

Opinion by Judge Tallman

 

* The Honorable Thomas O. Rice, United States District Judge for the

Eastern District of Washington, sitting by designation.

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2 UNITED STATES V. EZETA

SUMMARY**

Criminal Law

Reversing the district court’s dismissal of an indictment

charging financial aid fraud in violation of 20 U.S.C.

§ 1097(a), the panel held that § 1097(a) does not require the

government to prove that the defendant personally received

or exercised dominion or control over the federally insured

funds.

The panel held that the statute encompasses the act of

taking money from the government via false statements and

causing it to be disbursed to others.

COUNSEL

Camille W. Damm (argued), Assistant United States

Attorney; Daniel G. Bogden United States Attorney; and

Robert L. Ellman, Appellate Chief, United States Attorney’s

Office, Las Vegas, Nevada, for Plaintiff-Appellant.

Brenda R. Weksler (argued), Assistant Federal Public

Defender; and Rene L. Valladares, Federal Public Defender,

Las Vegas, Nevada, for Defendant-Appellee.

** 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. EZETA 3

OPINION

TALLMAN, Circuit Judge:

Defendant Carlos Javier Ezeta was indicted on four

counts of financial aid fraud in violation of 20 U.S.C.

§ 1097(a). Subsequently, the district court dismissed the

indictment after concluding (1) that Ezeta’s alleged actions

did not satisfy the statute and (2) that Ezeta could not have

“willfully cause[d]” or aided and abetted another to commit

the crimes. The government appeals the dismissal and we

must now decide as a matter of first impression whether

§ 1097(a) requires a defendant to personally receive or

exercise control over federally insured funds obtained by

fraud. We have jurisdiction under 28 U.S.C. § 1291, and we

now hold that it does not.

I

The allegations are undisputed. Between 2008 and 2011,

Ezeta worked as a counselor and professor at the College of

Southern Nevada (“CSN”), a community college in Las

Vegas. He was the only tenured professor at CSN fluent in

both English and Spanish. Both in conjunction with his

employment and out of a desire to help the Hispanic

community, Ezeta often assisted current and prospective

Spanish-speaking students with CSN applications and with

selecting courses. But his efforts to “assist” did not end with

good advice. Instead, beyond performing his official duties,

Ezeta “helped” these students obtain federal financial aid by

falsifying and electronically submitting several Free

Applications for Federal Student Aid (“FAFSA forms”). In

reliance on the representations made in these forms, student

aid money was disbursed. These applications eventually

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4 UNITED STATES V. EZETA

drew the attention of the Department of Education, Office of

Inspector General, which commenced an investigation.

The investigation revealed that eight CSN students had

visited Ezeta for help with registration and class counseling. 

When Ezeta learned that the students intended to seek

financial aid and had not successfully completed high school,

a GED, or an ability-to-benefit test (at least one of which is

required to receive funds under Department of Education

regulations), he used their personal identification numbers to

complete the FAFSA forms for them. In doing so, he falsely

represented that the students satisfied the education

requirements. Ezeta even told one student to obtain a

fraudulent GED certificate.

Many of the students were unaware that their applications

contained false statements and none of the students asked or

paid Ezeta for his help in filling out the FAFSA forms. Of

the eight students involved, six received disbursement of

funds from the federal government; the seventh student’s

application was intercepted prior to disbursement; and the

eighth student’s application was never submitted because she

had not yet obtained a phony certificate of high school

completion. The six students who received funds were given

$8,709 in federal loans, but the total amount of intended loss

sought through the doctored FAFSA forms was $37,341.

Department of Education investigators then performed a

sting operation, sending a Spanish-speaking undercover agent

posing as a student to Ezeta’s office for help with the

enrollment process. The agent told Ezeta that she had not

finished high school but nonetheless intended to seek

financial aid. Ezeta then completed the FAFSA forms for her

and falsely reported that she had completed high school.

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UNITED STATES V. EZETA 5

Ezeta was thereafter questioned by federal agents. During

that conversation, Ezeta admitted to submitting applications

for students “a couple of times” and, when confronted with a

tape recording of the meeting with the undercover agent and

proof that his IP address was linked to the falsified FAFSA

applications, he then admitted that he had indeed submitted

the falsified forms because he wanted to “help people.” 

There is no evidence that Ezeta personally received any

financial benefit for committing the fraud, though the school

presumably received funds improperly obtained through his

fraudulent activities.

The grand jury indicted Ezeta on four counts of financial

aid fraud in violation of 20 U.S.C. § 1097(a). Over the

government’s opposition, Ezeta moved to dismiss the

indictment, arguing that the statute requires personal receipt,

control, or possession of federally insured funds and that the

government failed to allege that Ezeta ever touched, let alone

controlled, the student loan money. Despite the district

court’s verbal indication at argument on the motion that it

would rule in the government’s favor, in issuing its written

decision the court granted Ezeta’s motion to dismiss the

indictment in its entirety. The government now appeals.

II

We review de novo a district court’s dismissal of an

indictment based on its interpretation of a federal statute.

United States v. Gomez-Rodriguez, 96 F.3d 1262, 1264 (9th

Cir. 1996) (en banc). Dismissal of an indictment is

appropriate when it fails to recite an essential element of the

charged offense. United States v. Omer, 395 F.3d 1087, 1088

(9th Cir. 2005) (per curiam). This appeal turns on whether

20 U.S.C. § 1097(a) requires, as an element of the offense,

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6 UNITED STATES V. EZETA

the government to allege and later prove that the defendant

personally received or exercised dominion or control over the

federally insured funds.

III

In interpreting a criminal statute, we begin with the plain

statutory language. United States v. Alexander, 725 F.3d

1117, 1118–19 (9th Cir. 2013). “If the plain meaning of the

statute is unambiguous, that meaning is controlling and we

need not examine legislative history as an aid[] to

interpretation unless the legislative history clearly indicates

that Congress meant something other than what it said.” Id.

at 1118–19 (quoting United States v. Williams, 659 F.3d

1223, 1225 (9th Cir. 2011)).

Section 1097(a) reads:

Any person who knowingly and willfully

embezzles, misapplies, steals, obtains by

fraud, false statement, or forgery, or fails to

refund any funds, assets, or property provided

or insured under this subchapter and part C of

subchapter I of chapter 34 of Title 42 or

attempts to so embezzle, misapply, steal,

obtain by fraud, false statement or forgery, or

fail to refund any funds, assets, or property,

shall be fined not more than $20,000 or

imprisoned for not more than 5 years, or both,

except if the amount so embezzled,

misapplied, stolen, obtained by fraud, false

statement, or forgery, or failed to be refunded

does not exceed $200, then the fine shall not

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UNITED STATES V. EZETA 7

be more than $5,000 and imprisonment shall

not exceed one year, or both.

20 U.S.C. § 1097(a) (emphasis added). It is undisputed that

the government sought to charge Ezeta for “knowingly and

willfully . . . obtain[ing] by fraud [or] false statement” the

student loan funds. 20 U.S.C. § 1097(a). Thus, we must

determine whether the word “obtain” requires a defendant to

exercise personal control over the funds or whether causing

the funds to be disbursed to another recipient is sufficient. 

We conclude that criminal liability under § 1097(a) extends

to knowingly and willfully causing the funds to be disbursed

to a third party by fraud, false statement, or forgery.

The Supreme Court has held that when “a word is not

defined by statute, we normally construe it in accord with its

ordinary or natural meaning.” Smith v. United States,

508 U.S. 223, 228 (1993). To determine a word’s plain and

ordinarymeaning, we may refer to standard English language

dictionaries. See id. at 228–29; United States v. Carona,

660 F.3d 360, 367 (9th Cir. 2011).

The word “obtain” is defined as “[t]o come into the

possession or enjoyment of (something) by one’s own effort,

or by request; to procure or gain, as the result of purpose and

effort; hence, generally to acquire, get” and “[t]o procure

something to be done[;] [t]o induce, prevail upon (a person)

to do something.” Oxford English Dictionary Vol. X, p.

669–70 (2d ed. 1989) (emphasis added). This definition

supports the conclusion that “obtain” is a verb of acquisition

and not one of dominion; it is entirely possible for someone

to “procure,” “acquire,” or “get” something of value for a

third party. See United States v. McFall, 558 F.3d 951, 956

(9th Cir. 2009) (interpreting “obtain” in a different context to

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8 UNITED STATES V. EZETA

require “someone—either the extortioner or a third person”

to receive property and noting that the extortioner does not

need to directly or indirectly benefit (quoting United States v.

Panaro, 266 F.3d 939, 943 (9th Cir. 2001))). Moreover, this

reading is consistent with the rest of the statute, which also

criminalizes attempt. See Brown v. Gardner, 513 U.S. 115,

118 (1994) (noting that ambiguity “is a creature not of

definitional possibilities but of statutory context”).

Under Ezeta’s reading of the statute, the government

would be required to prove that Ezeta exercised dominion and

control over the unlawfully obtained funds. But we hold that

this interpretation unduly restricts the ordinary and natural

meaning of the term “obtain” and conflicts with prior

decisions that have declined to read elements into § 1097(a). 

See Bates v. United States, 522 U.S. 23, 28–31 (1997)

(concluding that specific intent to injure or defraud was not

required under the statute’s “willful misapplication”

language); see also United States v. Ranum, 96 F.3d 1020,

1025–27 (7th Cir. 1996) (holding that intent to deceive is not

an element of financial aid fraud).

Regardless, even if we were to conclude that the meaning

of “obtain” is ambiguous, the legislative history suggests that

Congress intended the statute to cover Ezeta’s alleged crimes. 

The purpose of the financial aid fraud statute is to “provide

broad protection for Title IV student financial aid funds

entrusted to private educational institutions.” United States

v. Bates, 96 F.3d 964, 969 (7th Cir. 1996), affirmed by Bates,

522 U.S. at 29–32 & n.8. Due to the plain meaning of

“obtain” coupled with Congress’s intent that the statute have

broad reach, we hold that the statute encompasses the act of

taking money from the government via false statements and

causing it to be disbursed to others.

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UNITED STATES V. EZETA 9

Finally, other appellate cases that Ezeta cites in support of

his position are consistent with our conclusion that the word

“obtain” requires the disbursement of or the attempt to cause

the disbursement of funds to someone (not necessarily to the

defendant). See, e.g., United States v. Redfearn, 906 F.2d

352, 353–54 (8th Cir. 1990); see also United States v. Morris,

723 F.3d 934, 939 (8th Cir. 2013) (holding that there was

sufficient evidence to convict parents who obtained Pell

Grants by fraud and false statement on behalf of their

daughters).

Although it is undisputed that Ezeta did not receive any

payment for his alleged “services,” it cannot be said that he

did not benefit from them. After all, the tuition money

allegedly diverted from the federal treasury was presumably

spent at the school where Ezeta was employed. And the

record indicates that Ezeta, who received many awards and

accolades for his involvement with the local Hispanic

community, had a reputational interest furthered by the

alleged criminal acts. Regardless of Ezeta’s desire to “help

people,”1if the government proves the allegations in the

indictment beyond a reasonable doubt, Ezeta committed a

crime. A criminal act done with a good heart is still a

1

Ironically, the very students Ezeta claimed to help were at great risk of

being harmed by his alleged actions. The fact that schools occasionally

abuse the federal loan system by preying on vulnerable students who must

later repay the value of an education for which they may not be suited is

well documented. See Jordan v. Sec’y of Educ., 194 F.3d 169, 169–70

(D.C. Cir. 1999) (noting that schools were falsely certifying student ability

to benefit in order to obtain loan funds and discussing newregulations that

provide an avenue for such students to have their debt discharged).

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10 UNITED STATES V. EZETA

criminal act.2See, e.g., United States v. Frost, 281 F.3d 654,

656 (7th Cir. 2002) (noting in a similar case that conduct

defendants believed to be justified was “fraud nonetheless:

lies that induce [the government] to part with [] money are

material”).

Because we hold that exercising personal dominion or

control over the federally insured funds is not an element of

financial aid fraud under the “knowingly and willfully . . .

obtain[ing] by fraud [or] false statement” language of the

statute, we conclude that the district court erred in dismissing

the indictment.3

REVERSED AND REMANDED.

2

Justice Oliver Wendell Holmes, Jr., is rumored to have told a young

Judge Learned Hand that the job of a judge is not to do justice, but to

apply the law. See Michael Herz, “Do Justice!”: Variations of a ThriceTold Tale, 82 Va. L. Rev. 111 (1996). Accordingly, we apply the law.

3 Even if 20 U.S.C. § 1097(a) did require a defendant to exercise

personal dominion or control over the funds, Ezeta would still face

criminal liability. Contrary to Ezeta’s position, we have previously

concluded that the existence of a knowing principal is “immaterial” to

liability under 18 U.S.C. § 2(b) and that “the government need not prove

that someone other than the defendant was guilty of the substantive

crime.” United States v. Causey, 835 F.2d 1289, 1291–92 (9th Cir. 1987)

(upholding a tax protester’s conviction for “aiding, abetting, and causing

individuals to file false tax returns” even though the government failed to

allege and prove that the persons actually submitting the false returns

knew they were false, and therefore failed to prove the existence of

knowing principals). Because it is sufficient that the defendant “assists in

the illegal enterprise” even if he does not personally commit all required

elements and instead “causes the commission of an indispensable element

of the offense [by] an innocent agent,” id. at 1292, Ezeta would be liable

under § 2(b) and punishable as a principal.

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