Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-01438/USCOURTS-ca8-06-01438-0/pdf.json

Parties Involved:
Yvette LaFloe Falcon
Appellant
United States of America
Appellee

Document Text:

1

The Honorable Ralph R. Erickson, United States District Judge for the District

of North Dakota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-1438

___________

United States of America, *

*

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the District

* of North Dakota.

Yvette LaFloe Falcon, *

*

Defendant - Appellant. *

___________

Submitted: October 17, 2006

Filed: February 14, 2007

___________

Before MELLOY, BEAM, and BENTON, Circuit Judges.

___________

MELLOY, Circuit Judge.

Yvette LaFloe Falcon was convicted by a jury of one count of conspiring to

commit an offense against the United States in violation of 18 U.S.C. § 371 and two

counts of embezzlement or misapplication of funds from an Indian tribal organization

in violation of 18 U.S.C. § 1163. The district court1

 sentenced Falcon to eighteen

months’ imprisonment. Falcon appeals, alleging insufficient evidence and plain error

in the jury instructions. We affirm.

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I. Background

Falcon is an enrolled member of the Turtle Mountain Band of Chippewa

Indians (“the Tribe”) in North Dakota. In 1994, she was elected chief clerk of the

Tribe’s court. She was re-elected in two subsequent elections and held the post of

chief clerk during all times relevant to the present offenses. The conspiracy and

embezzlement charges in this case arose from the use of travel funds obtained and

disbursed under Falcon’s signature or under the signature of her convicted coconspirator Sharon Malaterre. The travel at issue was allegedly undertaken for the

purpose of training related to tribal business. During the times relevant to the present

offenses, Malaterre served first as an associate judge and later as chief judge of the

Tribe’s court.

Under the Tribe’s policy regarding business travel, travelers were required to

submit a signed travel authorization request and voucher request to a supervisor or

department head who would approve, sign, and forward the requests to a member of

the executive committee for a final signature and disbursement of funds. The Tribe

considered Falcon and Malaterre to be supervisors or department heads. Members of

the executive committee included officers such as the Tribe’s chairman, vicechairman, etc. Travelers could request and receive up to eighty percent of their

anticipated travel expenses in advance and submit receipts upon the completion of

travel to obtain the lesser of the remaining twenty percent or the actual cost of travel.

In 2001, the Tribe’s chairman instructed Falcon and other department heads and

project administrators that his signature on requisitions served only as

acknowledgment that all other necessary signatures were present. He stated it was the

responsibility of department heads or project administrators to make sure that

requested expenditures were permissible under the terms of relevant grants or funding

sources, and he would interpret their signatures as representations that expenditures

were appropriate. The Tribe’s chairman testified that the large number of grants and

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other funding sources and the large number of departments or line items in the Tribe’s

overall budget made it impractical for the executive committee to track each source

and verify the propriety of every request received from a department head.

Accordingly, the Tribe’s chairman testified that it was necessary, in general, for the

executive committee and the finance office to rely upon representations by the

department heads and grant administrators concerning the propriety of expenditures

under the various grants.

The travel funds at issue in this case relate to travel for two separate seminars

or conferences. The first travel occurred in 1999, and the destination was a

conference in Jacksonville, Florida. The persons who received travel funds for the trip

from North Dakota to Florida included Falcon, Malaterre, Delmark Langen (a Bureau

of Indian Affairs law enforcement officer), and Marilyn Davis (an employee of the

Tribe). These persons had planned to fly to Florida, and Falcon had made flight

reservations for the group. Days before leaving, however, Falcon determined that

flying was not possible. She then approached Langen about using a BIA van for the

trip. Langen obtained a nine-passenger BIA van. The travelers also used a smaller

van owned by a different judge on the Tribe’s court. 

Falcon, Malaterre, and Langen requested and received eighty percent of their

anticipated expenses in advance. Malaterre received $970 and Falcon and Langen

each received over $1934. The amounts advanced to Malaterre and Langen included

anticipated mileage for the trip at $0.31 per mile. Falcon proposed and approved

payment of $0.31 per mile for Langen to drive the BIA van to Florida. This

reimbursement rate was the rate usually paid to persons for driving their own vehicles

during reimbursable travel, not a rate applied to the use of government-owned

vehicles.

Langen, Malaterre, Falcon, and Falcon’s son traveled together to Florida in the

BIA van. Davis, her husband, and her husband’s daughter traveled in the private van.

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The employees’ family members went to Disney World while in Florida. Although

the government strongly inferred at trial that the purpose for taking two vans was to

permit the family members to travel to Disney World for free, such a finding was not

necessary to support the jury’s verdict.

During the trip, Falcon told Langen that Malaterre had run out of money, and

Langen gave a portion of his mileage money to Malaterre. Following the trip, Falcon

submitted trip reports and receipts for the travelers. These submissions included

receipts for hotel stays in Eau Claire, Wisconsin, and Ashley, Illinois. It was shown

at trial that these hotel receipts were false—Langen and Malaterre denied staying in

either of the hotels, and, in fact, the hotels named on the receipts did not exist.

Further, the fabricated receipts were poorly made (for example, Eau Claire was

misspelled on the false receipt). Falcon claimed that Malaterre acted alone and

submitted the false receipts. Malaterre and Langen testified, however, that Falcon

submitted the receipts. Also, Falcon had signed the relevant trip reports.

The second instance of travel at issue in this case was a trip to Las Vegas for

a training conference. Funding for the Las Vegas trip, approved by Falcon, was taken

from a specific federal grant. The federal grant included a limited allocation of funds

for travel. This allocation included money for an attorney to travel to Washington,

D.C., and for the project administrator to travel once to Rapid City, South Dakota, and

once to Bismark, North Dakota. It contained no money for travel to Las Vegas.

According to grant documents and testimony from multiple witnesses, Falcon was the

administrator for the grant and was responsible for creating the budget that was

included in the grant. Notwithstanding Falcon’s knowledge of and responsibility for

the grant, she approved travel for multiple members of the Tribe to a conference in

Las Vegas. The total amount of travel funds requested and paid out under vouchers

approved by Falcon for the Las Vegas trip exceeded the total travel budget of the grant

by thousands of dollars.

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In Las Vegas, multiple Tribe members spent their travel advances at the gaming

tables prior to the conference. The money lost due to gambling included the travel

advances intended to pay the conference fee or tuition. Falcon talked to the

conference director and obtained permission to pay the required fee at a later date.

Ultimately, only one of the travelers paid the conference fee. After the conference,

in her submission for the unpaid twenty percent of her requested travel funds, Falcon

submitted a photocopy of a check for the conference fee and a photocopy of an

envelope that she purportedly used to mail the check to the conference organizers. At

trial, it was revealed that the check was never received by the conference organizers

and that the check had never been cashed. Taken in a light most favorable to the

verdict, we must assume that the jury permissibly concluded that Falcon never sent

the check to pay for the conference tuition and fabricated the evidence she submitted

with her claim for reimbursement.

The government charged Falcon and Malaterre with conspiracy and

embezzlement. Malaterre pleaded guilty to conspiring to defraud the United States

in violation of 18 U.S.C. § 371 and testified against Falcon. The jury received

Malaterre’s plea agreement as evidence in Falcon’s case.

Falcon defended herself at trial by arguing that the Tribe’s executive committee,

comptroller, and finance office had oversight duties regarding the travel expenditures

such that she was free to sign her own and other persons’ requests and vouchers

without regard to the propriety of the travel. Numerous other witnesses, including the

Tribe’s chairman and the comptroller, rebutted these claims. Further, Falcon at no

time presented a reasoned explanation for the submission of false hotel receipts. She

did argue that Malaterre acted alone regarding the false hotel receipts, but other

testimony and evidence rebutted her claim. Finally, she failed to present any

explanation of why Langen received the personal vehicle per-mile rate for driving the

BIA’s van to Florida. 

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Ultimately, the jury rejected Falcon’s characterization of her role as a nonsupervisory, non-responsible party and accepted the testimony of the tribal officials

who had explained the apportionment of responsibilities in the Tribe’s process for

approving travel. 

II. Discussion

A. Jury Instructions

Falcon raises two challenges concerning the instructions on the substantive

counts of embezzlement. She first argues that the district court erred by not

instructing the jury as to the meaning of the word “willfully.” She also argues that the

district court erred by submitting an instruction regarding “deliberate indifference”

even though the embezzlement statute required proof that she acted willfully or

knowingly. 

Falcon did not raise these challenges below, so our review is for plain error. 

United States v. Olano, 507 U.S. 725, 731 (1993). Plain error only exists if (1) there

was an error, (2) the error was plain, (3) the error affected Falcon’s substantial rights,

and (4) a failure to grant relief would “seriously affect the fairness, integrity, or public

reputation of judicial proceedings.” Johnson v. United States, 520 U.S. 461, 466-67

(1997) (internal quotations omitted). An error is only plain if it is a clear violation of

existing law. Olano, 507 U.S. at 734. An erroneous jury instruction only affects

substantial rights if “‘the ailing instruction . . . so infected the entire trial that the

resulting conviction violates due process.’” United States v. Smith, 450 F.3d 856, 859

(8th Cir. 2006) (quoting Estelle v. McGuire, 502 U.S. 62, 72 (1991)) .

Falcon’s first challenge relates to her interpretation of the term “willfully” as

used in 18 U.S.C. § 1163. That section provides:

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Whoever embezzles, steals, knowingly converts to his use or the use of

another, willfully misapplies, or willfully permits to be misapplied, any

of the moneys, funds, credits, goods, assets, or other property belonging

to any Indian tribal organization or intrusted to the custody or care of any

officer, employee, or agent of an Indian tribal organization . . . .

Shall be fined under this title, or imprisoned not more than five years, or

both; but if the value of such property does not exceed the sum of

$1,000, he shall be fined under this title, or imprisoned not more than

one year, or both.

The district court instructed the jury that one element of the offense required

proof that “the Defendant knowingly and willfully permitted to be misapplied assets,

that is, travel funds.” The district court defined the terms “embezzle,” “conversion,”

and “misapply.” The separate instruction that set forth the definition for the term

“misapply” stated:

To “misapply” means to use the funds or property of the Turtle Mountain

Band of Chippewa Indians, knowing that such use is unauthorized, or

unjustifiable or wrongful. Misapplication includes the wrongful taking

or use of the money or property of the Turtle Mountain Band of

Chippewa Indians, by its agent for his or her own benefit, the use or

benefit of some other person, or an unauthorized purpose, even if such

use benefitted the Turtle Mountain Band of Chippewa Indians.

(Emphasis added). 

Falcon asserts that the term willfully in the context of a violation of 18 U.S.C.

§ 1163 requires proof not only that a defendant intentionally or purposely permitted

the misapplication of funds, but that a defendant knew she was violating the law and

acted with a culpable state of mind, i.e., acted with a specific intent to violate the law.

Even if we were to presume that Falcon correctly describes the meaning of the term

“willfully” under § 1163, her argument fails. The definition that the district court

gave to the jury for the term “misapply” incorporated precisely the kind of specific

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intent definition that Falcon advocates. Further, the term “willfully” only appears in

§ 1163 in reference to the acts of misapplying or permitting to be misapplied.

Accordingly, under the instructions used in this case, the jury could not have found

that Falcon acted willfully without finding the mens rea that Falcon believes

applicable to § 1163.

Falcon’s second, related argument is that the district court erred when it gave

the jury a “deliberate indifference” instruction. According to Falcon, such an

instruction permitted the jury to convict based on a finding merely of constructive

knowledge and permitted a conviction where the jury may have only found negligence

or carelessness. This argument misconstrues the nature of the deliberate indifference

instruction and ignores the fact that the district court expressly cautioned against

finding guilt based on negligence. The instruction given by the district court was as

follows:

You may find that the defendant acted knowingly if you find beyond a

reasonable doubt that the defendant was aware of a high probability that

travel funds were being misapplied and that she deliberately avoided

learning the truth. The element of knowledge may be inferred if the

defendant deliberately closed her eyes to what would have otherwise

been obvious to her. 

You may not find that the defendant acted knowingly, however, if you

find that the defendant was simply careless. A showing of negligence,

mistake, or carelessness is not sufficient to support a finding of

knowledge.

This is not, as argued by Falcon, a negligence, constructive knowledge, or

“should have known” instruction. As we and other courts previously have recognized,

a deliberate indifference instruction is not the same as a constructive knowledge

instruction. See United States v. Parker, 364 F.3d 934, 947 n.3 (8th Cir. 2004)

(holding a deliberate indifference instruction adequate where the trial court

admonished the jury against finding the requisite knowledge based merely on the

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defendant’s “negligence, mistake, or carelessness”); United States v. Crabtree, 979

F.2d 1261, 1269-70 (7th Cir. 1992) (rejecting the argument that a deliberate

indifference instruction permitted conviction “for negligence without proof of intent”

and stating that a deliberate indifference instruction “informs the jury that guilty

knowledge can be inferred from a combination of suspicion and deliberate

indifference”). A deliberate indifference instruction is used to inform the jury that a

defendant’s actions, or failures to act, combined with other circumstances may suffice

to prove that a defendant had actual knowledge of a fact. Parker, 364 F.3d at 947.

Here, as in Parker, there was an express admonition to preclude the jury’s finding of

knowledge based merely on a negligence standard. The deliberate indifference

instruction was appropriate because Falcon had argued she did not act willfully or

with the requisite knowledge. Also, her version of the facts laid blame at the feet of

Malaterre but indicated Falcon may have signed vouchers and acted with willful

blindness of Malaterre’s actions.

Further, we note that even if Falcon’s challenges to the instructions had merit,

we would have to conclude that the alleged errors did not affect Falcon’s substantial

rights. The evidence taken in a light most favorable to the jury’s verdict demonstrated

that Falcon fabricated and submitted hotel receipts for hotel stays that never occurred.

Further, it showed that Tribe members used their travel funds to gamble, and Falcon

falsely claimed to have paid conference fees in an effort to hide the misuse of funds.

Finally, the evidence showed that Falcon initiated inappropriate claims for mileage

even though the mileage arose from the use of a government vehicle. Under any

reasonable definition of the term willfully, and without resort to a theory of deliberate

indifference, this evidence suffices to establish a willful misapplication of Tribal

funds.

B. Sufficiency of the Evidence

Falcon also challenges her conviction based on the sufficiency of the evidence.

“We will uphold the conviction ‘as long as there is an interpretation of the evidence

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that would allow a reasonable-minded jury to find the defendant guilty beyond a

reasonable doubt.’” United States v. Johnson, 470 F.3d 1234, 1237 (8th Cir. 2006)

(quoting United States v. Peters, 462 F.3d 953, 957 (8th Cir. 2006)).

Falcon’s challenge rests largely on her own contested testimony, which the jury

clearly rejected. For example, Falcon stated that Langen approached her about using

the BIA van. Langen denied this claim and testified that Falcon requested that he

obtain the BIA van. Falcon testified that the Tribe’s officers, rather than department

heads like herself, were responsible for approving travel and ensuring that travel

expenditures were authorized under the relevant funding sources. The Tribe’s

officers, however, made clear in their testimony that department heads were

responsible for ensuring the propriety of travel. Falcon testified that Malaterre

submitted the voucher requests and false hotel receipts for all employees following the

Florida trip, even though the other employees stated that Falcon received and

submitted their receipts, and even though Falcon signed-off on the submission of the

false hotel receipts.

We will not disturb the jury’s credibility assessments on appeal. United States

v. Jansen, 470 F.3d 762, 765 (8th Cir. 2006) (“[C]redibility determinations are

virtually unreviewable on appeal.”) (internal quotations omitted). As such, we cannot

accept Falcon’s credibility-based challenge and must rely on the jury’s assessment of

the competing testimony. We therefore find that substantial evidence supports the

verdict.

The judgment of the district court is affirmed.

______________________________

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