NOT RECOMMENDED FOR PUBLICATION

File Name: 19a0476n.06

No. 18-3620

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES D. MOODY,

Defendant-Appellant.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE

NORTHERN DISTRICT OF 

OHIO

BEFORE: BOGGS, BATCHELDER, and STRANCH, Circuit Judges.

BOGGS, Circuit Judge. This case arises out of a fraud masterminded by Daniel Morris. 

One witness described Morris as “a male Mother T[e]resa.” Instead of giving charity to the poor 

of Kolkata, he gave cash, houses, and cars to his employees and associates in Toledo, Ohio. He 

paid for these gifts by defrauding the government. Morris was the general manager of a company 

called BRIDGES, which had contracts to give job training to recipients of Temporary Assistance 

to Needy Families. BRIDGES did provide the training, but Morris overbilled for its services by at 

least $3.5 million. 

One recipient of Morris’s largesse—almost $560,000 of it—was James Moody, the sole 

owner of BRIDGES. Moody received purported dividends, paychecks and health insurance for a 

no-show job, money for a vacation, and cash infusions for his struggling real-estate business. All 

of this money came out of corporate checking accounts owned by BRIDGES. After the IRS 
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discovered the overbilling, a jury convicted Moody of conspiracy, federal-program fraud, and 

money laundering.

On appeal, Moody contends that the district court abused its discretion by denying his 

motion to admit expert testimony. He also challenges the sufficiency of the evidence. Finally, he 

argues that his sentence is procedurally unreasonable. Finding these arguments unpersuasive, we 

affirm.

I. Background

BRIDGES opened for business in 2001. Moody invested $50,000 to start the company, and 

by the time of the events at issue in this case, he was its sole owner. But he “made . . . clear from 

the get go that [he] did not want to have any kind of role” in its day-to-day operations. Instead, 

Morris served as general manager, and his job “was to run everything.” 

From 2004 to 2015, BRIDGES entered into 17 contracts with the Lucas County, Ohio,

Department of Job and Family Services worth about $15.7 million. These contracts related to 

TANF, a cash-assistance program for certain low-income households. The federal Department of 

Health and Human Services funds TANF by giving block grants to the states. In Ohio, the state 

passes the money to county agencies, which administer the program. Lucas County hired 

BRIDGES to help TANF recipients find and train for jobs. 

BRIDGES was a for-profit company, but its contracts with Lucas County prohibited it from

making a profit on its TANF business. Instead of fixing fees in advance, the contracts required 

BRIDGES to pay its own expenses and periodically request reimbursement from the county for 

the actual cost of its programs. 

This is where the fraud happened. BRIDGES did real work, but Morris inflated the 

reimbursement requests. He invented “ghost employees,” overstating the company’s payroll 
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expenses, and he also exaggerated his real employees’ transportation expenses. To survive annual 

audits by the county, Morris ordered his accountant to keep “a separate set of books.” For further 

documentation, Morris and the bookkeeper falsified bank records, audit reports, and boardmeeting minutes. They also created fake time sheets and mileage reports. Morris admitted at trial 

that his purpose was to make a profit on the supposedly not-for-profit TANF contracts. 

Morris got caught because of a parallel tax-fraud scheme. He withheld payroll taxes from 

BRIDGES employees’ paychecks and pocketed the money instead of remitting it to the Treasury. 

The IRS found out; its investigation soon uncovered the overbilling scheme. The IRS also learned 

that Morris had passed a hefty share of the overbilling proceeds on to Moody.

The payments to Moody totaled $559,806.12, and they fell into four categories.

o Salary: Moody was not a BRIDGES employee and he did no work for the company, but 

Morris put him on the payroll anyway. Moody’s salary for his no-show job was about 

$70,000 per year, plus health insurance. Later, the paychecks went to Moody’s wife 

instead; she also did no work for the company. These payments totaled $396,198.79, and 

they only stopped when BRIDGES lost its TANF contracts and shut down. 

o Dividends: Moody received several checks from a BRIDGES account, totaling at least 

$17,000, that were labeled as dividends. He accepted these checks even though dividends 

to shareholders were not a reimbursable expense under the not-for-profit TANF contracts.

o Real estate: Moody’s primary business was another company he owned, Flex Realty. 

“[W]hen things started getting rough in the real estate industry, and Flex Realty was having 

some trouble,” Morris used BRIDGES money to “help[ ] [Moody] with his cash flow,” to 

the tune of $14,600. Morris gave Moody more BRIDGES money so that the pair could buy 

an apartment building as a joint investment. According to Moody, these payments were 

loans, not gifts, but there were no written agreements, and he never paid Morris back for 

his share of the apartment building. 
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o Miscellaneous personal expenses: Morris used BRIDGES money to help Moody pay for a 

vacation in Africa and to cover some of Moody’s legal fees when the IRS investigation 

began. 

A grand jury returned a 29-count indictment against BRIDGES, Morris, Moody, and codefendants Victoria Hawkins and Angela Bowser. (We address Hawkins’s and Bowser’s appeals, 

Nos. 18–3497 and 18–3499, in separate opinions.) Morris pled guilty to reduced charges. The 

district court dismissed the charges against BRIDGES on the government’s motion. Moody went 

to trial (along with Hawkins and Bowser). The jury convicted him of:

Count(s) Offense Statute

1 Conspiracy to commit program fraud and 

mail fraud

18 U.S.C. § 371

2 Program fraud 18 U.S.C. § 666(a)(1)(A)

13 Money-laundering conspiracy 18 U.S.C. §§ 1956(a)(1)(B)(i),

1956(h), 1957(a)

20–22 Money laundering 18 U.S.C. § 1956(a)(1)(B)(i)

The district court sentenced Moody to five and a half years in prison. 

II. Excluded Expert Testimony

At trial, Moody moved to call Garth Tebay, a CPA, as an expert witness. The district court 

denied his motion, concluding that Tebay’s proposed testimony was “untethered . . . to the facts of 

this case,” and therefore “neither relevant nor reliable.” Moody argues that this was an abuse of 

discretion. We disagree.

When a litigant wants to introduce expert testimony, the district court has “a gatekeeping 

role” and must ensure that the proposed testimony “both rests on a reliable foundation and is 

relevant to the task at hand.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597 (1993).

Expert testimony is admissible if, as relevant here:
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1. “the expert’s . . . specialized knowledge will help the trier of fact to understand the 

evidence or to determine a fact in issue,”

2. “the testimony is based on sufficient facts or data,” and

3. “the expert has reliably applied the principles and methods to the facts of the case.”

Fed. R. Evid. 702(a)–(b), (d). 

“The question before the trial court was specific, not general. The trial court had to decide 

whether this particular expert had sufficient specialized knowledge to assist the jurors in deciding 

the particular issues in the case.” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 156 (1999) (cleaned 

up). Put another way, Rule 702 “requires a valid . . . connection to the pertinent inquiry as a 

precondition to admissibility.” Daubert, 509 U.S. at 592. Tebay’s proposed testimony was 

insufficiently connected to the facts and issues in this case, so the district court did not abuse its 

discretion by excluding it. The proposed testimony covered three topics, which we will discuss in 

turn.

A

Tebay first would have testified about “the reasonable expectations of the sole owner of a 

small, for profit, C Corp.” He planned to opine that “on average, people who invest in small, 

closely-held companies make a lot [of] money on their investment,” and therefore “it was not fishy 

that Moody got money from BRIDGES for other than his labors.” But the fishiness of Moody’s 

arrangement depends on the legitimacy of the company’s profits and the terms of its contracts, and 

there is no indication in the record that Tebay read those contracts or knew the details of the 

business. No matter how good an accountant he is, Tebay’s opinion would not have been “based 

on sufficient facts or data,” so it was inadmissible. Fed. R. Evid. 702(b). See also Gen. Elec. Co. 

v. Joiner, 522 U.S. 136, 146 (1997) (“A court may conclude that there is simply too great an 

analytical gap between the data and the opinion proffered.”).
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Moody also failed to establish the relevance of Tebay’s statement that on average, smallbusiness owners profit from their investments. Moody’s defense centered on his own subjective 

expectations about his investment in BRIDGES. He claimed that he anticipated making a profit, 

and he did not know that BRIDGES was only supposed to be reimbursed for its actual costs, so he 

did not find it suspicious when he received infusions of company cash. Tebay would have testified 

about something different: the hypothetical expectations of the average small-business owner. 

Tebay’s proposed testimony did not address “[t]he particular issue in this case,” so it was 

inadmissible. Kumho Tire, 526 U.S. at 157. See also Naeem v. McKesson Drug Co., 444 F.3d 593, 

608 (7th Cir. 2006) (holding expert testimony inadmissible where it “appeared to be general 

observations regarding what is normal or usual business practice” and was “not tied to specific 

portions” of the other evidence in the case).

B

Next, Tebay planned to testify about “the average return on a $50,000 investment in 

companies in the Vocational Rehabilitative Services industry operating in the State of Ohio” or 

elsewhere in the Midwest “during the relevant time period.” The amount of money Moody got 

from BRIDGES “did not exceed the rate of return of the average investor in this industry sector.”

Again, Tebay’s analysis was not connected to Moody’s own expectations about his investment in 

BRIDGES. Moody wanted the jury to make the following chain of inferences:

1. The average return on a $50,000 investment in a Midwestern vocational-rehabilitation 

company during the relevant time period was n dollars per year.

2. Moody believed that BRIDGES was comparable to the average company in this 

comparison group.

3. Therefore, Moody expected his investment in BRIDGES to also return n dollars per year.

4. BRIDGES paid Moody n dollars per year or less.
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5. Because the money he received from BRIDGES did not exceed his expected return, Moody 

did not know or suspect the payments to be fraudulent.

Tebay’s testimony would have established Step 1 in this chain. The problem is that Moody’s own 

testimony (along with the rest of the evidence in the record) failed to fill in Steps 2, 3, and 5. 

Moody never testified that he knew or cared how much the comparator companies made. In fact, 

because his day job was in real estate, he knew very little about the industry BRIDGES operated 

in. He simply claimed that he expected his investment in BRIDGES to be profitable. 

Consequently, this part of Tebay’s proposed testimony lacked foundation. Connecting his 

industry-average calculations to Moody’s subjective expectations required “a leap of faith.” 

Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 670 (6th Cir. 2010). Without Moody’s testimony to 

fill in the missing steps, Tebay’s proposed testimony was merely “a plausible hypothesis,” and 

therefore was inadmissible. Ibid.

Moody argues that the industry-average calculations were “as specific as” the law “would 

allow.” He points out that expert witnesses in criminal cases “must not state an opinion about 

whether the defendant did or did not have a mental state or condition that constitutes an element 

of the crime.” Fed. R. Evid. 704(b). Moody seems to think Rule 704(b) limits expert testimony in 

criminal cases to general theories, making civil cases like Daubert, Kumho Tire, and Tamraz 

inapplicable. 

Not so. Rule 704(b) does not override Rule 702’s requirements of relevance and reliability; 

it just forbids experts from opining on the ultimate issue of a criminal defendant’s mens rea. So, 

for example, a defense expert in a program-fraud case cannot testify that the defendant “lacked an 

intent to defraud.” United States v. Frost, 125 F.3d 346, 383 (6th Cir. 1997). But she can testify 

that the defendant’s billing practices “made it obvious what he was doing.” Ibid. Similarly, in a 

money-laundering case, a government expert may testify that “the effect of a transaction is to 
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conceal,” but not that “it was done with an intent to conceal the true nature and disposition of the 

funds.” United States v. Warshak, 631 F.3d 266, 324 (6th Cir. 2010). In both examples, the 

permissible testimony is still connected to a “particular issue in [the] case.” Kumho Tire, 526 U.S. 

at 157. Tebay’s calculations were not, so the district court did not abuse its discretion by excluding 

them.

C

The final subject of Tebay’s proposed testimony was “the tax consequences of taking 

distributions of profits in the form of salary.” This, too, was inadmissible, because there was no 

evidence that these “tax consequences” were the reason for any of the transactions at issue in 

Moody’s trial.

While Moody received some checks labeled as “dividends” from BRIDGES, Morris 

switched to paying him a salary, even though he was not a BRIDGES employee. This practice “is 

not proper from a corporate governance or tax perspective,” as Moody concedes. In closing, the 

government went further: It portrayed Moody’s “paycheck for a no-show job” as evidence that he 

knew about Morris’s fraud. 

Tebay’s proposed testimony was meant to rebut this argument. He would have explained 

that salaries “can be deducted from income on the corporate tax return,” and so are only taxed 

once, while profits distributed as dividends are taxed twice, once as corporate income and once as 

personal income. Thus, Moody claims, there was “a tax savings motive” for putting him on the 

BRIDGES payroll, and the arrangement does not imply that he knew about Morris’s overbilling. 

This argument fails because nothing in the record suggests that these tax considerations 

were actually the reason Moody received BRIDGES paychecks. This makes the proposed 
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testimony inadmissible—it would have been “irrelevant, confusing, and perhaps even misleading.” 

United States v. Kokenis, 662 F.3d 919, 927 (7th Cir. 2011).

Kokenis is quite similar to this case. The defendant owned a business that “explored for oil 

and natural gas.” Id. at 922. He misreported some of his profitable sales as liabilities, and he was 

convicted of filing false income-tax returns. Id. at 921–23. “At trial [he] wanted to argue that he 

had a good-faith belief that he wasn’t violating the tax laws.” Id. at 926. To support this defense, 

he sought to introduce expert testimony from “a tax accounting professor,” who would have

explained that “the pool of capital theory” makes it permissible to characterize “certain sales of 

working interests in oil and gas development projects” in the way the defendant did. Id. at 926–

27. But the professor “did not offer any opinion that the theory was applicable to any transaction 

in this case,” and the defendant “offered no evidence that he actually relied on the pooling capital 

theory” in preparing the returns at issue. Id. at 927.

The district court excluded the professor’s proposed testimony, and the Seventh Circuit 

affirmed. Ibid. It explained that “[o]ffering testimony on a theory in general, without tying it to the 

case on trial[,] is insufficient.” Ibid. That is exactly what Moody tried to do here: He offered expert 

testimony on a general theory of why a shareholder might receive a paycheck instead of a dividend, 

without tying that theory to the facts of this case. Moody “offered no evidence that he” or anyone 

at BRIDGES “actually relied on” the double-taxation theory. Ibid. Consequently, Tebay’s 

proposed testimony about the theory “was properly excluded.” Ibid.

III. Sufficiency of the Evidence

The government needed to prove that Moody knew about the fraudulent origins of the 

money he accepted. But when he testified at trial, he claimed complete ignorance of the finances 

of BRIDGES, and neither Morris nor the company’s bookkeeper implicated him in the overbilling 
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and document-forging. Thus, Moody contends, the evidence of knowledge is insufficient to sustain 

his convictions. We disagree.

In sufficiency-of-the-evidence challenges, “the relevant question is whether, after viewing 

the evidence in the light most favorable to the prosecution, any rational trier of fact could have 

found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 

443 U.S. 307, 319 (1979). It is the jury’s job, not ours, “to resolve conflicts in the testimony, to 

weigh the evidence, and to draw reasonable inferences from basic facts to ultimate facts.” Ibid.

Each of the charged offenses has a knowledge element. Conspiracy requires proof that the 

defendant “knowingly joined an agreement to commit” a crime. United States v. Phillips, 872 F.3d 

803, 806 (6th Cir. 2017). The program-fraud statute applies to a defendant who “embezzles, steals, 

obtains by fraud, or otherwise without authority knowingly converts to the use of any person other 

than the rightful owner” government funds or property. 18 U.S.C. § 666(a)(1)(A) (emphasis 

added). Money-laundering conspiracy requires proof that the defendant “knowingly and 

voluntarily joined” the agreement. R. 161 at 2412 (so instructing the jury). The substantive moneylaundering offense applies if the defendant engages in certain transactions “knowing that the 

property involved . . . represents the proceeds of some form of unlawful activity,” 18 U.S.C. 

§ 1956(a)(1), while also “knowing that the transaction is designed . . . to conceal or disguise the 

[unlawful] nature” of the proceeds. Id. § 1956(a)(1)(B)(i).

As Moody points out, the government introduced no direct evidence that he knew about 

the overbilling. Moody testified that “Dan Morris . . . r[a]n everything,” and he claimed he “had 

no idea . . . how BRIDGES worked.” He specifically denied knowing that BRIDGES was only 

allowed to bill for its actual costs. Morris testified that he never told Moody what he was up to. 

Moody did not prepare the inflated invoices and budgets or deal with the county on financial 
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matters. He was not involved in keeping a second set of books or forging financial records, either;

that was Morris and the bookkeeper. And he had no signature authority on the relevant bank 

accounts. Thus, a reasonable juror could have voted to acquit Moody.

But it does not follow that no reasonable juror could have voted to convict him. “As we 

have noted in the past, it can be difficult to obtain direct evidence of something so internal as intent 

to commit fraud.” United States v. Washington, 715 F.3d 975, 980 (6th Cir. 2013). Jurors are 

therefore free to “consider circumstantial evidence and draw reasonable inferences from” it. Ibid.

Jurors may also “view [a testifying defendant’s] demeanor and judge his credibility”; on appeal, 

“[w]e are loath to override their conclusion.” United States v. Davis, 490 F.3d 541, 550 (6th Cir. 

2007).

“[A]fter viewing the evidence in the light most favorable to the prosecution,” a reasonable 

juror could have found sufficient evidence of Moody’s knowledge. Jackson, 443 U.S. at 319. First, 

Moody received large sums of money, unrelated to BRIDGES business but straight out of 

BRIDGES bank accounts, for years. He and his wife received paychecks, even though, as he later 

testified, neither of them worked at BRIDGES. His real-estate company also received payments, 

even though it had no business relationship with BRIDGES. And he received money for a vacation 

and an investment property, even though these expenses were unmistakably purely personal. This 

added up to nearly $560,000—none of it connected to any legitimate, reimbursable business 

expense. 

This alone is sufficient circumstantial evidence that Moody knew about the fraud. See, e.g., 

United States v. Dodson, 817 F.3d 607, 610 (8th Cir. 2016) (holding that evidence of knowledge 

was sufficient in another program-fraud case where the defendant was not directly involved in the 

overbilling scheme—in part because he “cashed checks for work he knew he did not do . . . from 
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an organization he had never worked for”); United States v. Weaver, 220 F. App’x 88, 91–92 (3d 

Cir. 2007) (holding, in a wire-fraud case, that the defendant’s receipt of paychecks for a no-show 

job was sufficient evidence of specific intent to defraud).

Second, Moody continued accepting these payments for four years after the IRS began 

investigating BRIDGES—without once inquiring into their legitimacy or source. The IRS 

investigation began in June 2010. On July 28, 2010, Revenue Officer Janet Kimple interviewed 

Moody. She gave him a letter explaining that BRIDGES was “not making [its] tax deposits.” 

Moody met with the IRS again on October 29, 2010, and Kimple again confronted him about the 

unpaid payroll taxes. These were significant events for Moody: “The IRS showed up at the door 

and demanded $1,000,000 on the spot. That got [his] attention. . . . [He] was stunned.” And Moody 

had known since 2001, when he first met Morris and started BRIDGES, that Morris had “had tax 

problems” in the past. That is why the company was incorporated in Moody’s name rather than 

Morris’s. So Moody confronted Morris and hired a lawyer. But he did not stop accepting a salary 

for a no-show job and reimbursements for personal expenses. He continued cashing BRIDGES 

checks for another four years, stopping only in December 2014, a few months before BRIDGES 

lost its TANF contracts and shut down. 

A reasonable juror could have inferred from all this that Moody “deliberately ignored a 

high probability that the money obtained from BRIDGES was procured by fraud.” This was

enough to “find that he . . . had the required knowledge.” R. 161 at 2356–57 (so instructing the 

jury). See also United States v. Reeves, 636 F. App’x 350, 354 (6th Cir. 2016) (“The fact that she 

neglected to take corrective action upon learning about the fraudulent scheme also provided a 

reasonable basis to disbelieve her claim that she was ignorant [of] the fraud being perpetrated.”).
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Third, Moody made false statements to the IRS about his and his wife’s roles in BRIDGES, 

in a way that made their no-show paychecks appear justified. In his July 2010 interview with 

Kimple, Moody insisted that “he was just a shareholder,” and at their second meeting in October 

2010, he repeated that “[h]e was just an investor.” But he changed his story once the IRS’s criminal 

investigators took over the case. In June 2012, Special Agent Dean Martin interviewed Moody. 

Moody “said that he worked at BRIDGES, and he was compensated for his services there.” He 

told Martin that his role “was strategic planning and job development . . . he would use his business 

contacts” to place BRIDGES clients with prospective employers. He also said his wife worked at 

BRIDGES, performing similar duties. In fact, Moody was not a BRIDGES employee; nor was his 

wife. As Moody explained at trial, by the time of the events at issue, he was just a passive investor,

and his wife was “a homemaker.” 

A reasonable juror could have inferred from Moody’s false statements that he knew about 

the fraud and “sought to conceal his own wrongful acts.” Davis, 490 F.3d at 550. See also Dodson, 

817 F.3d at 610 (holding evidence of knowledge to be sufficient where the defendant, who received 

paychecks “from an organization he had never worked for[,] . . . lied to an investigator about doing 

the work,” describing in detail “the work he supposedly did”).

Fourth, the jury did not have to believe Moody’s self-serving claims of ignorance about 

the contracts and finances of BRIDGES. Moody testified that he was not familiar with the terms 

of the contracts and had no idea they forbade the payments he accepted. But he also admitted on 

cross examination that in his real-estate business, he read the contracts for transactions he was 

involved in, advised his clients to do the same, and that this is what a good businessman would do. 

Moreover, in the early days of BRIDGES, Moody was responsible for the company’s finances. He 

controlled the corporate checkbook and paid the rent and salaries. The jury had “an opportunity to 
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view his demeanor and judge his credibility.” Davis, 490 F.3d at 550. It did not have to credit his 

story, and it reasonably could have found that he still took an interest in the BRIDGES contracts 

and budget. After all, he owned 100 percent of the company. 

For these four reasons, viewed in the light most favorable to the government, the evidence 

of knowledge is sufficient to sustain Moody’s conviction.

IV. Sentence

Finally, Moody argues that the district court miscalculated the Guidelines range, rendering 

his five-and-a-half-year sentence procedurally unreasonable. See Gall v. United States, 552 U.S. 

38, 51 (2007). The main factor in the Guidelines calculation was the size of the financial loss 

attributable to Moody. The district court found him responsible for about $3.5 million, the amount 

diverted by the entire overbilling scheme (including the payments to his co-defendants Hawkins 

and Bowser). This yielded a Guidelines range of 63 to 78 months in prison. Moody contends that 

he is only responsible for $550,000, the amount he and his wife personally received (with a few 

deductions). This would have reduced his Guidelines range to 33 to 41 months. 

We see no clear error in the district court’s calculation.

A

In fraud cases, the Sentencing Guidelines provide for various enhancements based on the 

amount of loss. U.S.S.G. § 2B1.1(b). In calculating the loss, the district court considers the 

defendant’s “relevant conduct,” including, “in the case of a jointly undertaken criminal activity” 

such as a conspiracy, “all acts and omissions of others that were . . . within the scope of the jointly 

undertaken criminal activity, in furtherance of that criminal activity, and reasonably foreseeable 

in connection with that criminal activity.” U.S.S.G. § 1B1.3(a)(1)(B) (internal numbering 

omitted). 
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“[W]hether conduct constitutes ‘relevant conduct’ under . . . § 1B1.3(a)(1)(B) is reviewed 

de novo, while the underlying factual findings regarding whether that conduct is ‘within the scope’ 

of, ‘in furtherance’ of, and ‘reasonably foreseeable’ in connection with jointly undertaken criminal 

activity are reviewed for clear error.” United States v. Donadeo, 910 F.3d 886, 893 (6th Cir. 2018).

The primary issue in this case is the scope of Moody’s jointly undertaken criminal activity. 

“Significantly, this is not necessarily the same as the scope of the entire conspiracy.” Id. at 894–

95 (cleaned up). After Moody was sentenced but before appellate briefing concluded, Donadeo set 

out six “factors relevant to determining the scope of the criminal activity that a defendant agreed 

to jointly undertake”:

o The existence of a single scheme,

o Similarities in modus operandi,

o Coordination of activities among schemers,

o Pooling of resources or profits,

o The defendant’s knowledge of the scope of the scheme,

o The length and degree of the defendant’s participation in the scheme.

Id. at 895. 

Although it was decided after Moody’s sentencing, Donadeo governs his appeal. See, e.g., 

Bradley v. Sch. Bd. of City of Richmond, 416 U.S. 696, 711 (1974) (“[A] court is to apply the law 

in effect at the time it renders its decision, unless doing so would result in manifest injustice or 

there is statutory direction or legislative history to the contrary.”); United States v. Schooner 

Peggy, 5 U.S. (1 Cranch) 103, 110 (1801) (Marshall, C.J.) (“[I]f subsequent to the judgment and 

before the decision of the appellate court, a law intervenes and positively changes the rule which 

governs, the law must be obeyed, or its obligation denied.”). 
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We find it unnecessary to remand for the district court to analyze Donadeo’s six factors in 

the first instance. Neither Moody nor the government requests a limited remand for this purpose.1

Compare United States v. Afriyie, No. 17-2444, 2019 WL 2909164, at *8 (2d Cir. July 8, 2019) 

(remanding for recalculation of restitution in light of post-sentencing caselaw, where the defendant 

requested a remand and the government “consent[ed]”). Also, while Donadeo endeavored to “state 

more clearly what is relevant to determining the scope of the criminal activity that a defendant 

agreed to jointly undertake,” it did not explicitly change the law. 910 F.3d at 895. Donadeo 

acknowledged that “without articulating them, we have frequently relied on” the six factors in 

previous opinions. Ibid.; see id. n.5 (collecting cases). Finally, Moody and the government 

addressed many of the same concepts in their sentencing memoranda and at the sentencing hearing, 

and the district court’s explanation of its Guidelines calculation was clear enough “to allow for 

meaningful appellate review” under the Donadeo framework.

2 Gall, 552 U.S. at 50. 

B

The first Donadeo factor is “the existence of a single scheme.” 910 F.3d at 895. This factor 

supports the district court’s finding that Moody is accountable for the entire $3.5 million loss. The 

overbilling scheme “had a single, unlawful objective—to obtain as much money from [the TANF 

program] as possible.” Id. at 896.

The second factor is “similarities in modus operandi.” Id. at 895. This factor also supports 

the district court’s finding. Moody, Morris, Hawkins, and Bowser “all defrauded [TANF] in the 

 

1 At oral argument, the government opposed a remand, arguing that Donadeo clarified the law but did not change it, 

and that the district court properly applied the relevant Guidelines provisions and addressed many of the same concepts 

as Donadeo. Moody argued that the district court erred with or without Donadeo.

2 Moody argues that the district court failed to explain the basis for its findings regarding the scope of his jointly 

undertaken criminal activity. A sentencing court always has an “obligation . . . to communicate clearly its rationale 

for imposing the specific sentence.” United States v. Richardson, 437 F.3d 550, 554 (6th Cir. 2006). But not every 

case calls for a “lengthy explanation.” Rita v. United States, 551 U.S. 338, 356 (2007). Here, the district court made 

numerous factual findings on the record, and the transcript of the sentencing hearing makes its rationale clear.
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exact same manner[,]” by accepting overbilled funds out of BRIDGES accounts and using the 

money for personal expenses. Id. at 896.

The third factor is “coordination of activities among schemers.” Id. at 895. This factor 

supports Moody’s argument that he is only accountable for the money he and his wife accepted. 

There is no evidence of coordination between Moody, Hawkins, and Bowser. All three coordinated 

with Morris, but not with each other. This contrasts with Donadeo, where two of the defendants 

“jointly established and owned” a shell company, and “once the scheme was discovered, the entire 

group . . . met . . . to discuss how to respond to the inevitable police investigation.” Id. at 897.

The fourth factor, “pooling of resources or profits,” also supports Moody’s argument. Id. 

at 895. There is no evidence that he benefited from Morris’s payments to Hawkins and Bowser—

unlike in Donadeo, where two of the defendants “jointly established and owned” a shell company, 

deposited embezzled money in a shared bank account, and used the shared account “to fund check 

and debit card purchases.” Id. at 897.

The fifth factor is Moody’s “knowledge of the scope of the scheme.” Id. at 895. While 

there is no direct evidence that Moody knew about Morris’s payments to others, the district court 

pointed to significant circumstantial evidence at the sentencing hearing. It noted that:

o “Mr. Moody is a businessman . . . who deals with contracts and who was a selfproclaimed entrepreneur.” 

o Moody “invested $50,000 as seed money for BRIDGES after meeting with [Morris], 

whom he knew to have had . . . prior problems with the IRS.” 

o “As a sole shareholder, he should have been aware of annual meetings and a board of 

directors, but there were no meetings and there was no board.” 

For these reasons, the district court found that Moody knew “or should have . . . known” about the 

full extent of Morris’s overbilling: “You had to know money was being hidden from Job and 

Family Services . . . certainly the money that you took and that Morris took, and . . . you should
No. 18-3620, United States v. Moody

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have known other monies were being taken as well.” This may not have been the only possible 

finding, but circumstantial evidence in the record supports it.

The sixth factor is the “length and degree of the defendant’s participation in the scheme.” 

Donadeo, 910 F.3d at 895. This factor also supports the district court’s finding. Moody participated 

in the scheme from 2006 to 2014, longer than Hawkins (2010–2014) and Bowser (2010–2015). 

And, like the defendant in Donadeo, Moody “played a ‘middle of the tier’ role in the scheme.” Id. 

at 898. As the district court noted, Moody was “an owner—the sole owner—and the only person 

who collected so-called dividends.” Hawkins and Bowser, on the other hand, “had more limited 

roles in the company.” 

In sum, the Donadeo factors lend sufficient (though not unequivocal) support to the district 

court’s finding that Moody was responsible for $3.5 million in losses. We acknowledge that this 

case does not involve a classic hub-and-spoke conspiracy, in which “concerted action was 

contemplated and invited” and each participant “knew that cooperation was essential to successful 

operation of the plan.” Interstate Circuit v. United States, 306 U.S. 208, 226 (1939). The district 

court could reasonably have relied on the lack of coordination and sharing of resources and profits 

to hold Moody responsible for only the money he accepted. See U.S.S.G. § 1B1.3, comment. 

(n.4(C)(vi)). But “to be clearly erroneous . . . a decision must strike us as more than just maybe or 

probably wrong; it must strike us as wrong with the force of a five-week-old, unrefrigerated dead 

fish.” United States v. Perry, 908 F.2d 56, 58 (6th Cir. 1990) (cleaned up). The district court’s 

finding regarding the scope of Moody’s jointly undertaken criminal activity does not rise to this 

level.
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C

Finally, Moody points out a factual error in the district court’s explanation of his sentence. 

After BRIDGES shut down, Moody tried to start a new company to bid on more TANF contracts. 

The district court stated that Moody “attempted to form . . . another company with Morris.” In fact, 

there is no evidence in the record that Morris was involved in Moody’s effort. “[S]electing a 

sentence based on clearly erroneous facts” is a “significant procedural error.” Gall, 552 U.S. at 51. 

Here, however, our review of the sentencing transcript gives no inkling that Moody’s postBRIDGES activities were the basis for the district court’s choice of sentence. Instead, the court 

appears to have made an isolated mistake about a collateral matter while summarizing the trial 

evidence.

V. Conclusion

For these reasons, we AFFIRM Moody’s conviction and sentence.