Opinion ID: 813898
Heading Depth: 4
Heading Rank: 1

Heading: Counts 2-5: False Statements on 1032 Forms

Text: The 1032 forms required Bagshaw to “[r]eport ALL self-employment or involvement in business enterprises,” including “farming; sales work; operating a business . . . ; providing services in exchange for money, goods, or other services” and “activities such as keeping books and records, or managing and/or overseeing a business of any kind, including a family business.” It further required her to “[r]eport ANY work or ownership interest in any business enterprise, even if the business lost money.” Yet Bagshaw never listed any such activities on the forms except investing in alpacas.7 The pole camera video and the home movie clips depicted Bagshaw physically caring for the alpacas. Bagshaw’s neighbor Pinchak testified that Bagshaw cared for the alpacas 75 percent of the time. Pinchak stated that she “rarely” saw Jim Bagshaw helping with the farm. The government introduced evidence of YLEO commission checks from 2008 totaling $243.46, indicating that Bagshaw received outside income.8 The 1032 forms further required Bagshaw to say whether she had “perform[ed] any volunteer work for which ANY FORM of monetary or in-kind compensation was received.” Bagshaw wrote 7 Bagshaw argues that she used the term “invest” in an active sense and therefore was not engaging in a deliberate scheme to defraud. Evidently she use the word in this sense when talking with Agent Morgano at the alpaca event. But during the QAR interview, she used the word “invest” in a strictly passive sense. 8 Bagshaw argues that these checks were “rebates” and “not true ‘commissions’ or income.” But a reasonable juror could have concluded that these checks were for commissions, as indicated by Casey Harris, legal counsel for YLEO. Also, although the checks were payable to Jim Bagshaw and endorsed over to Karen, there is evidence in the record that Karen was the one primarily involved in selling the YLEO products. - 34 - No. 12-3074 United States v. Bagshaw “no.” Yet an exhibit the government introduced at trial showed that Bagshaw received a complementary stall, valued at $25, for volunteering as a clerk at an alpaca show in March 2008. Testimony introduced by the government indicated that misrepresentations as to business activities were material. David Cattani, a senior claims examiner with the OWC, testified that the accuracy of a claimant’s reporting “[was] everything to us, because again, we don’t see anything for ourselves. We rely on what the claimant tells us.” The accuracy was crucial because “all [the claimant’s] benefits are always contingent upon the injury being ongoing. As soon as [the OWC] can establish that the injury is no longer there, then [the claimant is] not entitled to benefits any more.” Cattani further testified that statements about activities and earnings were significant because benefits would be offset by any earning potential, and the OWC would compare activities listed for consistency with the medical opinions. Cattani stated that it was “significant” not to have farming activities included on the 1032 forms. He also testified that it would be “significant” not to include activities as a salesperson or distributor of retail products because it “would show not only earnings, but the capacity to run a business [or] do sales marketing.” He explained that the reporting “has nothing to do with the income generated, it is the work being performed, which is a demonstration of your ability to do something, and then we assign a value to that work to offset the wages.” Based on this testimony, we conclude that Bagshaw’s misrepresentations as to her business activities on the 1032 forms were material. We view the statement denying the receipt of compensation for volunteer activities to be immaterial. The only evidence of such compensation was a complementary stall worth $25. In our view, this amount is so negligible as to render the false statement immaterial. We also doubt whether the small amount of money received as YLEO - 35 - No. 12-3074 United States v. Bagshaw commissions was material. Nonetheless, Bagshaw was convicted for her misstatements on the forms as a whole. Each form falsely represented that Bagshaw only invested in alpacas, and these false statements were material. Therefore, a reasonable juror could have found that Bagshaw made material false statements on each of the four 1032 forms. Bagshaw also argues that she did not have a specific intent to defraud when answering the questions on the 1032 forms because she did not understand the questions. She points to a record of a 2004 phone call in which she asked an OWC representative questions about an overpayment. The notation on the call record indicates that Bagshaw was confused and wanted assistance completing forms. However, the note also states that Bagshaw was told that she could receive assistance with questions, although the OWC could not complete the forms for her. Bagshaw also points to the QAR interview, in which she told Agent Dancer that she did not know what else to list for business activities except for investing in alpacas. However, the interview transcript demonstrates that she clarified for Agent Dancer that her only activity was “providing funding” and that she was doing no care or bookkeeping. Despite these examples of possible confusion, a reasonable juror could conclude that Bagshaw acted with the intent to defraud when completing the 1032 forms.