Opinion ID: 206048
Heading Depth: 1
Heading Rank: 4

Heading: The submission of false time sheets, progress reports, and other false statements

Text: The evidence at trial showed that Schmitz, while on the CITY Program payroll, attempted to conceal her failure to work by submitting false time sheets, progress reports, and otherwise making false statements about her work performance. CITY Program policies provide that all employees, including salaried employees like Schmitz, were required to submit monthly time sheets. Schmitz, who started her employment in February 2003, did not submit any time sheets until October 2003. After ignoring several requests from business manager Barbara Creel, Schmitz finally went to the business office and filled out eight months' time sheets all at oncewithout referring to any notes or a calendar. After October 2003, Schmitz continually failed to submit her time sheets on time. When Schmitz did submit her time sheets, many of them were false, as shown by comparing them with information from her credit card statements for the same time periods. For example, Schmitz reported time for CITY Program work on days when she was attending legislative conferences across the country, in San Francisco, Forth Worth, Seattle, Charleston, and St. Petersburg. Schmitz did this even though she had received a letter from the Examiner of Public Accounts the day before she started the CITY Program job stating specifically that she could not claim time for the CITY Program when she was also fulfilling her legislative duties. Schmitz testified at trial that she did not consider the legislative conferences to be part of her legislative duties because they were outside of the legislative session. Schmitz also reported time for CITY Program work when she was attending a Democratic Leadership Conference in Phoenix; when she was at a Wine Association conference in Destin, Florida; and when she was working on her beach house in Panama City Beach, Florida. Schmitz's explanation at trial for submitting false time sheets was that Barbara Creel, the business manager, instructed her to record eight hours of work every day, even if she did not actually work those hours. Creel denied telling Schmitz this. Schmitz also reported eight hours of CITY Program work for each day from May 17 through May 19, 2005, even though she was attending a tourism conference in Orange Beach, Alabama hosted by the Gulf United Metropolitan Business Organization (GUMBO). GUMBO paid for Schmitz and other members of the House Tourism and Travel Committee to attend a conference that featured tourism presentations and a sunset dolphin cruise. Schmitz testified that she promoted the CITY Program during the conference, but the lobbyist who hosted the trip testified that Schmitz never spoke to him about the CITY Program. In addition to the time sheets, Schmitz was also required to submit progress reports every month. Although Schmitz testified that she submitted progress reports every month, this testimony conflicted with Palmer's testimony and his letters requesting such reports. In the reports that Schmitz submitted, she reported that in January 2006 she was soliciting ideas and suggestions from each of the program centers for development of positive public relations. She also reported that in March 2006 she had requested human-interest stories from each of the ten Program sites so that the stories could be submitted to various media outlets, and she encouraged each of the program coordinators to keep a record of positive stories that can be used in the future for publication. (Gov't Ex. 57.) Several program coordinators testified, however, that Schmitz never contacted them to discuss their ideas about public relations, never requested information for human-interest stories, and never asked them to keep records of positive news stories. One program coordinator did not even know Schmitz was the public relations person for the CITY Program. Schmitz's trial testimony about several representations on her progress reports directly conflicted with the testimony of other witnesses. First, in January 2006, Schmitz specifically reported that she met with Pam Huff, a television news producer in Birmingham, about the CITY Program. But Huff testified that she never spoke with Schmitz about the Program. Second, Schmitz testified that she met with Kathy Sawyer, the former Commissioner of the Department of Mental Health, and mentioned the CITY Program often. But Sawyer testified that she never spoke to Schmitz about the Program. Third, Schmitz testified that she met with Page Walley, the former Commissioner of the Department of Human Resources, to discuss the CITY Program. But Walley testified that he never spoke with Schmitz about the Program. Finally, in her June 2006 progress report, Schmitz represented that she had contacted the presidents of the two-year colleges to discuss the CITY Program and to request their support. And, at trial, Schmitz specifically recalled meeting with Dr. Marilyn Beck, the president of Calhoun Community College. But Dr. Beck did not recall ever discussing the CITY Program with Schmitz.

In January 2008, the grand jury indicted Schmitz. Counts One through Four charge that she committed mail fraud in violation of 18 U.S.C. § 1341. Her scheme to defraud involved her taking around $177,251.82 in salary and other benefits from the CITY Program, a federally-funded program for at-risk youth, even though she performed little or no work for the program, generated virtually no services or work product, and rarely appeared for work at the CITY Program offices. To accomplish this scheme, the indictment alleges that Schmitz obtained authorization to perform her job based on a flexible work schedule. The indictment further alleges that, in order to conceal her fraudulent scheme, she prepared and submitted false and fraudulent statements regarding the number of hours she worked and the volume and nature of her services. The indictment finally alleges that Schmitz used the mails on four separate occasions in furtherance of this scheme: she received a letter of appointment to the CITY Program position on January 16, 2003 from then-director Ed Earnest (Count One); she wrote a letter to her supervisor, Dr. Cornell, requesting a flexible work schedule (Count Two); she wrote a letter to Larry Palmer, another then-director of the CITY Program, explaining why she had not filled out progress reports and updating him on the work that she had performed (Count Three); and she wrote a letter to Roscoe Lane, yet another then-director of the City Program, regarding his appointment of her to fill a counseling vacancy so that her work could be more closely monitored. Counts Five through Eight charge Schmitz with theft concerning a program receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(A). [3] The indictment alleges that Schmitz was an agent of the CITY Program, and that the CITY Program was an organization that received federal benefits in excess of $10,000 per year. The indictment further alleges that Schmitz knowingly and willfully did embezzle, steal, obtain by fraud and without authority convert to her own use, and intentionally misapply the salary she received over four years from working for the CITY Program. (Dkt. 1 at 5-6.)
Schmitz filed a motion for a bill of particulars, seeking more specific information regarding the charged scheme to defraud. She then filed a motion to dismiss the indictment, arguing that all counts were insufficiently specific. As to the mail-fraud counts, she argued that they did not include a statement of facts and circumstances so as to reasonably inform her of the scheme to defraud. As to the federal-funds counts, she argued that the allegations of fraud in those counts were insufficient because they too did not include a statement of facts, and did not incorporate any of the allegations of fraud in the mail-fraud counts. Schmitz also moved to dismiss the federal-funds counts based on the bona fide salary exception in § 666(c). The magistrate judge recommended denial of Schmitz's motion to dismiss the indictment, finding that the indictment sufficiently charged both mail fraud and theft concerning a program receiving federal funds. The district court adopted the magistrate judge's recommendation. With respect to Schmitz's motion for a bill of particulars, the magistrate judge required the Government to explain upon what basis it has concluded that Ms. Schmitz obtained her position through illegitimate means and the relationship between that claim and the mail fraud counts. (Dkt. 72 at 5.) In its bill of particulars, the Government explained that Schmitz utilized her status as a legislator to request and receive preferential treatment in obtaining a position with the CITY Program. (Dkt. 75 at 1.) The Government further explained that Schmitzwith the assistance of the Speaker of the Alabama House of Representatives, the Chancellor of the Department of Postsecondary Education, and an influential lobbyistobtained a position that did not exist before and for which no other applicants were considered. The Government finally explained that the illegitimate means Schmitz employed to obtain her position were related to the mail-fraud charges because they illuminate[d] [her] fraudulent intent, for her unusual action[s] serve[d] to demonstrate that she never intended to actually perform any work in her role as a CITY Program employee. ( Id. at 2-3.)
The case ultimately proceeded to a nine-day trial. At the close of the Government's case-in-chief, Schmitz moved for a judgment of acquittal under Fed.R.Crim.P. 29, and the district court denied the motion. Schmitz then presented testimony from twenty-four witnesses, and ultimately testified in her own defense. During her cross examination, the prosecutor asked Schmitz, on several occasions, to provide the names of people who could corroborate the work that she performed for the CITY Program. In addition, the prosecutor, after pointing out that Schmitz's testimony conflicted with the testimony of other Government witnesses, asked Schmitz if those witnesses were lying. Each time Schmitz attempted to explain the discrepancy in testimony, the prosecutor repeatedly questioned her until she was forced to say whether a previous witness was lying. At the close of all the evidence, Schmitz renewed her motion for a judgment of acquittal. The district court denied that motion. During the prosecutor's closing argument, he referred to the evidence developed during Schmitz's cross-examination. In particular, he commented several times as to how long the list of liars must be if Schmitz's testimony were true. He also commented on Schmitz's failure to corroborate her contention that she did various tasks for the CITY Program, pointing out that she had the same subpoena power as the Government to bring in witnesses to corroborate her story. The jury acquitted Schmitz on one of the mail-fraud counts (Count One), and convicted on all other counts. [4] The district court sentenced Schmitz to thirty months of imprisonment on each count of conviction, to run concurrently, for a total of thirty months. The district court also ordered restitution and forfeiture in the amount of $177,251.82.