Opinion ID: 4536492
Heading Depth: 2
Heading Rank: 2

Heading: Titling and Indexing

Text: We hold arbitrary and capricious the Board’s decision affirming the Army CID’s titling and indexing decision. 1. Review of a titling and indexing decision is unusual, but it is called for here by several circumstances particular to this case. First, the case appears before us without a record that separately identifies whatever initial, presumably limited, body of evidence the Army CID relied on to decide to title and index Code for criminal fraud. Applicable regulations suggest that titling is akin to a threshold reason-to-believe or reasonablesuspicion standard, typically made at the very outset of an 18 investigation. As Department of Defense rules explain, “[t]itling and indexing . . . shall be done as early in the investigation as it is determined that credible information exists that the subject committed a criminal offense.” DoDI 5505.7 ¶ 6.1. The earliest determination in the record before us, however, is reflected in the July 30, 2009, Report of Investigation, in which the titling and probable cause determinations are merged. That Report was “generated to correct identifying on the subject [sic], change the offenses from U.S. Code to UCMJ, and list the offenses as founded.” Army CID, Report of Investigation - 3rd Status, at 2 (July 30, 2009) (J.A. 225). We have no record of any threshold titling and indexing determination apart from and in advance of the Report that also found probable cause, nor has the Secretary explained how we might otherwise isolate the information that was available to the investigators at the investigative threshold. In fact, we lack any distinct evidentiary record underpinning the 2009 titling, indexing, or founding decisions; this appeal came to us on the record supporting the 2011 final Report of Investigation. See Army CID, Report of Investigation - Final (Jan. 12, 2011) (J.A. 398-445). Another unusual twist in this case is that the decision appears to be having an impermissible continuing effect on Code. As conceded by the Secretary and reflected in the record, the Army appears to be relying exclusively on the challenged titling decision to seek to collect from him the value of the education that it asserts Code obtained for his children under false pretenses. Ordinarily, a titling decision is superseded and largely mooted by a finding of probable cause. Reporting an offense as “founded” reflects that investigation has “adequately substantiated” the charge, giving law enforcement “probable cause supported by corroborating evidence” to believe the crime was committed. If the investigation yields a determination of no probable cause to 19 believe that a crime was committed, the offense is reported as “unfounded.” See Army Regulation 190-45, ¶ 4-3(a); id. Glossary § II (defining “Founded offense” and “Unfounded offense”). Titling and indexing, on the other hand, “are administrative procedures and shall not connote any degree of guilt or innocence.” DoDI 5505.7 ¶ 6.5. Department of Defense policy therefore confines the use of titling and indexing to “law enforcement or security purposes” and forbids “[j]udicial or adverse administrative actions . . . against individuals or entities based solely on the fact that they have been titled or indexed due to a criminal investigation.” Id. ¶¶ 6.2, 6.5.2. Notwithstanding the prohibition against sole reliance on a titling decision as grounds for “adverse administrative actions,” counsel for the Secretary asserts that the Defense Finance and Accounting Service may continue to seek to collect from Code the cost of his three children’s year of schooling at Fort Buchanan based on the titling decision alone. See Oral Arg. Rec. 36:55-37:37 (counsel for the Secretary stating that “[t]he titling decision would still be adequate” to support the Department’s claim of entitlement to recoup tuition costs from Code), 38:36-57; see also Def. Fin. & Accounting Serv., Advisory Opinion: Department of Defense Education Activity (DoDEA) Debt Situation Involving Navy Lt Code, at 3 (Oct. 13, 2016) (J.A. 213) (“The fact that [Code] was not charged with a crime does not negate this debt to the US Government.”). The record suggests that the Department of Defense does indeed plan to continue to seek to collect in excess of $40,000 from Code based on the mere suspicion that he obtained those services by fraud. The Defense Finance and Accounting Service notified Code of the putative tuition debt only because the Army CID forwarded to the Accounting Service the Report of Investigation reflecting both the titling and probable cause determinations. See ABCMR, Record of 20 Proceedings ¶ 6 (Jan. 31, 2017) (J.A. 112). The Accounting Service did not distinguish between titling and probable cause when it insisted that it would not cancel the debt or cease efforts to recoup it unless the Army CID “overturned” its prior determination. Letter from Bridgette Chrisman, Customer Care Representative, Def. Fin. & Accounting Serv., to Christopher J. Code (Apr. 20, 2012) (J.A. 201); see also Def. Fin. & Accounting Serv., Advisory Opinion: Department of Defense Education Activity (DoDEA) Debt Situation Involving Navy Lt Code, at 1 (Oct. 13, 2016) (J.A. 211); Email from Leonard Cooley, Def. Fin. & Accounting Serv., to Maria Sanchez, Army Review Bds. Agency (May 3, 2016, 12:21 EDT) (J.A. 244); but see Memorandum from the Army CID to Director, Army Review Bds. Agency, at 1 (May 26, 2016) (J.A. 313) (stating that the Defense Finance and Accounting Service, “not CID, is the determining body responsible for recouping funds”). 2. Because of the evident continuing harm to Code from the Board’s refusal to correct the record titling and indexing him for crimes of making a false official statement and procuring services under false pretenses, we review those decisions and hold that they were arbitrary and capricious. The record of titling and indexing presented to the Board and reviewed by the district court did not credibly suggest that Code falsified the Fort Buchanan school enrollment form, nor that he did so as a ruse to get his children school access they did not deserve. We therefore cannot agree with the district court that the Board “provided a reasoned explanation of its decision that is rationally related to the evidence before it” when it held that credible information supported the Army CID’s titling and indexing determinations that Code knowingly submitted a false enrollment form, thereby committing crimes of fraud and obtaining services by false pretenses. Code, 285 F. Supp. 3d at 68. 21 The record submitted in support of titling and indexing reflects the Army CID’s determination that Code fraudulently “certified his date of departure” as July 2008 on the enrollment form, and that it rested those threshold determinations on interviews and “examination of records and military orders” showing that Code “was assigned” to his post at the Fort Buchanan Military Entrance and Processing Station (MEPS) on August 3, 2005, and “the tour at MEPS was twenty-four months.” Army CID, Report of Investigation - 3rd Status, at 3-4 (July 30, 2009) (J.A. 226-27). Investigators purported to have determined that, “[a]t the time Lt. Code signed the DoDEA Form 600 on 30 Apr 07, he knew that his P[ermanent] C[hange of] S[tation] was in June 07, and as such his dependent children were not eligible for attendance at the DOD school on [Fort] Buchanan.” Id. at 4 (J.A. 227). The Army CID’s final report likewise announced that “Code falsified documentation by registering his three children in the DDESS for a year while he was not assigned to the geographic area,” basing its inference of fraudulent intent on its conclusion that Code did so “4 days after his Permanent Change of Station (PCS)[] extension request was denied, transferring him from Puerto Rico to Kingsville, TX.” Army CID, Report of Investigation - Final, at 2 (Jan. 12, 2011) (J.A. 399). The Army CID’s investigators made a simple but consequential mistake at the outset and then compounded their error when they should have corrected course. It is apparently not unusual for a tour of duty at the Military Entrance and Processing Station to last only two years. The Army CID’s first error was to accept—apparently without checking the records—the statement of the First Sergeant at the Military Entrance and Processing Station that Code’s 2005 assignment to Fort Buchanan was due to expire in the summer of 2007. See Fla. Fraud Resident Agency, Army CID, Agent’s Investigation Report (Jan. 25, 2008) (J.A. 405). Accepting the First 22 Sergeant’s accusation, the Army CID concluded that Code was seeking at the tail end of his assignment to enroll his children in the Fort Buchanan School for an additional year—a year during which he already knew (according to the Army CID) he would no longer be assigned to Fort Buchanan. Second, failing to discern that, even without extension, Code’s then-current orders lasted until July 2008, not July 2007, the Army CID jumped to further erroneous conclusions: that Code already knew when he submitted the school enrollment form that his request for extension had been denied, and that he also knew, even before his reassignment to Texas, that he would have to leave Fort Buchanan in 2007. At the time of their initial titling and indexing decision, the Army CID investigators presumably had it within their power to verify the premise of their fraud theory. The record of the titling and indexing decisions includes Code’s official orders. It is uncontested that Code’s orders assigned him to Fort Buchanan from 2005 to 2008. The Secretary now acknowledges that official records authoritatively contradict any information that might have led the Army CID to think that Code’s assignment to Puerto Rico was for only 24 months. See Oral Arg. Rec. 16:10-38. Code never denied that the assignment was subject to change. But the Secretary also does not contest that Code’s superiors supported his application to serve out—and even slightly extend—his assignment at Fort Buchanan through August 2008, giving Code grounds for optimism that he might stay. In any event, it is clear and undisputed that no changed orders had yet issued when Code filled out the school’s application form in April 2007. Therefore, the only factually accurate way for Code to fill out the form when he did was to write “July 2008” in the blank where the form states “My current orders will expire on _______.” Suppl. DoDEA Form 600 – School Year 2007-2008 (Apr. 30, 2007) (J.A. 223). Code’s request for 23 correction of the titling decision is therefore “supported by uncontested, creditable evidence,” and the Board’s decision otherwise “defies reason and is devoid of any evidentiary support.” Haselwander, 774 F.3d at 992-93. Code has consistently acknowledged that, at the time he signed the application, he had heard that his orders were likely to be changed. Indeed, by Code’s uncontradicted account, the family informed the school’s Registrar in April that Code anticipated early reassignment elsewhere, and, after his Permanent Change of Station order came through in late May, Code contacted the Registrar again to verify the children’s eligibility. See Code Decl. ¶¶ 8-9 (J.A. 456). The Registrar assured him, Code attested, that the children could stay at the Fort Buchanan school, because “eligibility was based on my Orders at the time of enrollment.” Suppl. Code. Decl. ¶ 2 (J.A. 497). The way the application form is worded is not to the contrary. The Board did not deem Code’s account unworthy of belief for any reason, but rejected it for want of corroboration, “such as a statement from the Registrar,” which, the Board opined, “would appear to be easily obtained.” ABCMR, Record of Proceedings ¶ 4 (Aug. 12, 2014) (J.A. 364). But it is not at all apparent how Code could have obtained such a statement. Tellingly, the Army CID’s own interview of the Registrar—at which the investigator in 2008 hypothetically posed to her the “situation” involving Code’s children—failed to contradict Code’s account of his actual conversation with her in 2007. Fla. Fraud Resident Agency, Army CID, Agent’s Investigation Report (Jan. 25, 2008) (J.A. 404). If she had told Code that children are ineligible once their parent is reassigned elsewhere, or if the Codes had in fact never asked her about their children’s eligibility, one would expect the Registrar to have said so. The omission from the Army CID’s interview 24 report of any statement on the Registrar’s part regarding her actual communications—or lack thereof—with the Code family tends to corroborate Code’s declaration. C. The Alternative, Failure-to-Disenroll Theory The Secretary has fleetingly suggested that the charged offense of obtaining services under false pretenses is separately supported by Code’s action in keeping the children enrolled in school at Fort Buchanan after his Permanent Change of Station orders sent him to Texas. Oral Arg. Rec. 30:05-31:06; see also ABCMR, Record of Proceedings ¶ 19 (Jan. 31, 2017) (J.A. 141). But the only falsehood or fraud the Army CID identified was that Code submitted a school application for the 20072008 school year listing July 2008 as the date his assignment to Fort Buchanan was due to expire. The Board itself described the sole issue before it as whether to expunge records of the CID investigators’ determination that “there was credible evidence to believe [Code] fraudulently obtained education services from the government and did so by means of a false official statement.” ABCMR, Record of Proceedings ¶ 28 (Jan. 31, 2017) (J.A. 144). We cannot sustain the Board’s decision on a different ground, neither charged nor litigated in this case. As explained above, the sole falsehood anywhere in the record of the Army CID’s investigation was the statement Code made on the school application form on April 30, 2007, that his “current orders” expired on “July 2008.” In its interim and final titling decisions, the CID found that Code “falsely listed his [order expiry date] of July 2008,” Army CID, Report of Investigation - 3rd Status, at 2 (July 30, 2009) (J.A. 225), and concluded that there was “probable cause to believe Lt. Code committed the offense of False Official Statement and Larceny when he falsified documentation by registering his three 25 children in the DDESS for a year while he was not assigned to the geographic area,” Army CID, Report of Investigation - Final, at 2 (Jan. 12, 2011) (J.A. 399). Even if the Army had made, the Board upheld, and briefing preserved a charge of fraudulent failure to disenroll, a titling and indexing decision made on that theory must fail because it is unsupported by any credible information that Code acted with fraudulent intent when he persisted in sending his children to the Fort Buchanan school. This alternative theory assumes that the application itself was not fraudulent and that the children were permissibly re-registered at the Fort Buchanan school, but that Code knew that his children became ineligible once his new Permanent Change of Station orders came through yet failed at that time to withdraw them from the school. Because state of mind is what differentiates mere error from criminal fraud, a charge of fraudulent failure to withdraw could not be made without credible information that the suspect acted with fraudulent intent. See generally United States v. Project on Gov’t Oversight, 616 F.3d 544, 552 & n.9 (D.C. Cir. 2010) (collecting cases). But the Army CID never identified any credible information on which to conclude that Code knew that his children lost their school eligibility simultaneously with his change of orders, and hence that he knowingly violated an obligation to take them out of school. The Board only gets part of the way with its contention that Code’s “change of station orders taking him to Texas had the obvious effect of making him and his family ineligible for tuition-free education at the Fort Buchanan school.” ABCMR, Record of Proceedings ¶ 27 (Jan. 31, 2017) (J.A. 144). We assume that the Board is correct that, under Department of Defense policy, Code’s reassignment rendered his children ineligible. But that does not mean Code knew they were ineligible. And, contrary 26 to the Board’s characterization, the eligibility rules for children of a servicemember who moves are far from “obvious.” Id. Department of Defense law and rules tying eligibility to where the servicemember is stationed include an exception allowing “currently enrolled students” to remain throughout a school year, even after their parent-sponsor has been assigned elsewhere. The statute states that [t]he Secretary of Defense shall permit a dependent of a member of the armed forces . . . to continue enrollment in an educational program provided by the Secretary . . . for the remainder of a school year notwithstanding a change during such school year in the status of the member . . . that, except for this paragraph, would otherwise terminate the eligibility of the dependent to be enrolled in the program. 10 U.S.C. § 2164(h)(1). In similar terms, the implementing rule provides that, “[i]f the status of the sponsor of a currently enrolled student changes so that the child would no longer be eligible for enrollment,” the student’s enrollment nonetheless “may continue for the remainder of the school year.” DoDI 1342.26 ¶ 6.3.7. The record contains no credible information that Code knew no such exception applied to his children. Indeed, Code’s unrebutted declaration attests to the contrary: When Code informed the Fort Buchanan school Registrar that he had been reassigned to Texas, she assured him that the children could complete the year at the Fort Buchanan school because they had validly enrolled based on his prior assignment. See Suppl. Code Decl. ¶ 2 (J.A. 497). Even if that view misapprehends the relevant rule, as the Secretary now argues and we assume, it is entirely plausible that the Registrar so understood it when she spoke to Code. 27 Indeed, the plausibility of Code’s account of his understanding based on his exchange with the Registrar gains powerful support from the Army’s own inconsistent usage of the term “enrolled.” The Secretary now argues that children are only “enrolled” within the meaning of the currentlyenrolled-student exception once classes are underway in the corresponding school year, whereas Code was reassigned during the summer before school had resumed for the fall term, making his children ineligible to “continue enrollment” under the exception. Appellee’s Br. 42; see Oral Arg. Rec. 31:07-35. The Registrar’s post-hoc response to the hypothetical posed by the Army CID also narrowly construed enrollment to refer only to attendance while “the school year was in progress (Sep[tember] through May).” Fla. Fraud Resident Agency, Army CID, Agent’s Investigation Report (Jan. 25, 2008) (J.A. 404). But the Board and counsel for the Secretary on this appeal themselves all repeatedly used the term “enrollment” to refer to registration, without regard to whether classes were yet underway. See, e.g., Memorandum from the Army CID to Director, U.S. Army Crime Records Ctr. (Apr. 4, 2013) (J.A. 383) (“Code committed the offenses [of] False Official Statement and Larceny when he enrolled his children prior to the start of the 2007-2008 school year . . . .”); ABCMR, Record of Proceedings ¶¶ 19, 27 (Jan. 31, 2017) (J.A. 141) (noting that Code “is accused of fraudulently enrolling his children into the Fort Buchanan school”); Appellee’s Br. 9, 11; Oral Arg. Rec. 30:48-54 (“They had only been enrolled. So they hadn’t actually started school.”) (all emphases added). The Board’s and government counsel’s equation of registration and enrollment is inconsistent with the Department of Defense’s reading of its own rule, but it reinforces the plausibility of Code’s understanding, avowedly on the Registrar’s advice, that despite his reassignment his children were “enrolled” and so eligible to remain at the Fort Buchanan School under the exception for currently enrolled students. 28 Ultimately, the Secretary’s case for fraudulent failure-todisenroll rests on the “presumption of administrative regularity” the ABCMR accords official actions. 32 C.F.R. § 581.3(e)(2); see Appellee’s Br. 43-44 (citing Roberts v. United States, 741 F.3d 152, 158 (D.C. Cir. 2014)). The Secretary contends that a presumption that government personnel “properly discharge[] their official duties” establishes that, had Code or his wife called the Registrar, she necessarily would have informed them of their children’s ineligibility. Roberts, 741 F.3d at 158 (quoting 32 C.F.R. § 723.3(e)(2)); Army Board for Correction of Military Records, Record of Proceedings (Aug. 12, 2014) (J.A. 365). The Secretary reasons that Code’s affidavits cannot overcome such a presumption without “corroborating evidence”—in particular, a signed statement from the Registrar affirming Code’s own declarations that she told him his children could remain at the school through the 2007-2008 school year. Appellee’s Br. 43; see also ABCMR, Record of Proceedings ¶¶ 4, 8 (Aug. 12, 2014) (J.A. 364-65). To the contrary, once Code identified the absence of evidence supporting the Army CID’s actions, it was not his obligation to disprove fraudulent intent. Rather, the issue was that the Army investigators had never met their burden to show it—first with “credible information” for titling and indexing, and then with probable cause to deem the charge “founded.” Neither the Army CID, the Board, nor counsel for the Secretary have pointed to any evidence that Code intended to defraud the government— whether when he submitted the enrollment form accurately stating the expiration date of his current orders, or when, after his orders changed, his children continued to attend the Fort Buchanan school where they were enrolled. We reject the extraordinary position that a background presumption of regularity can alone prove criminal intent to defraud, and that a suspect’s statement to the contrary under oath cannot rebut such “proof” unless independently corroborated by the very 29 official benefiting from the presumption—especially where, as here, the administrative process does not appear to provide for any opportunity to question or obtain a statement from the official under oath. See 32 C.F.R. § 581.3(c)(2)(iii), (f).