Opinion ID: 1032017
Heading Depth: 3
Heading Rank: 2

Heading: Count III: Bribery

Text: The quid pro quo alleged here is simple. White Eagle, as BIA Superintendent, helped Greybull cover up her fraudulent scheme; in exchange Greybull helped her obtain a favorable loan modification. The government was required to prove that: (1) White Eagle “was a public official;” (2) she received UNITED STATES V . WHITE EAGLE 13 “[some]thing of value . . . in return for . . . being induced to do or omit to do an[] act in violation of [her] official duty;” and (3) she acted “corruptly”—that is, with the “intent to be influenced to perform an act” that violated her official duty.” See 18 U.S.C. § 201(b)(2)(C); United States v. Leyva, 282 F.3d 623, 625-626 (9th Cir. 2002). White Eagle does not challenge her status as a public official. Instead, she argues that she received nothing of value because Greybull’s assistance with the loan modification was unnecessary and that she did not act corruptly because her actions could not have affected the OIG’s investigation. White Eagle also challenges the sufficiency of the indictment, which alleges that agreement and payment took place after she sent the letter to Menz. The evidence is consistent with bribery, and surely sufficient under Jackson v. Virginia. 443 U.S. at 319 (evidence is sufficient if “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt”) (emphasis in original). Upon hearing of Menz’s concerns, White Eagle conducted almost no investigation into whether Menz’s loans were actually paid, and did not report the issue to her superior. Instead, on December 12, 2007, she wrote a letter to Menz on BIA letterhead falsely assuring her that the loans had been paid off and that they had only erroneously been listed under Menz’s name. Only one day earlier, White Eagle had applied for the $15,000 loan modification. The modification appears to have issued on irregular and favorable terms: it included improved repayment provisions, and the documentation did not include a pledge of trust assets as was normally required. Greybull, whose signature appeared on the application, fast-tracked the loan and prevailed upon the Credit Program to release a hold 14 UNITED STATES V . WHITE EAGLE on White Eagle’s account that arose after a borrower for whom White Eagle had co-signed defaulted on a loan. A rational jury could easily infer a quid pro quo from these facts, concluding that White Eagle wrote Menz a letter to alleviate her concerns and turned a blind eye to the nominee borrower scheme in exchange for Greybull’s later assistance in securing a quick and favorable loan modification. Although the loan modification might well have issued without Greybull’s involvement, the jury was entitled to find that her assistance was “something of value,” particularly given the favorable terms. White Eagle also argues that she took no corrupt actions because her letter to Menz could not have affected the OIG’s response to Menz’s complaint. In doing so, she misconstrues the import of the letter—transmitting the letter was corrupt regardless of its impact, as success is not an element of the offense. Moreover, White Eagle failed to report the obviously illegal nominee borrower scheme. See United States v. Birdsall, 233 U.S. 223, 231 (1914) (adopting, for bribery purposes, a broad definition of official acts and noting that “[t]o constitute . . . official action, it was not necessary that [the conduct] be prescribed by statute”); O’Campo v. Hardisty, 262 F.2d 621, 624 (9th Cir. 1958) (same). The jury had ample evidence to conclude that White Eagle’s actions were “corrupt.” White Eagle argues that “[a] person cannot be bribed for a past act” and urges us to reject the indictment because it states that White Eagle agreed to the scheme and accepted the payment in January 2008, after she sent the letter to Menz. But the indictment sets no dates in stone. While Count III states that White Eagle agreed to the scheme and received the UNITED STATES V . WHITE EAGLE 15 loan modification “on or around” January 2, 2008, the evidence in the record is consistent with an agreement between White Eagle and Greybull that predated the December letter to Menz. Moreover, any challenge to the sufficiency of Count III of the indictment is misplaced regardless of any imprecision as to timing. The indictment tracks the language of the bribery statute, contains the elements of the offense, and specifies which of White Eagle’s actions violated the law, thus allowing her to avoid another prosecution on the same actions. See Hamling v. United States, 418 U.S. 87, 117 (1974); United States v. Milovanovic, 678 F.3d 713, 727 (9th Cir. 2012). We affirm White Eagle’s conviction under Count III. C. Count IV: Falsification, Concealment, or Covering Up of a Material Fact The district court properly instructed the jury that a conviction under 18 U.S.C. § 1001(a)(1) requires that: (1) the defendant had a duty to disclose material information, (2) the defendant falsified, concealed, or covered up such a fact by trick, scheme, or fraud, (3) the falsified, concealed, or covered up fact was material, (4) the falsification and/or concealment was knowing and willful, and (5) the material fact was within the jurisdiction of the Executive Branch. See United States v. Varbel, 780 F.2d 758, 762 (9th Cir. 1986) (indictment alleging concealment in violation of 18 U.S.C. § 1001 failed where there was no duty to disclose); see also United States v. Moore, 446 F.3d 671, 677 (7th Cir. 2006). White Eagle challenges the legal sufficiency of her duty to report Greybull’s fraud and claims that she did report the fraud to Darryl LaCounte, the BIA Deputy Regional Director. 16 UNITED STATES V . WHITE EAGLE White Eagle’s claim that she reported the fraudulent scheme does not withstand scrutiny. She argues only that she told LaCounte that Greybull’s husband had paid the balance of a loan for one of Greybull’s relatives. This hardly counts as an actual “report” alerting LaCounte to the fraudulent activity. LaCounte’s testimony also contradicts White Eagle’s claim that she reported the fraud. He recalled discussing Greybull’s husband’s payment with White Eagle, but did not remember hearing about Greybull’s fraud. LaCounte also testified that he would have reacted to any report regarding fraudulently obtained loans—but he did not investigate or take any actions. The jury was entitled to reject White Eagle’s account and credit LaCounte’s testimony. We cannot overturn its credibility determinations. See United States v. Yossunthorn, 167 F.3d 1267, 1270 (9th Cir. 1999) (noting that a jury’s credibility finding cannot be reviewed on appeal). We therefore focus our analysis on whether White Eagle’s failure to report Greybull’s fraud can support a conviction for concealment under 18 U.S.C. § 1001(a)(1). White Eagle, like all government employees, had a duty to “disclose waste, fraud, abuse, and corruption to appropriate authorities,” codified in the Code of Federal Regulations as a “[b]asic obligation of public service.” See 5 C.F.R. § 2635.101(b)(11). It is not disputed that White Eagle violated this fundamental rule. However, she is not charged with breaching the public trust or failing to perform her duties as a public servant or government employee. Instead, she is charged with fraudulent concealment, a narrower offense under the umbrella of “Fraud and False Statements.” 18 U.S.C. ch. 47. Because failing to report fraud in violation of generally applicable ethical principles is not equivalent to UNITED STATES V . WHITE EAGLE 17 a “false statement,” the facts do not support a conviction under § 1001(a)(1).1 As other circuits have recognized, a conviction under § 1001(a)(1) is proper where a statute or government regulation requires the defendant to disclose specific information to a particular person or entity. See United States v. Tobon-Builes, 706 F.2d 1092, 1096 (11th Cir. 1983). So, for example, when a defendant submits a report that omits particular information that by law must appear in the report, a conviction for concealment is proper. See United States v. Muntain, 610 F.2d 964, 971–72 (D.C. Cir. 1979). The same holds true when a defendant responds to specific questions on a particular topic. See United States v. Stewart, 433 F.3d 273, 318 (2d Cir. 2006) (holding that SEC investigator’s specific questions regarding another individual’s stock trades created a duty to disclose information about those trades). In these situations, the defendant’s silence is akin to an affirmative misrepresentation, and therefore logically falls within the scope of § 1001’s prohibition on false and fraudulent statements. See United States v. Mubayyid, 658 F.3d 35, 70-71 (1st Cir. 2011) (“[B]y filing the false Form 990s, which he signed under penalty of perjury, Mubayyid did not passively fail to disclose material facts; he engaged in an affirmative act of concealment. . . . His conduct is therefore sufficient grounds for a conviction under § 1001(a)(1).”) (citation omitted). Similarly, if a financial institution fails to report particular transactions as required by law, its silence is effectively a statement that no such transactions took place. Cf. United States v. Puerto, 730 F.2d 1 W hite Eagle’s failure to report Greybull’s felony was charged in Count VI (misprision of a felony) and was not a part of this Count. 18 UNITED STATES V . WHITE EAGLE 627, 633 (11th Cir. 1984) (holding that a defendant is guilty of concealment of a material fact when he causes either an inaccurate currency transaction report or no currency transaction report to be sent to the Internal Revenue Service). We can identify no analogous “silent statement” by White Eagle. It is true that White Eagle concealed Greybull’s loans by writing a false letter to Menz claiming that the loans had been paid off and by inducing Greybull’s husband to pay the loan balances with life insurance proceeds. However, neither act involved an affirmative false or misleading statement to the government. The government argues that White Eagle further concealed the fraud by informing LaCounte that Greybull’s nominee loans had been paid off, but not telling him that they had been fraudulently obtained in the first place. But that incomplete report—while misleading—did not contravene a specific reporting duty. White Eagle’s partial disclosure made no representation, explicit or implicit, as to the existence of fraud in the Credit Program. Her acts may be improper and unethical, but they are not sufficient for a concealment conviction under § 1001(a)(1). The D.C. Circuit’s treatment of an analogous issue in United States v. Safavian, 528 F.3d 957 (D.C. Cir. 2008), is instructive. The court overturned a conviction under § 1001(a)(1) that, like here, arose out of an alleged violation of 5 C.F.R. § 2635.101(b)(11). Id. at 959. The defendant, a GSA employee, sought ethical advice about participating in golf trip sponsored by Jack Abramoff, but did not disclose Abramoff’s business before the GSA in his request for the ethics opinion. Id. at 960. The government argued that the defendant’s omission of this relevant detail breached his duty to disclose under the regulation and other ethical principles. Id. at 964. The court acknowledged the ethics rules required UNITED STATES V . WHITE EAGLE 19 disclosure relating to corruption, but found that the relationship between those requirements and the duty to report under § 1001(a)(1) was “tenuous at best.” Id. It noted that there was “no indication of the particular facts or information” that should be disclosed, and that the regulation contained no indication that it applied to the defendant’s conduct. Id. at 965. It reversed the conviction under § 1001(a)(1) because there was no duty to disclose. Id. The same reasoning applies here. Although the regulation discusses reporting “fraud” and “corruption,” 5 C.F.R. § 2635.101(b)(11), it does not provide specifics on what kind of information should be reported or to whom. Nor does it discuss criminal liability for failure to abide by its provisions. See Safavian, 528 F.3d at 964 (Under the Fifth Amendment, “the defendant must have ‘fair notice . . . of what conduct is forbidden. . . . [T]his “fair warning” requirement prohibits application of a criminal statute to a defendant unless it was reasonably clear at the time of the alleged action that defendant[‘s] actions were criminal.’”) (first three alterations in original) (citation omitted). Nothing in § 1001(a)(1) or the regulation indicates that a failure to report could effectively be read as a statement that no fraud was taking place. Because the government did not show that White Eagle violated a specific duty to report Credit Program fraud, we reverse her conviction as to Count IV. 20 UNITED STATES V . WHITE EAGLE D. Count V: Public Acts Affecting a Personal Financial Interest White Eagle was also indicted under 18 U.S.C. § 208(a), the basic criminal conflict of interest statute,2 based on her alleged concealment of Greybull’s fraudulent scheme. According to the government, the concealment furthered White Eagle’s own interests because she wanted the loan program to continue so that she could obtain additional future loans and ensure that she kept her job; both would be in jeopardy if the scheme was discovered. Those interests are too remote from White Eagle’s acts to sustain a conviction. Section 208(a) regulates a limited set of “particular matters,” generally arising out of discrete matters with a direct impact on the government employee’s finances. See 5 C.F.R. § 2640.103(a)(1) (listing examples that involve the award and maintenance of government contracts, specific hiring decisions, and use of a particular business’s services). Illustrative cases under § 208(a) underscore the link between the conflict and a real, rather than speculative, interest in a particular matter. See, e.g., United States v. Selby, 557 F.3d 2 Section 208(a) provides that [W ]hoever, being an officer or employee of the executive branch . . . participates personally and substantially as a Government officer or employee . . . in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to his knowledge, he . . . has a financial interest . . . [s]hall be subject to the penalties set forth in section 216 of this title. 18 U.S.C. § 208(a). UNITED STATES V . WHITE EAGLE 21 968, 975 (9th Cir. 2009) (per curiam) (employee whose husband earned commission from a software sale to the government had sufficient financial interest to sustain conviction under § 208(a) where she had actively lobbied for increased use of her husband’s software); United States v. Jewell, 827 F.2d 586, 587 (9th Cir. 1987) (financial interest requirement of § 208(a) was met where the government employee signed invoices authorizing payment to his own company); United States v. Smith, 267 F.3d 1154, 1156–57 (D.C. Cir. 2001) (referral of patients to specific mental health clinic to which defendant had loaned money was sufficient under § 208(a)). The government argued that the “particular matter” underlying this Count was White Eagle’s request that Greybull’s husband pay off Greybull’s nominee loans with the proceeds of Greybull’s life insurance. While an employee need not personally stand on either side of an underlying transaction, the link between the employee’s interest and the public act must be direct and predictable. See United States v. Lund, 853 F.2d 242, 243 (4th Cir. 1988) (applying statute to federal employee’s involvement in hiring decision involving a relative). There was no such clear link here. The connection between the payment of Greybull’s fraudulent nominee loans and White Eagle’s alleged financial interest is remote and speculative. While White Eagle’s acts directly concealed Greybull’s fraud, her own interests were further downstream. To find an effect on White Eagle’s continued employment and/or her future ability to obtain Credit Program loans, we must assume that discovery of Greybull’s fraud would have led to a wide-scale investigation, and one of two outcomes: (1) a change in policy preventing loans to BIA employees that would not 22 UNITED STATES V . WHITE EAGLE affect White Eagle unless and until she desired additional loans; or (2) the conclusion that White Eagle was at fault to a degree justifying her termination. This chain of events requires hypothesis heaped on hypothesis and is not the “close causal link” between the request to pay and the effect on the claimed financial interests. Selby, 557 F.3d at 975. Any proposed link is fraught with contingencies, particularly because Greybull’s underlying fraud was part of a longstanding scheme that long predated claimed complicity by White Eagle. See 5 C.F.R. § 2640.103(a)(3)(i) (“A particular matter will not have a direct effect on a financial interest, however, if the chain of causation is attenuated or is contingent upon the occurrence of events that are speculative.”). Accordingly, White Eagle’s financial interest in this matter was insufficient under 18 U.S.C. § 208(a). We reverse her conviction on Count V. E. Count VI: Misprision of a Felony Misprision of a felony in violation of 18 U.S.C. § 4 requires the government to establish: (1) the commission and completion of a felony by a third party, (2) the defendant’s knowledge of the felony, (3) the defendant’s failure to notify the authorities, and (4) that the defendant took an affirmative step to conceal the crime. United States v. Ciambrone, 750 F.2d 1416, 1417 (9th Cir. 1985). The crime here was Greybull’s fraudulent use of nominee borrowers. There was evidence, however, that White Eagle knew of the fraud: Christiansen told White Eagle that the loans in her name and Greybull’s son’s name actually belonged to Greybull, and that the loans needed to be paid out of Greybull’s life insurance policy. White Eagle never notified relevant authorities of Greybull’s use of nominee UNITED STATES V . WHITE EAGLE 23 borrowers, and concealed Greybull’s fraud by arranging for Greybull’s husband to pay off the long-term loans with life insurance proceeds to head off any investigation into the matter. As with the bribery charge, White Eagle argues that there was no concealment and claims that she reported the crime by notifying Darryl LaCounte, the relevant BIA official, that Greybull’s husband had paid the balance of a loan for one of Greybull’s relatives. This report was insufficient because the law requires the reporting of the “commission of a felony,” not just related acts. See 18 U.S.C. § 4 (“Whoever, having knowledge of . . . a felony . . . does not as soon as possible make known the same” may be subject to penalties.) (emphasis added). LaCounte also testified to the contrary, and the jury was entitled to reject White Eagle’s story to the extent that it conflicted with LaCounte’s. See Yossunthorn, 167 F.3d at 1270 (a jury’s credibility finding cannot be reviewed on appeal). White Eagle additionally claims that she took no affirmative step to conceal the crime because the payment of Christiansen and Greybull III’s loans did not make it any harder for the government to uncover Greybull’s fraud. However, the jury heard testimony from the tribe’s chief financial officer that her audit focused primarily on loan payments, not their origination. Because this evidence showed that paid off loans were less likely to be investigated, the jury could conclude that payment of the loans made the discovery of the fraud less likely and, therefore, that White Eagle took an affirmative step to conceal the felony. White Eagle finally argues that her conviction cannot stand because there was no underlying prosecution relating to 24 UNITED STATES V . WHITE EAGLE the long-term loans that Greybull’s husband paid and that she allegedly concealed. We have never required evidence of a prosecution or conviction for the third party’s offense as a prerequisite for a misprision conviction—only the completion of the offense. See Ciambrone, 750 F.2d at 1417 (listing commission and completion of a felony, but not conviction, as elements of the offense); United States v. King, 402 F.2d 694, 695 (9th Cir. 1968) (holding, without discussing prosecution or conviction of the principals, that sufficient evidence supported the jury’s finding that the principals committed a felony). Any other conclusion could bar prosecution in cases like this, where the third party dies or for other reasons is not charged and/or convicted before the defendant is tried. Reversal of Count VI on these grounds is not warranted, and we affirm White Eagle’s conviction on Count VI. F. White Eagle’s Fifth Amendment Defense White Eagle also argues that convictions for Counts V (public acts affecting a financial interest) and VI (misprision of a felony) would violate her Fifth Amendment right to avoid self-incrimination because each charge relied on her duty to report criminal activity that would have exposed her to prosecution. However, these convictions were based on White Eagle’s failure to report Greybull’s crimes, not her own alleged criminal activity. The connection between White Eagle’s loan modification and Greybull’s use of nominee borrowers is too remote to implicate White Eagle’s Fifth Amendment rights. White Eagle cites to persuasive authority that a misprision conviction cannot stand where the defendant’s duty to report would have furnished evidence against the defendant. UNITED STATES V . WHITE EAGLE 25 Notably, these cases arise where the defendants’ criminal activity arose out of the same transactions that constituted the felonies they were obligated to report. See King, 402 F.2d at 697 (defendant who was present at meetings of conspirators before and after bank robbery, received some proceeds from it, and helped participants leave town could not be prosecuted for failure to report robbery); United States v. Kuh, 541 F.2d 672, 677 (7th Cir. 1976) (prosecution for misprision violated Fifth Amendment because the defendant’s duty to report armored car robbery would have revealed his receipt and possession of money stolen in that same crime). In contrast, White Eagle’s liability for her allegedly criminal activity—receipt of the loan modification—was not directly connected to the criminal activity she failed to report, Greybull’s use of nominee borrowers. White Eagle’s invocation of the Fifth Amendment is insufficient because her disclosure of Greybull’s scheme would not have provided a strong enough “link in the chain of evidence needed to prosecute” her for her own misdeeds. Cf. King, 402 F.2d at 697 (Fifth Amendment protections apply where the “individual has reasonable cause to fear he might . . . be convicted” because of the information he reveals.). It is true, as White Eagle argues, that the disclosure of Greybull’s fraud might have led to an audit that might have exposed other frauds, which might in turn have implicated White Eagle. However, as the government points out, Menz’s complaint had already triggered an OIG investigation, but no extensive audit, so discovery was by no means assured even if White Eagle had reported Greybull’s activity. Because the connection between disclosure and prosecution was tenuous and speculative, no Fifth Amendment violation arises out of White Eagle’s convictions on Counts V and VI. 26 UNITED STATES V . WHITE EAGLE