Court Opinion

ID: 4014586
Source: CourtListenerOpinion
Date Created: 2016-07-11 17:01:07.21504+00
Date Added: 2024-06-11T14:29:30.447499
License: Public Domain

FILED
                                                                  United States Court of Appeals
                                      PUBLISH                             Tenth Circuit

                      UNITED STATES COURT OF APPEALS                      July 11, 2016

                                                                      Elisabeth A. Shumaker
                             FOR THE TENTH CIRCUIT                        Clerk of Court
                         _________________________________

UNITED STATES OF AMERICA,

      Plaintiff - Appellee,

v.                                                          No. 15-5055

ROGER DANA BARNETT,

      Defendant - Appellant.
                      _________________________________

                     Appeal from the United States District Court
                       for the Northern District of Oklahoma
                         (D.C. No. 4:14-CR-00119-GKF-1)
                       _________________________________

Submitted on the briefs:*

Julia L. O’Connell, Federal Public Defender, and Barry L. Derryberry, Research and
Writing Specialist, Office of the Federal Public Defender, Northern District of
Oklahoma, Tulsa, Oklahoma, for Defendant-Appellant.

Danny C. Williams, Sr., United States Attorney, and Clemon D. Ashley, Assistant United
States Attorney, Office of the United States Attorney, Northern District of
Oklahoma, Tulsa, Oklahoma, for Plaintiff-Appellee.
                        _________________________________

Before KELLY, BRISCOE, and HARTZ, Circuit Judges.
                   _________________________________

HARTZ, Circuit Judge.

*
 After examining the briefs and appellate record, this panel has determined unanimously
that oral argument would not materially assist in the determination of this appeal. See
Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted
without oral argument.
                        _________________________________

Defendant Roger Dana Barnett served as Second Chief of the Muscogee (Creek) Nation

in 2013 and 2014. One of his duties in that elected position was to make disbursements

from the Tribe’s emergency-assistance fund to tribal members who met certain

conditions. He could provide assistance with money from a petty cash fund or by using a

tribal debit card to make point-of-sale purchases or to make withdrawals from ATM

machines. He pleaded guilty in the United States District Court for the Northern District

of Oklahoma to embezzling funds from the Tribe by appropriating to his own use money

withdrawn from ATM machines. See 18 U.S.C. § 1163. The sole issue on this appeal is

whether the district court properly determined the amount of money embezzled for

purposes of calculating Defendant’s offense level and the amount he owes the Tribe in

restitution. Based on evidence recited in the probation office’s presentence report (PSR)

and an addendum to that report (the Addendum), the district court found that Defendant

embezzled all, not just some, of the money that he withdrew from ATM machines.

Defendant asserts that the court’s reliance on the PSR and the Addendum was improper

because the government failed to present at sentencing any evidence of the amount of

loss. We disagree. The court could properly rely on the PSR and Addendum because

Defendant did not adequately challenge their recitations of the evidence concerning his

defalcations. The only issue that he preserved for appeal was whether the recited

evidence sufficed to support the court’s determination of the amount of loss, and we hold

that the evidence was sufficient. We therefore affirm Defendant’s sentence. Our

jurisdiction arises under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.

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       After summarizing the description of Defendant’s conduct in the PSR and

Addendum, we discuss the law governing objections to a PSR, set forth Defendant’s

objections in the district court, hold that the objections to the factual recitations were

inadequate, and conclude by holding that the unobjected-to factual recitations adequately

supported the district court’s findings.

         I.   The PSR and Addendum

       When Defendant pleaded guilty, he admitted using his tribal debit card to make

ATM withdrawals that he spent primarily on gambling. The PSR added further detail:

Applicants could obtain financial assistance from the Second Chief only after completing

a form that documented tribal membership, denial of assistance from other sources, and

proof of income and need. Recipients were to provide receipts to document expenditures

of emergency funds. To provide assistance, Defendant could use a tribal debit card

issued to him for both point-of-sale transactions and ATM withdrawals. He also could

use a petty-cash fund.

       From April 3, 2013, through April 29, 2014, Defendant embezzled money from

the emergency fund, using it for such things as gambling, purchasing goods, and gifts to

others. To obtain the money, he used the tribal debit card to make ATM withdrawals at

various casinos and other businesses. He provided no receipts for the ATM withdrawals

or documentation of their purposes despite multiple requests from the Tribe.

       When Defendant’s expenditures eventually exhausted the emergency fund, he

requested additional money. The Tribe conducted an audit and notified the Federal

Bureau of Investigation of the apparent embezzlement. The PSR calculated the total

                                               3
amount of Defendant’s misappropriation from the Tribe as $211,880.76, which included

all the ATM withdrawals.

       Later the probation office filed the Addendum to the PSR. It described

Defendant’s duties before disbursing funds and the Tribe’s documentation requirements:

               Although defendant was not required to obtain signed receipts from
       those to whom he provided financial assistance, he was required to verify
       tribal membership, denial of assistance from other resources, and proof of
       income and need, as stated in the request form for emergency assistance
       held by his office, which was revised May 14, 2013, one month after the
       instant offense began. Persons receiving assistance were to provide
       receipts to the Second Chief’s Office following expenditure of any
       disbursements.

R., Vol. III at 15. Nevertheless, said the PSR:

       Defendant did not follow this policy when accessing funds through ATM
       withdrawals. The evidence shows that between April 2013, and April
       2014, defendant made ATM withdrawals several times each week of
       various amounts, usually between $200 and $800, with the majority of the
       withdrawals coming from casino ATM machines. Defendant kept no
       receipts or documentation of the purpose for the withdrawals and admitted
       that he used much of the funds to gamble and provide to others to gamble.

Id.

       According to the Addendum, this lack of documentation (despite repeated requests

by the Tribe’s accountant) was contrary to Defendant’s practice when providing

assistance using other methods of payment, and the use of the ATMs was also remarkable

because petty cash often would have been available if cash assistance was needed:

       [T]here were legitimate purchases and expenditures made by defendant
       utilizing the debit card for point of sale purchases, for which defendant did
       fill out the required credit card form. In addition, most of the ATM
       withdrawals occurred during normal business hours when defendant had
       access to the petty cash fund established for use by his office, minimizing
       the need for use of the debit card to make ATM cash withdrawals.

                                             4
       Defendant did at times utilize the petty cash fund as authorized for
       legitimate disbursements and completed the required documentation. As to
       the ATM cash withdrawals; however, no documentation was ever
       completed by defendant nor was any receipt ever returned by a recipient,
       despite numerous emails to defendant’s office sent by [the] Muscogee
       Creek Nation Staff Accountant, requesting such receipts, to which
       defendant replied he would comply and never did.

Id. The Addendum concluded that the loss equaled the total amount of ATM

withdrawals, despite letters supporting Defendant from members of the Tribe, who did

not provide sufficient detail to be helpful:

               The evidence suggests that defendant complied with tribal
       documentation policies for most expenditures other than ATM cash
       withdrawals. Defendant has provided no evidence to support his contention
       that the amount of loss calculated in the presentence report based upon the
       cash withdrawn from ATMs belonging to the Muscogee (Creek) Nation
       should not be included . . . . Although five tribal members have provided
       letters stating that they have received emergency assistance from defendant,
       no receipts, dates, or amounts have been given and no proof exists that the
       assistance given to those five parties has not already been omitted from the
       loss amount as part of the legitimate expenditures made by point of sale
       purchases or petty cash disbursements that were documented by defendant.

Id.

        II.   Necessity of Objections to the PSR

       Fed. R. Crim. P. 32(i)(3) governs the district court’s use of a PSR in establishing

the facts relevant to sentencing. In pertinent part it states:

       At sentencing, the court:
              (A) may accept any undisputed portion of the presentence report as a
              finding of fact; [and]
              (B) must—for any disputed portion of the presentence report or
              other controverted matter—rule on the dispute or determine that a
              ruling is unnecessary either because the matter will not affect
              sentencing, or because the court will not consider the matter in
              sentencing . . . .

                                               5
In light of this rule, we have said that “[a]t sentencing, the district court may rely on facts

stated in the presentence report unless the defendant has objected to them. When a

defendant objects to a fact in a presentence report, the government must prove that fact at

a sentencing hearing by a preponderance of the evidence.” United States v. Harrison,

743 F.3d 760, 763 (10th Cir. 2014) (internal quotation marks omitted).

       But what constitutes an adequate objection to a recitation in the PSR? A

defendant must do more than simply state that he objects to the PSR’s bottom line. “[T]o

invoke the district court’s Rule 32 fact-finding obligation, the defendant is required to

make specific allegations of factual inaccuracy.” United States v. Chee, 514 F.3d 1106,

1115 (10th Cir. 2008) (emphasis added) (internal quotation marks omitted). “An

objection to the ultimate conclusions in the presentence report does not necessarily imply

that a ‘controverted matter’ exists.” Id. Rather, the defendant has “an affirmative duty to

make a showing that the information in the presentence report was unreliable and

articulate the reasons why the facts contained therein were untrue or inaccurate.” Id.

(brackets and internal quotation marks omitted); see United States v. Rodriguez-Delma,

456 F.3d 1246, 1253–54 (10th Cir. 2006) (district court’s fact-finding obligation was not

triggered by a sentence-enhancement objection that did not contest the facts supporting

the enhancement).

       III.   Insufficiency of Defendant’s Objections to the PSR and Addendum

       Defendant did not satisfy the above requirements. Our review of the record shows

that he objected to the PSR’s conclusions but not the underlying facts.

                                               6
      Defendant responded to the initial PSR in three ways. First, he submitted an

expert report prepared by former IRS agent Larry Cotton. It primarily relied on a civil

tax case containing a short paragraph on constructive dividends—a case not relied on by

Defendant on appeal. It also raised an issue about what documentation was required by

the emergency-assistance program. But the district court then requested more

information on the program’s requirements, and, as we shall see, Defendant never

challenged what the probation office set forth in its Addendum.1

      Second, Defendant submitted letters from five tribal members who said that they

received emergency assistance from him, although they did not provide receipts or

otherwise describe when they received the assistance or how much they received.

1
  We quote the summary of the report that appears in the Addendum to establish that the
report did not raise any challenge to the evidence ultimately set forth in the PSR and
Addendum (the expert report is not itself in the record):
       Cotton argues that defendant was not required to obtain a signed receipt
       from tribal members to whom he legitimately gave financial assistance.
       Therefore, he contends that the loss amount should be calculated similarly
       to an income tax examination of a “C” corporation where certain expenses
       paid and deducted by the corporation without a receipt are disallowed to the
       corporation but not considered a constructive dividend, or income, to the
       majority shareholder. Defendant cites Erickson v. Commissioner, 598 F.2d
525, 531 (9th Cir. 1979), in support of his argument. Thus, as the total loss
       amount calculated in the presentence report of $211,880.79, is mostly
       derived from numerous ATM withdrawals made by the defendant at casino
       and non-casino ATMs, Cotton opines that 20% of the total withdrawals
       made at the three non-casino ATMs ($81,702.60), should be deducted from
       the loss amount. A 20% reduction from $81,702.60 is $16,340.52.
       Therefore, when subtracted from the currently calculated loss amount of
       $211,880.79, the resulting loss amount would be $195,540.27.
R., Vol. III at 14.

                                            7
          Third, Defendant submitted a sentencing memorandum in support of his objection

to the loss calculation and an unrelated matter. His paragraph on the calculated loss

stated:

                  The Government now appears to be relying on [Defendant’s] failure
          to comply with tribal policy for his office to maintain its position regarding
          the loss amount. That [Defendant] failed to comply with this policy
          regarding emergency assistance by not submitting the required
          documentation, now translates into a factor in the loss equation. The
          Government asks this Court to assume that all ATM withdrawals were
          utilized for personal use. That he gambled at various casinos with tribal
          funds is not questioned; however, the Government cannot meet its burden
          to prove by a preponderance of the evidence, that the entire sum withdrawn
          from the ATMs’ was for [Defendant’s] personal use.

R., Vol. I at 16. The memorandum did not dispute the accuracy of the evidence in the

PSR and Addendum—the amount of money withdrawn and the absence of

documentation—but only the inferences to be drawn from that evidence.

          After these submissions by Defendant, the probation office prepared the PSR

addendum, which was dated eight days before the hearing at which he was sentenced.

Counsel posed no new objections to its content. The following exchange occurred at the

outset of the hearing:

          THE COURT: . . . [H]ave you had a full, fair, and complete opportunity to
          discuss the contents of that presentence investigation report with Mr.
          Brunton as your attorney?
          THE DEFENDANT: Yes, sir.
          THE COURT: . . . I know we do have one objection here to the sentencing
          guidelines in the presentence investigation report. Are there any others?
          MS. COZZONI [the prosecutor]: Not that I’m aware of, Your Honor.
          MR. BRUNTON [defense counsel]: No, sir.
          THE COURT: All right. And with regard to that objection, Mr. Brunton,
          anything other than what you’ve raised in the papers?
          MR. BRUNTON: No, sir.

                                                8
R., Vol. II at 54–55. The court overruled Defendant’s objection. It said that

disbursements made by point-of-sale transactions and petty-cash outlays were supported

by the required documentation, but that none of the ATM withdrawals were. The court

discounted the letters from tribal members describing emergency assistance from

Defendant because the assistance given to them could have been part of the point-of-sale

transactions or from the petty-cash fund. It also relied on Defendant’s admission to using

the funds to gamble, make personal purchases, and give to others. And it noted that

Defendant did not need to make ATM withdrawals during business hours, when he could

access the petty-cash fund. It included as loss all ATM withdrawals. The following

exchange with counsel then took place:

       THE COURT: Are there any objections to those findings?
       MS. COZZONI: No, Your Honor.
       THE COURT: Mr. Brunton?
       MR. BRUNTON: Other than what I’ve already previously filed, Judge.

R., Vol. II at 63.

       Thus, Defendant did not “make specific allegations of factual inaccuracy” in the

PSR or PSR addendum. Chee, 514 F.3d at 1115. He did not dispute any of the facts

underlying the total-loss finding, including the amounts withdrawn and the times of the

withdrawals, his access to the petty-cash fund, the documentation required of both him

and third parties (as set forth in the PSR Addendum), his compliance with these

requirements when making other disbursements, and the failure of third parties to provide

documentation of expenditures that he attributed to the ATM withdrawals. The

sentencing court could therefore properly rely on those facts. The only objection that

                                            9
Defendant adequately preserved was that the facts set forth in the PSR and PSR

Addendum did not support the court’s conclusion regarding the amount of loss. We now

turn to that objection.

       IV.    Sufficiency of the Evidence

        “The Government bears the burden of proving loss by a preponderance of the

evidence.” United States v. Griffith, 584 F.3d 1004, 1011 (10th Cir. 2009). We review

the district court’s findings for clear error. See United States v. Mullins, 613 F.3d 1273,

1292 (10th Cir. 2010). In overruling Defendant’s objection to the loss amount, the

district court reasoned:

               Based upon the totality of the factors in this case, including the fact
       that the defendant properly documented expenditures in cases other than
       ATM cash withdrawals, that the defendant admitted he used the funds to
       gamble or make personal purchases or gave funds to others to gamble, the
       fact that no one person alleged by defendant to have received benefits from
       the ATM withdrawals has provided a receipt, and that defendant had access
       to petty cash in his office and did not need to make ATM withdrawals
       during business hours, the court includes all ATM cash withdrawals made
       by the defendant for which no documentation has been provided in the
       court’s determination of loss and finds . . . the inclusion of such
       withdrawals to be reasonable.

R., Vol. II at 62. We think this view of the evidence was eminently reasonable. In an

unpublished opinion in similar circumstances we upheld a sentencing determination. See

United States v. Sankey, 430 F. App’x 669, 673–74 (10th Cir. 2011) (defendant handled

tribal funds in a manner that made them untraceable—by cashing cashier’s checks

payable to the tribe—and circumvented tribal policies meant to prevent

misappropriation). The district court did not commit clear error.

                                             10
       Defendant raises an additional challenge to the restitution award. He contends that

the government failed to comply with the statutory requirement that the probation office

provide “to the extent practicable, a complete accounting of the losses to each victim.”

18 U.S.C. § 3664(a) (1996); see United States v. Ferdman, 779 F.3d 1129, 1133 (10th

Cir. 2015) (sentencing court cannot “dispense with the necessity of proof . . . and simply

‘rubber stamp’ a victim’s claim of loss based upon a measure of value unsupported by the

evidence”). We reject the argument. The PSR provided adequate detail. There was no

need for the usual accounting to apportion the loss among the victims, because there was

only one victim here.

        V.    CONCLUSION

       We AFFIRM the district court’s sentence and judgment.

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