Court Opinion

ID: 11456
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:04:53+00
Date Added: 2024-06-11T15:04:05.059197
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

                         _____________________

                              No. 96-40068
                         _____________________

     UNITED STATES OF AMERICA,

                                      Plaintiff-Appellee,

                                versus

     GREGORY BOUTTE,

                                      Defendant-Appellant.

     _______________________________________________________

        Appeal from the United States District Court for
                  the Eastern District of Texas
                          (1:94-CV-102)
    _______________________________________________________
                        February 10, 1997

Before REAVLEY, GARWOOD and BENAVIDES, Circuit Judges.

REAVLEY, Circuit Judge:*

     Gregory Boutte appeals the district court’s summary judgment

award to the government of $1,019.881 in statutory damages and

fines for twenty-three violations of the False Claims Act.    31

U.S.C. § 3729, et seq.     Boutte was charged with submitting false

and fraudulent claims to an agency of the U.S. Department of

Commerce to fund his Triplex Minority Business Development Center

(Triplex).   In an earlier 1992 criminal proceeding, Boutte was

tried and convicted for these same offenses.     He was sentenced to

     *
        Pursuant to Local Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in Local Rule
47.5.4.
41 months in prison and ordered to pay $150,813.75, exactly half

of $301,627.50, the amount the district court determined had been

the government’s loss.     United States v. Boutte, 907 F.Supp. 239

(E.D.Tex. 1995), aff’d 13 F.3d. 855 (5th Cir. 1994), cert.

denied,    115 S.Ct. 71 (1994).

     Defendant contends that these subsequent civil charges are

barred by the Double Jeopardy Clause of the Constitution.    He

further argues that under Halper1 the recovery sought is barred

as punitive because the Government has not made a showing of what

amount of recovery would make it whole.    Because we find that the

fines were not grossly disproportionate to the government’s loss,

we affirm.

     In its summary judgment award, the district court set

damages at $1,018,881.    This amount represents the statutorily

authorized sum of treble the Government’s loss, determined in the

1992 criminal proceeding to be $301,627, and a $5,000 fine for

each of the 23 counts of the False Claims Act for which Boutte

was convicted. [(3 x $301,627) + (23 x $5,000) = $1,018,881].

The criminal court’s finding that the Government’s loss was

$301,627 is prima facie proof of that fact.    Under the provisions

of the False Claims Act, Boutte is liable for civil penalties of

between $5,000 and $10,000 per violation, plus three times the

amount of damages sustained by the Government because of his

acts.    31 U.S.C. § 3729(a), et seq.

     1
          United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892
(1989).

                                  2
     The Government correctly asserts, and the court below

agreed, that Boutte is collaterally estopped from challenging the

facts underlying the 23 counts for which he has already been

convicted.   The Government is not required to reprove the same

facts especially when, as here, a lower standard of proof applies

to the civil violations under the False Claims Act.   31 U.S.C. §

3731(d).

     Boutte’s contention that only five of the twenty-three

counts charged subject him to statutory fines under the False

Claims Act is unsupported by the record.   The convictions on

Counts 1-5 for wire fraud establish that defendant fraudulently

caused wire transfers of government funds to Triplex for payment

of non-Triplex employees who were working on Boutte’s private

accounting business.2

     The criminal convictions on Counts 11-23 were predicated on

a finding that the listed quarterly reports falsely stated the

amount of work done by Triplex, and the convictions on all counts

were predicated on the scheme to defraud the Government and

obtain payments to which the defendant was not entitled.   In

finding Boutte guilty for violations of §1001, the jury found him

to have overstated the assistance his center provided to minority

businesses, thus making it appear that he had met the

requirements to obtain and continue receiving program funds.

     2
          Convictions under the wire fraud statute cover wire
transmissions for the purpose of executing “any scheme or
artifice to defraud, or for obtaining money or property by means
of false or fraudulent pretenses, representations, or
promises...” 18 U.S.C. § 1343.

                                 3
Each of the thirteen quarterly reports listed in Counts 11-23

falsely stated the amount of reimbursable work done by Triplex.

In the criminal trial, two Government witnesses testified that

these reports were heavily relied on by the Government in

deciding to fund Triplex.

     While a prior criminal conviction for a §1001 violation

might not, without more, collaterally estop a defendant in a

subsequent civil suit under the False Claims Act, in the instant

case the court correctly held on summary judgment that the False

Claims Act applied to all counts.    The criminal indictment

alleged that the false statements were part of a scheme to

defraud the government, and were submitted in order to ensure

continued federal funding, and there was uncontradicted

testimony that the false statements were relied on by the

Government in deciding whether to fund defendant’s program.    In

addition to the facts underlying the convictions, the evidence of

payment to Boutte based on his false statements support the

summary judgement.

     There being no contrary evidence by defendant as to the

earlier determination of the government’s losses at $301,627, the

record presents no genuine issue of any material fact.    Summary

judgment is, therefore, warranted.    See Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348,

1356 (1986).

     To satisfy the rule in Halper and not implicate the Double

Jeopardy Clause, civil remedies must constitute a “mere penalty”

                                4
and not punishment.   The purpose of civil damages is to make the

Government whole, not to function as a “deterrent or

retribution.”    Halper, 490 U.S. at 449, 109 S.Ct. at 1902 (1989).

Thus, the issue on appeal is whether the civil award bears a

rational relationship to the government’s total damages.

     Boutte’s case is not the type of rare case addressed in

Halper, where overwhelmingly disproportionate sanctions amounted

to 200 times the government’s proven loss.   The district court

correctly decided that there is no issue of disproportionality

where the imposed fine is 3.38 times the amount of the

government’s damages.   On these facts, Boutte’s contention that

the Government should be required to make an accounting of

damages is untenable.   The complicated prosecution and expenses

involved in this civil action are necessarily great enough that

the gross disproportionality and irrational relationship factors

of Halper are not reached.

     AFFIRMED.

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