Court Opinion

ID: 2966467
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:38:47.799619+00
Date Added: 2024-06-11T11:43:10.041233
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.
                                                                     No. 95-5686
GEORGE GLYMPH, d/b/a
Specifications and Standards, Inc.,
Defendant-Appellant.

Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Dennis W. Shedd, District Judge.
(CR-94-776)

Argued: May 9, 1996

Decided: September 19, 1996

Before RUSSELL, ERVIN, and WILKINS, Circuit Judges.

_________________________________________________________________

Affirmed by published opinion. Judge Ervin wrote the opinion, in
which Judge Russell and Judge Wilkins joined.

_________________________________________________________________

COUNSEL

ARGUED: James Hanjo Lengel, Columbia, South Carolina, for
Appellant. Eric William Ruschky, Assistant United States Attorney,
Columbia, South Carolina, for Appellee. ON BRIEF: Jonathan
Harvey, Columbia, South Carolina, for Appellant. Margaret B. Sey-
mour, United States Attorney, Columbia, South Carolina, for Appel-
lee.

_________________________________________________________________
OPINION

ERVIN, Circuit Judge:

George Glymph was convicted of knowingly supplying to the
Department of Defense (DOD) parts that did not conform to the pur-
chase order specifications, in violation of 18 U.S.C. § 287. Glymph
argues that his criminal prosecution was barred by his earlier four-
year debarment from government contracting, which he contends con-
stituted "punishment" for Double Jeopardy purposes. Glymph also
contends that the government failed to prove his specific intent to vio-
late Section 287. Finally, Glymph complains that the district court
clearly erred when it found that he occupied a position of trust as
defined by the Sentencing Guidelines. Finding no merit in his argu-
ments, we affirm.

I.

George Glymph was President and ninety-five percent owner of
Specifications and Standards, Inc. ("S&S")--an award-winning and
profitable small business in Columbia, South Carolina--which bid on
government purchase orders for hose assemblies and other parts. In
November 1992, S&S received approval, based on its good quality
history, to participate in the DOD's "Alternate Release Procedure,"
which allowed the company to ship parts without prior inspection by
a government Quality Assurance Representative ("QAR"). Under the
procedure, Glymph certified that each shipment had passed all
required tests and examinations and conformed to the contractual
specifications. S&S was expelled from the Alternate Release Proce-
dure program in March 1993, after failing to respond to DOD requests
for records documenting that it had delivered supplies meeting the
purchase order requirements. In April 1994, debarment proceedings
were instituted. No fine was imposed, but Glymph and S&S were
excluded from government contracting and subcontracting for four
years.

In October 1994, Glymph was indicted by a federal grand jury. The
case went to trial March 27, 1995, and the jury returned guilty ver-
dicts on seven counts of making false claims in connection with thir-
teen separate government purchase orders in which the parts supplied

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did not conform to the specifications. 18 U.S.C.§ 287. The district
court imposed a two-level enhancement for obstruction of justice
under U.S.S.G. § 3C1.1, based on evidence that Glymph set fire to
certain S&S government contract files after the DOD began an inves-
tigation. The court also enhanced Glymph's offense level under
U.S.S.G. § 3B1.3 for abusing a position of trust. Glymph was sen-
tenced on each count to twenty-one months in prison with two years'
supervised release, all sentences to run concurrently, and was ordered
to pay $6,891 in restitution, plus special assessments.

II.

Glymph argues that his four-year debarment from government con-
tracting imposed "punishment" for purposes of the Double Jeopardy
Clause, and therefore that his criminal conviction should be set aside.
Glymph was debarred from government contracting for four years
under 48 C.F.R. § 9.406-2(b), which allows for debarment or suspen-
sion in the case of

          (1) Violation of the terms of a Government contract or
          subcontract so serious as to justify disbarment, such as--

          ***

          (ii) A history of failure to perform, or of unsatis-
          factory performance of, the terms of one or more
          contracts.

The reviewing official concluded that Glymph "d[id] not have the
basic level of responsibility required of those who do business with
the Government and that a period of debarment is appropriate to pro-
tect the Government's business interests."

Glymph's argument that administrative debarment imposes punish-
ment is not persuasive. We agree with the Tenth Circuit's assessment
of the remedial nature of debarment:

          It is the clear intent of debarment to purge government pro-
          grams of corrupt influences and to prevent improper dissipa-

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          tion of public funds. Removal of persons whose
          participation in those programs is detrimental to public pur-
          poses is remedial by definition. While those persons may
          interpret debarment as punitive, and indeed feel as though
          they have been punished, debarment constitutes the "rough
          remedial justice" permissible as a prophylactic governmen-
          tal action.

United States v. Bizzell, 921 F.2d 263, 265 (10th Cir. 1990) (citations
omitted) (concerning debarment from HUD programs); accord United
States v. Borjesson, No. 95-36140, 1996 WL 453336 at *3 (9th Cir.
Aug. 13, 1996) (debarment from HUD programs); United States v.
Stoller, 78 F.3d 710, 715-24 (1st Cir. 1996) (debarment from banking
industry); DiCola v. Food and Drug Administration, 77 F.3d 504,
506-07 (D.C. Cir. 1996) (debarment under Food, Drug and Cosmetic
Act); Bae v. Shalala, 44 F.3d 489, 492-96 (7th Cir. 1995) (debarment
under the Generic Drug Enforcement Act); United States v. Hudson,
14 F.3d 536, 539-42 (10th Cir. 1994) (debarment from banking indus-
try); United States v. Furlett, 974 F.2d 839, 844 (7th Cir. 1992)
(debarment from commodities trading); Manocchio v. Kusserow, 961
F.2d 1539, 1541-42 (11th Cir. 1992) (physician's exclusion from
Medicare programs).

Similarly, the Supreme Court recently held that civil forfeiture is
not punitive for Double Jeopardy purposes. United States v. Ursery,
116 S. Ct. 2135, 2140 (1996). The Court first examined the forfeiture
statute's stated purpose and then its actual effects to ascertain whether
it served "important nonpunitive goals." Ursery's analysis defeats
Glymph's argument. First, the policy statement contained in the Fed-
eral Acquisition Regulations' debarment provisions explicitly articu-
lates its remedial, nonpunitive purposes:

          (a) Agencies shall solicit offers from, award contracts
          to, and consent to subcontracts with responsible contractors
          only. Debarment and suspension are discretionary actions
          that, taken in accordance with this subpart, are appropriate
          means to effectuate this policy.

          (b) The serious nature of debarment and suspension
          requires that these sanctions be imposed only in the public

                     4
         interest for the Government's protection and not for pur-
         poses of punishment. Agencies shall impose debarment to
         protect the Government's interest and only for the causes
         and in accordance with the procedures set forth in this sub-
         part.

48 C.F.R. § 9.402. Here, the debarment serves the important nonpuni-
tive goals of preventing the further dissipation of public funds and
protecting DOD programs--including, potentially, protecting public
safety--by preventing the supply of substandard or defective parts.
The fact that Glymph has suffered as a result of the debarment is of
no import, for "whether a sanction constitutes punishment is not
determined from the defendant's perspective, as even remedial sanc-
tions carry the `sting of punishment.'" Department of Revenue v.
Kurth Ranch, 114 S. Ct. 1937, 1945 n. 14 (1994) (quoting United
States v. Halper, 490 U.S. 435, 447 n.7 (1989)).

We find no merit in Glymph's contention that the debarment was,
in his case, so "overwhelmingly disproportionate" to the harm caused
by his conduct that it amounts to punishment under United States v.
Halper.* Glymph complains that the four-year exclusion is over-
whelmingly disproportionate to the "small-gauge" damages he
caused. Assuming that, after Ursery, the Halper case-specific balanc-
_________________________________________________________________
*Glymph emphasizes that he was debarred for four years, in apparent
violation of the three-year maximum debarment period established in the
regulations. See 48 C.F.R. § 9.406-4 (providing that "generally, debar-
ment should not exceed 3 years" except where an extension is necessary
based on new facts or circumstances). It is not clear whether Glymph
argues that the four-year sanction is inherently excessively long, and
therefore punitive, or whether he argues that the one-year period exceed-
ing the statutory maximum constitutes evidence of the debarring offi-
cial's punitive intent. Although the record does not reveal why Glymph
was given an extra year, the violation of the regulation does not rise to
constitutional significance. We find that a four-year debarment is not
inherently excessively long. Further, we find that, although the unex-
plained extra penalty could be viewed as evidence of an intent to punish
particularly egregious conduct, it can as easily be viewed as evidence of
an intent to protect the government from particularly egregious conduct.
We find no evidence that the extra year altered the debarment's remedial
nature.

                   5
ing approach applies to a case outside the fixed penalty context, see
Borjesson, 1996 WL 453336 at *2 (noting that the Supreme Court
"has declined to apply Halper's balancing test outside the fixed-
penalty context"), we do not agree that Glymph caused "small-gauge"
damage. The Government estimated that it paid S&S more than
$40,000 for nonconforming parts. Taking Glymph out of the game for
four years is certainly not "overwhelmingly disproportionate" to that
harm.

III.

Glymph contends that there was insufficient evidence to establish
his knowledge that the parts supplied did not conform to the purchase
order requirements--the requisite specific intent to violate § 287. He
does not offer, however, any support for that contention, other than
to assert, in essence, that the jury should have viewed the evidence
his way. He argues first that, because he and S&S received awards
and special recognition, and because he was formerly a law enforce-
ment officer, any wrongdoing must have been aberrant. Second, he
argues that the jury should have concluded that S&S Vice President
Dennis McLean was the true wrongdoer. Third, Glymph claims that
the company's success overwhelmed him and caused him to allow
quality control to get out of hand--mere negligence undeserving of
a jail sentence. Finally, he contends that the jury became confused
and treated Glymph and S&S as one legal entity.

All of those arguments add up to little more than wishing that the
jury had believed him. Viewing the case in the light most favorable
to the Government, United States v. Brewer, 1 F.3d 1430, 1437 (4th
Cir. 1993), we find plentiful evidence of Glymph's knowledge. The
jury heard evidence that S&S was a small company, and that Glymph
was actively involved in all aspects of the business, especially in
ordering parts to fill government purchase orders. Under the quality
control manual, Glymph bore the responsibility for inspecting the
parts.

On each invoice submitted to the DOD, Glymph signed a statement
attesting that

          The supplies comprising this shipment have been subjected
          to and have passed all examinations and tests required by

                    6
         the contract, were shipped in accordance with authorized
         shipping instructions, and conform to the quality, identity
         and condition called for in contractual requirements and to
         the quantity shown on this document.

Yet, testimony at trial indicated that all nonconforming parts should
have been caught by Glymph when they were received. In fact, the
evidence showed that in some cases a superficial inspection would
quickly have revealed that parts did not conform to the government's
order. For example, Count Eight involved a purchase order for high
pressure fuel lines from an identified source. The parts received by
the government had threading on the inside of the hose assemblies,
rather than on the outside as ordered, and were manufactured by a dif-
ferent source. Because a jury reasonably could have found that an
inspection would have revealed the disparity, it reasonably could have
found that Glymph knew or purposely avoided knowing that the parts
had the wrong type of threading. Count Nine provides a similar exam-
ple. It involved a purchase order for three-inch hose clamps, based on
a bid of $8.00 per clamp. After S&S submitted the $8.00 per clamp
bid, Glymph placed an order with the supplier for three-eighths-inch
clamps, which cost twenty-two cents each. The clamps received by
the government thus had a much smaller diameter than that specified
in the purchase order. Again, inspection would have shown that those
parts did not conform to the government's order.

On some counts, there was direct evidence of Glymph's knowl-
edge. Counts Six and Seven involved a purchase order for stainless-
steel tube caps used in submarines. The S&S bid and subsequent ship-
ment were made of carbon steel. Dennis McLean testified that
Glymph placed the order for the carbon-steel (rather than stainless-
steel) parts. McLean testified

         Mr. Glymph told me I'm going to package [the carbon steel
         shipment] and ship it back just the way it is. If they catch
         it and they call me back and ask me about making it stain-
         less steel, then I will do it. . . . I run S&S; You run Transax.
         I'm going to send them back.

Count Twelve involved an order for GE Alco poppet valves. Martha
Smith, the S&S employee who submitted the bid, testified that

                    7
Glymph instructed her to obtain quotes from Striegle Supply, Inc., an
unauthorized dealer that sold nongenuine GE Alco Parts. Smith testi-
fied that, when she expressed concern, Glymph responded that they
had not been caught yet, that they were not the only ones doing it, and
that "he was the owner of the company and that he would run his
company the way he wanted to run it." Smith further testified that
Glymph instructed her not to disclose the disparity to Ray Bartee, the
QAR.

We have carefully reviewed the evidence supporting each count of
conviction, and find that the jury reasonably could have concluded
beyond a reasonable doubt that Glymph knew, or purposely avoided
knowing, that the parts did not conform to the contractual obligations.
Further, there is no evidence that the jury was confused and unable
to distinguish between Glymph and S&S. Their verdicts of acquittal
on six counts demonstrate that they paid attention to quality of evi-
dence on each charge.

IV.

Finally, Glymph argues that he did not occupy a position of trust
with regard to the DOD, justifying an enhancement of his sentence.
As merely an arms-length contractual partner in the ordinary course
of business, he argues, he had no special duty to the United States.

Whether a defendant occupied a position of trust warranting a two-
level enhancement under U.S.S.G. § 3B1.3 is a factual determination
reviewable for clear error. United States v. Helton, 953 F.2d 867, 869
(4th Cir. 1992). Section 3B1.3, "Abuse of Position of Trust or Use of
Special Skill," provides:

          If the defendant abused a position of public or private trust,
          or used a special skill, in a manner that significantly facili-
          tated the commission or concealment of the offense,
          increase by 2 levels. This adjustment may not be employed
          if an abuse of trust or skill is included in the base offense
          level or specific offense characteristic. . . .

U.S.S.G. § 3B1.3. The commentary explains that

                    8
         "Public or private trust" refers to a position of public or pri-
         vate trust characterized by professional or managerial dis-
         cretion. . . . For this enhancement to apply, the position of
         trust must have contributed in some significant way to facil-
         itating the commission or concealment of the offense. . . .
         This adjustment, for example, would apply in the case of an
         embezzlement of a client's funds by an attorney serving as
         a guardian, a bank executive's fraudulent loan scheme, or
         the criminal sexual abuse of a patient by a physician under
         the guise of an examination. This adjustment would not
         apply in the case of an embezzlement or theft by an ordinary
         bank teller or hotel clerk . . . .

U.S.S.G. § 3B1.3, comment note 1. We have identified several factors
that courts should consider in determining whether a defendant held
a position of trust:

         First, courts ask whether the defendant had special duties or
         "special access to information not available to other employ-
         ees." Second, the defendant's level of supervision or "degree
         of managerial discretion" is relevant. Bank tellers who
         embezzle from their employers provide an example of a sit-
         uation where there is little trust to abuse because the
         employees are closely supervised, and it is expected that
         wrongs they commit will be readily detected. Third, the
         analysis also entails an examination of "the acts committed
         to determine whether this defendant is `more culpable' than
         others who hold similar positions and who may commit
         crimes."

United States v. Gordon, 61 F.3d 263, 269 (4th Cir. 1995) (citations
omitted). Whether a defendant held a position of trust must be "ap-
proached from the perspective of the victim." Id. The district court
applied the factors listed in Gordon, and found that Glymph occupied
a position of trust. (J.A. at 756-71). The court focused on the self-
certification process--the "Alternate Release Procedure"--whereby
the Government allowed the company to certify its own compliance.
Glymph was allowed to look at the documents and the product side-
by-side, and certify that they matched up. No one else was authorized
to certify the shipments under the procedure. There was no point in

                    9
the process at which another government inspector looked at the doc-
uments and products together to double-check Glymph's certification.
Thus, after Glymph's certification, parts were shipped to supply
depots, and the documentation went to Indiana. Those who received
the goods would not necessarily know that the shipments did not
comply with the orders. And some of the product disparities would
not be noticed until they were actually put into use. For example,
Count Eleven charged that S&S delivered hose assemblies built with
commercial-grade hose rather than the military specification hose cal-
led for in the purchase order. The two grades of hose differ only in
their temperature of operation.

Glymph's reliance on United States v. Broderson , 67 F.3d 452 (2nd
Cir. 1995), is misplaced. Broderson was convicted of "executing a
major fraud scheme in connection with the defective pricing of a gov-
ernment contract," wire fraud, and "making false statements to the
United States." Id. at 455. The Second Circuit held that Broderson's
duty to disclose cost and pricing data to NASA stemmed solely from
the Truth in Negotiation Act and the Federal Acquisition Regulations.
Id. at 455-56. The agency had not entrusted Broderson with any spe-
cial discretion. Id. at 456. Thus, Broderson was no more in a "position
of trust" than is any taxpayer who files false returns. Id. at 455-56.

Broderson is easily distinguishable from this case. Here, Glymph
benefitted from participating in a program under which it was found
worthy of being trusted to self-certify its compliance. The DOD dele-
gated the responsibility of performing inspections on its behalf to
ensure that the parts conformed to the requirements in the purchase
orders. The jury determined that Glymph abused that privilege to his
profit, sending nonconforming shipments while knowing that it was
unlikely that the disparities would be caught. The determination by
the district court that Glymph occupied a position of trust with respect
to the government was not clearly erroneous.

V.

For the foregoing reasons, the judgment of the district court is

AFFIRMED.

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