United States v. Croft ( 2022 )


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  • Case: 21-50380     Document: 00516331395         Page: 1     Date Filed: 05/24/2022
    United States Court of Appeals
    for the Fifth Circuit                              United States Court of Appeals
    Fifth Circuit
    FILED
    May 24, 2022
    No. 21-50380                          Lyle W. Cayce
    Summary Calendar                             Clerk
    United States of America,
    Plaintiff—Appellee,
    versus
    Bradley Lane Croft,
    Defendant—Appellant.
    Appeal from the United States District Court
    for the Western District of Texas
    USDC No. 5:18-CR-603-1
    Before King, Costa, and Ho, Circuit Judges.
    Per Curiam:*
    Bradley Lane Croft challenges the sufficiency of the evidence
    supporting his convictions for wire fraud, aggravated identity theft, and
    money laundering. He also challenges the restitution and forfeiture orders
    *
    Pursuant to 5th Circuit 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    opinion should not be published and is not precedent except under the limited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 5th Circuit Rule 47.5.4.
    Case: 21-50380      Document: 00516331395          Page: 2    Date Filed: 05/24/2022
    No. 21-50380
    issued by the district court pursuant to those convictions. For the following
    reasons, we AFFIRM.
    I. FACTS AND PROCEDURAL HISTORY
    From 2011 to 2018, Bradley Lane Croft was the operator of Universal
    K-9, a school in San Antonio that trained dogs, as well as handlers, for various
    law-enforcement related tasks such as detection and tracking. Initially, many
    of Croft’s students came from small police departments; he would both train
    a person as a handler and then provide him or her with a dog (often obtained
    from shelters) for $2,500, well below the normal price of obtaining a working
    dog even before considering the price of training. Croft then thought of a new
    approach to expand his business: teaching veterans who could pay the course
    fee using funds provided through the G.I. Bill and paid by the Education
    Benefits Program of the Department of Veterans Affairs (VA). To be eligible
    to receive those funds, Universal K-9 had to be certified by the Texas
    Veterans Commission (TVC) as a non-accredited, non-college-degree
    school.
    Over the course of three years, Croft submitted multiple applications
    to the TVC; eventually, after the fourth application (received on March 4,
    2016) was approved, Universal K-9 was certified by the TVC and accepted
    by the VA on June 24, 2016. One of the required attachments for an
    application for a non-accredited, non-college-degree school was a “Roster of
    Administrative and Instructional Staff.” The form where that information
    was to be submitted contained a provision where the submitting applicant
    agreed: “I certify that the information on this form (and/or attachment) is
    true and correct to the best of my knowledge and belief.”
    Rufus Coburn, who was the Assistant Director of the TVC when
    Croft’s applications were submitted, testified at trial that the name of the
    instructors and their certifications to teach the listed classes were required
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    for approval of an application by the TVC. He also described the roster as a
    “particularly important” part of the application. Coburn additionally
    testified that each individual instructor had to be approved to teach veterans
    by the TVC, that “the veteran will not be able to get the G.I. Bill benefits if
    [an] unapproved instructor is one of their instructors,” and that the roster of
    instructors had to be updated if any changes occurred.
    On the final application, which was ultimately approved, Croft listed
    four instructors whose duties were to “[t]each [c]lass and [t]rain [d]ogs”:
    Wes Keeling, Dustin Bragg, Jesse Stanley, and Art Underwood. In the
    column titled “Course/Subject Taught,” each had the following courses
    listed: Police K-9 Handlers Course, Police K-9 Trainers Course, K-9
    Interdiction Course, Behavioral Modification, and Kennel Master Course.
    Croft’s application additionally included numerous certificates detailing the
    certifications of the four instructors.
    However, at trial, evidence was introduced that the four individuals
    had neither given their permission to be listed as Universal K-9 instructors
    for the purposes of the TVC application nor actually served as instructors for
    the listed courses. Wes Keeling testified that he only taught a short
    interdiction course as a module to Universal K-9’s larger program (and only
    to police officers and not to the general public), stopped teaching for
    Universal K-9 in 2017, and did not agree to teach the courses listed on the
    application nor grant permission for Croft to use his name and certifications
    on the application. Dustin Bragg testified that he had never talked with Croft
    about joining Universal K-9’s staff nor had he authorized use of his name for
    the application, but instead taught just one-to-two interdiction modules with
    Keeling (who served as his point of contact and paid Bragg for that work); he
    did not agree to teach any other courses. Jesse Stanley testified that he had
    agreed to work with Universal K-9 should it be approved for different military
    contracts that were separate from and predated the TVC application, ended
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    his working relationship with the company in 2014, and was already
    employed by the Department of Homeland Security by the time the final
    application was submitted and approved. The court did not hear testimony
    from Art Underwood, and for good reason—he was dead, and had been dead
    since March 16, 2014, approximately two years before Croft filed his final
    application. Multiple students (including veterans who took classes using
    G.I. Bill funds) testified that their classes were primarily taught by Croft
    and/or other individuals not listed on the TVC application.
    The court also heard testimony from Richard Cook, who recruited
    veterans and processed paperwork for Universal K-9 to be paid by the VA.
    Cook was a 100% disabled veteran who suffered from cognitive disabilities
    due to injuries he suffered as a result of a random act of violence years earlier.
    Cook testified that, unbeknownst to him, Croft had listed Cook as the
    President of Universal K-9 on applications to the TVC. Cook also testified
    that, at Croft’s direction, he opened multiple bank accounts in his own name
    for Universal K-9 to receive funds from the VA (ultimately totaling
    $1,506,758.31) and sent the checkbooks, debit cards, and online passwords to
    Croft.
    Croft often directed Cook to withdraw funds from these accounts, and
    sometimes to funnel those funds through Cook’s own bank accounts, which
    Croft then used to make several purchases. These purchases were either
    made with the hope to expand Universal K-9 and its activities with veterans
    or for Croft’s own benefit. These purchases included an American Eagle 45T
    mobile home, a property at 15329 Tradesman in San Antonio, multiple
    pickup trucks held in the name of other people (including Croft’s daughter),
    payment for elective surgery, and jet skis. For some of these purchases, Croft
    had Cook withdraw money from the Universal K-9 accounts holding VA
    money in intervals of $9,000 or less, under the threshold where reporting is
    required by the financial institution.
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    In a superseding indictment, Croft was charged with eight counts of
    wire fraud in violation of 
    18 U.S.C. § 1343
    , four counts of aggravated identity
    theft in violation of 18 U.S.C. § 1028A(a)(1), two separate counts of money
    laundering in violation of 
    18 U.S.C. § 1956
    (a)(1)(A), (a)(1)(B), and (a)(2),
    and two counts of making a false tax return in violation of 
    26 U.S.C. § 7206
    (1). After a bench trial, Croft was found guilty on all counts. He was
    ultimately sentenced to 118 months’ imprisonment. The court also ordered
    that Croft pay a $1,600 special assessment and $1,506,758.31 in restitution
    and ordered forfeiture of several pieces of personal and real property. 1 Croft
    timely appeals.
    II. DISCUSSION
    Croft challenges the sufficiency of the evidence supporting his
    convictions for wire fraud, aggravated identity theft, and money laundering. 2
    He additionally challenges the district court’s restitution and forfeiture
    orders.
    We “review[] a district court’s finding of guilt after a bench trial to
    determine whether it is supported by ‘any substantial evidence.’” United
    States v. Serna-Villarreal, 
    352 F.3d 225
    , 234 (5th Cir. 2003) (quoting United
    States v. Shelton, 
    325 F.3d 553
    , 557 (5th Cir. 2003)). That is, we look to see
    whether “any rational trier of fact could have found that the evidence
    established guilt beyond a reasonable doubt.” 
    Id.
     In doing so, we cast the
    evidence “in the light most favorable to the verdict,” 
    id.,
     and “defer to all
    reasonable inferences drawn by the trial court,” United States v. Turner, 319
    1
    The specific forfeiture was: a mobile home; two pickup trucks; two jetskis; a
    trailer; multiple specific amounts of currency seized from Universal K-9’s bank accounts;
    the property at 15329 Tradesman, San Antonio; and a money judgment equal to $1,300,000
    representing the value of traceable proceeds.
    2
    He does not challenge his convictions for making false tax returns.
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    50380 F.3d 716
    , 721 (5th Cir. 2003) (quoting United States v. Mathes, 
    151 F.3d 251
    ,
    252 (5th Cir. 1998)). We will take each challenged conviction in turn.
    A. Wire Fraud
    Proving wire fraud requires proving the following elements: “(1) a
    scheme to defraud; (2) the use of, or causing the use of, wire communications
    in furtherance of the scheme; and (3) a specific intent to defraud.” United
    States v. Harris, 
    821 F.3d 589
    , 598 (5th Cir. 2016). “‘Scheme to defraud’ is
    tricky to define, ‘but it includes any false or fraudulent pretenses or
    representations intended to deceive others in order to obtain something of
    value, such as money, from the [entity] to be deceived.’” United States v.
    Swenson, 
    25 F.4th 309
    , 316–17 (5th Cir. 2022) (alteration in original) (quoting
    United States v. Evans, 
    892 F.3d 692
    , 711–12 (5th Cir. 2018)). The false
    statement or pretense must also be material, meaning that “it has ‘a natural
    tendency to influence, or [is] capable of influencing, the decision of the
    decisionmaking body to which it was addressed.’” Harris, 821 F.3d at 599
    (alteration in original) (quoting United States v. Gaudin, 
    515 U.S. 506
    , 509
    (1995)). Lastly, the intent element requires that the defendant “acts
    knowingly with the specific intent to deceive for the purpose of causing
    pecuniary loss to another or bringing about some financial gain to himself.”
    Swenson, 25 F.4th at 318–19 (quoting Evans, 892 F.3d at 712).
    The use of the wires is not in dispute—Croft’s successful application
    for Universal K-9 to be certified by the TVC led more than a million dollars
    of G.I. Bill funds to be transported through the wires and into his coffers. The
    only question, then, is whether that certification was procured through fraud.
    We agree that there was sufficient evidence to that effect.
    First, looking to the scheme, there was sufficient evidence that Croft
    falsely listed four individuals on his application as instructors who did not,
    and would not, serve in that role. The court heard ample testimony to that
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    effect from many of the individuals themselves. And it beggars belief that
    Croft, when filling out his application, had Art Underwood’s agreement to
    train and instruct dog handlers from beyond the grave. Sufficient evidence
    supported finding false representations, and material false representations at
    that: Rufus Coburn testified to the importance of the roster of instructors to
    the application, and that an application without an accurate list of certified
    instructors would be denied.
    Further, to the extent any of the four were previously involved with
    Universal K-9, taught some classes overlapping with veterans attending, or
    even were somewhat involved with the TVC application (as Croft argues),
    that does not cut against a finding of deceit. The TVC, in approving an
    application, expected that the listed, certified instructors were teaching the
    listed classes. They were not. The TVC further expected that it and the VA
    would be kept abreast of any changes to the roster of instructors. They were
    not. And the TVC and VA expected that the veterans who were spending
    their G.I. Bill benefits on classes at Universal K-9 would be taught the specific
    classes listed on the application by the specific instructors listed on the
    application. They were not. That is sufficient to find deceit. Any argument
    that at least one qualified instructor worked for Universal K-9 after
    certification, and may have even taught some classes to veterans, barks up
    the wrong tree. The application called for a person to provide, to the best of
    his or her knowledge, a complete, accurate roster of certified instructors
    teaching specific classes before an application could be approved. Croft did
    not provide that, but instead provided a list rife with falsehoods. There was
    sufficient evidence that these falsehoods were not included by mistake, but
    instead were designed to deceive. We have previously noted that false
    representations made to procure a government contract for which a person
    would not otherwise qualify evidence a scheme to defraud. See Harris, 821
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    F.3d at 598–99. There was sufficient evidence of that here, and, therefore,
    sufficient evidence to find a scheme to defraud.
    There was also sufficient evidence to find a specific intent to defraud.
    “[P]roof of such intent can arise ‘by inference from all of the facts and
    circumstances surrounding the transactions.’” United States v. Ismoila, 
    100 F.3d 380
    , 387 (5th Cir. 1996) (quoting United States v. Keller, 
    14 F.3d 1051
    ,
    1056 (5th Cir. 1994)). As stated above, there was ample evidence that Croft
    listed individuals as instructors who had not, would not, and even could not
    serve in that role. Further evidence arises from the fact that, even after
    certification, Croft did not even reach out to any of the living individuals to
    enlist them as the instructors he purported them to be. And even more
    evidence of intent can be derived from the fact that Croft used VA monies to
    enrich himself. See United States v. Stockman, 
    947 F.3d 253
    , 264 (5th Cir.
    2020); United States v. Mann, 
    493 F.3d 484
    , 493 (5th Cir. 2007). There was
    sufficient evidence to find Croft’s intent to defraud, and, therefore, sufficient
    evidence to support the convictions for wire fraud.
    B. Aggravated Identity Theft
    We next turn to Croft’s challenge to his conviction for aggravated
    identity theft. “To establish aggravated identity theft in violation of 18
    U.S.C. § 1028A, the Government was required to prove that [Croft]
    (1) knowingly used (2) the means of identification of another person
    (3) without lawful authority (4) during and in relation to a felony enumerated
    in 18 U.S.C. § 1028A(c).” United States v. Mahmood, 
    820 F.3d 177
    , 187 (5th
    Cir. 2016). Wire fraud is one of said enumerated offenses, 18 U.S.C.
    § 1028A(c)(5), and a person’s name is considered a means of identification,
    
    28 U.S.C. § 1028
    (d)(7)(A).
    Croft’s sole challenge was based on an asserted lack of “use” of the
    four victim’s names. He points to cases from other circuits for support,
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    principally focusing on United States v. Miller, 
    734 F.3d 530
     (6th Cir. 2013).
    There, the Sixth Circuit held that “as a matter of law, [the defendant] did not
    ‘use’ a means of identification within the meaning of § 1028A by signing a
    document in his own name which falsely stated that [the alleged victims] gave
    him authority . . . to act on [their behalf].” Id. at 542. However, that
    argument is now foreclosed by United States v. Dubin, 
    27 F.4th 1021
     (5th Cir.
    2022) (en banc). There, our en banc court adopted the panel’s opinion,
    which found the “use” requirement satisfied when a person employs
    another’s means of identification without permission and in furtherance of a
    crime, even if said means were initially acquired legally. United States v.
    Dubin, 
    982 F.3d 318
    , 326–27 (5th Cir. 2020), adopted by, 
    27 F.4th 1021
    , 1021–
    22 (5th Cir. 2022) (en banc). The same is true here: no matter how he
    acquired the names and certifications of the four individuals, he submitted
    them to the TVC (thus using the individual’s names) without lawful
    authority in furtherance of his wire-fraud scheme. As Croft now all but
    concedes, Dubin disposes of his argument that he did not “use” the names
    of the four individuals within the meaning of the aggravated identity theft
    statute. There was sufficient evidence supporting Croft’s convictions under
    that statute.
    C. Money Laundering
    We now briefly turn to Croft’s objections to his money-laundering
    conviction. “To sustain a conviction under the money laundering promotion
    statute, the Government must show that the defendant: (1) conducted or
    attempted to conduct a financial transaction, (2) which the defendant then
    knew involved the proceeds of unlawful activity, (3) with the intent to
    promote or further unlawful activity.” United States v. Miles, 
    360 F.3d 472
    ,
    477 (5th Cir. 2004). Croft’s sole challenge to his money-laundering
    convictions hinges on his challenge to his wire-fraud convictions—because
    there was no wire fraud, he argues, there were no proceeds from said fraud
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    that could have been laundered. Because we affirm Croft’s convictions for
    wire fraud, we correspondingly affirm his convictions for money laundering
    related to the proceeds from that fraud.
    D. Restitution and Forfeiture
    We last consider Croft’s challenge to the district court’s orders on
    restitution and forfeiture. We review the legality of restitution orders de
    novo. United States v. Swenson, 
    25 F.4th 309
    , 322 (5th Cir. 2022). Factual
    findings underpinning the restitution order are reviewed for clear error.
    United States v. Beydoun, 
    469 F.3d 102
    , 107 (5th Cir. 2006). The same
    framework—de novo review of the law, clear error review of the factual
    findings—applies to forfeiture orders as well. United States v. Reed, 
    908 F.3d 102
    , 110, 125 (5th Cir. 2018), cert. denied, 
    139 S. Ct. 2655
     (2019).
    Like his challenges to his money-laundering convictions, much of
    Croft’s argument related to the restitution and forfeiture orders rely on his
    assertion that insufficient evidence supports his wire-fraud convictions. He
    argues that no wire fraud occurred requiring restitution, and that there can
    be no nexus allowing for forfeiture between property and a nonexistent crime.
    Because we find there was sufficient evidence to support the wire-fraud
    convictions, these arguments are without merit.
    And there is no other issue with the district court’s orders. “[W]here
    a fraudulent scheme is an element of the conviction, the court may award
    restitution for ‘actions pursuant to that scheme.’” Swenson, 25 F.4th at 322
    (quoting United States v. Cothran, 
    302 F.3d 279
    , 289 (5th Cir. 2002)). The
    United States government paid Croft over $1.5 million dollars for veterans to
    be taught by the certified instructors approved by the TVC; numerous
    veterans had money taken from their accounts with the VA to pay for that
    training. But the veterans did not receive that promised training, but instead
    received training of unknown quality. Because of that fact, the government
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    proffered, without objection, that during the investigation agents sent “a
    bulletin to all law enforcement agencies in the United States warning them
    about this problem” with Universal K-9. The extent of actual, beneficial
    training that the veterans might have received is beside the point. Universal
    K-9’s operations and teaching of veterans was “‘systematically tainted with
    fraud’ and it was impossible to tell which services were legitimate versus
    illegitimate.” United States v. Karie, 
    976 F.3d 800
    , 805 (8th Cir. 2020)
    (quoting United States v. Miell, 
    661 F.3d 995
    , 1001 (8th Cir. 2011)). The
    district court’s order of restitution for the entire amount of money Croft was
    paid by the VA was not erroneous.
    As to the forfeiture, Croft’s sole argument on appeal, aside from the
    challenge to his convictions, boils down to a single sentence: “[T]he
    Government has failed to prove the above references nexus necessary for
    forfeiture.” “A party that asserts an argument on appeal, but fails to
    adequately brief it, is deemed to have waived it.” United States v. Scroggins,
    
    599 F.3d 433
    , 446 (5th Cir. 2010) (quoting Knatt v. Hosp. Serv. Dist. No. 1 of
    E. Baton Rouge Parish, 327 F. App’x 472, 483 (5th Cir. 2009)). Croft’s single
    sentence reference to a lack of the required “nexus,” without any further
    explanation or argument, is insufficient to satisfy the requirement that “a
    party must ‘press’ its claims.” 
    Id. at 447
     (quoting Knatt, 327 F. App’x at
    483). In any event, the district court’s findings that Croft “engaged in a
    pattern of deceit,” “placed virtually every asset there was in somebody else’s
    name,” and “held an iron grip and controlled everything that was going on
    at that facility,” and that therefore all of the seized assets could be traced to
    Croft and his monies procured by fraud were not erroneous, let alone clearly
    erroneous. We affirm the restitution and forfeiture orders.
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    IV. CONCLUSION
    For the foregoing reasons, the judgment of the district court is
    AFFIRMED.
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