United States v. Zerry Feaster , 798 F.3d 1374 ( 2015 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
No. 14-13978
_________________________
D.C. Docket No. 1:13-cr-00499-SCJ-AJB-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ZERRY FEASTER,
a.k.a. Zerry Travis,
a.k.a. Zerry West,
Defendant-Appellant.
__________________________
Appeal from the United States District Court
for the Northern District of Georgia
__________________________
(August 25, 2015)
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Before ROSENBAUM and FAY, Circuit Judges, and MIDDLEBROOKS, *
District Judge.
ROSENBAUM, Circuit Judge:
Sometimes turning lemons into lemonade can be difficult. But making
felony convictions into misdemeanor convictions is even more challenging. It
takes an act of Congress—an act of Congress that did not occur in this case.
Zerry Feaster was convicted of seven felony counts of theft of public money,
in violation of 18 U.S.C. § 641. The stolen amounts charged in the seven counts
totaled $2,300. Feaster now asks us to hold that her seven felony convictions are
actually misdemeanor convictions because each separate conviction involves a sum
that does not exceed $1,000. But Feaster’s proposed interpretation of § 641 would
require us to ignore the unambiguous language of the statute that designates all §
641 convictions felonies first and reduces them to misdemeanors second only if the
sum of the amounts charged in all of the § 641 convictions in the defendant’s case
equals $1,000 or less. Feaster also urges us to conclude that the district court
committed legal error and that it clearly erred when it imposed the sophisticated-
means enhancement in determining her guidelines level. Because the district court
correctly determined Feaster’s § 641 convictions to be felonies and because it did
*
The Honorable Donald M. Middlebrooks, United States District Judge for the Southern
District of Florida, sitting by designation.
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not err or clearly err in applying the sophisticated-means enhancement, we now
affirm the rulings of the district court.
I.
Zerry Feaster was employed with the United States Department of Veteran’s
Affairs (“VA”). Beginning in 2008, Feaster worked at the VA Medical Center in
Decatur, Georgia, assigned to the VA Police Services office but working
specifically as the secretary for the Chief of Police Services.
As part of her employment, Feaster’s responsibilities included purchasing
office supplies and equipment for uniformed officers and performing general
timekeeping functions. To help her execute these duties, the government arranged
for Feaster to receive a Government Purchase Card, which was a U.S. Bank credit
card (“Purchase Card”). As the name suggests, the Purchase Card was for the use
of employees to make purchases authorized by the VA. Employees were not
allowed to use the Purchase Card for personal expenses.
To buy items for the VA with the Purchase Card, Feaster had to log into an
electronic system called VISTA/IFCAP and create a purchase order. On the
purchase order, Feaster had to identify the items and quantities to be purchased.
An approving official would review the purchase order, determine whether the
proposed purchases were reasonable and funds were available, and, if appropriate,
approve the purchase order. Once the purchase order was approved, Feaster would
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make the approved purchases with the Purchase Card and would later amend the
purchase order in the VISTA/IFCAP electronic system to reflect the precise items
and quantities that were actually obtained. After she reconciled the orders, Feaster
would then notify the approving officer that charges were pending for review and
approval. Upon approving the charges, the VA would pay the amounts charged to
the Purchase Card.
From February 17, 2010, through February 17, 2012, Feaster used the
Purchase Card to buy prepaid gift cards that she then expended on personal items
and activities. In order to hide these prohibited purchases, Feaster created
fictitious purchase orders through the VISTA/IFCAP system.
Under this scheme, Feaster first requested and obtained approval to obtain
office supplies from Office Depot, usually in an amount over $2,000. Then,
instead of buying the approved items, Feaster acquired hundreds of dollars’ worth
of prepaid gift cards. After making the unauthorized purchases, Feaster reconciled
the purchase orders in the VISTA/IFCAP system so that the total amount to be
paid on the Purchase Card matched the total amount Feaster had spent at Office
Depot. Feaster did not disclose that she had bought gift cards with the Purchase
Card and instead made fictitious representations about the quantities of office
supplies purchased. In this way, Feaster made it appear that the charges on the
Purchase Card were for office supplies or other items relating to the VA Police
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Services office instead of for personal gift cards. Feaster used the gift cards to pay
for jewelry, luxury accessories, and other personal expenses.
All told, Feaster knowingly converted to her use $88,264.47 of the VA’s
money into gift cards and other questionable purchases made during the same time
frame. She did this without the knowledge and authorization of a VA approving
official.
The VA identified Feaster’s misconduct after a supervisor reported that
Feaster was misusing her Purchase Card. Upon being confronted with the
unauthorized purchases, Feaster initially denied having any knowledge of them but
eventually admitted to using the Purchase Card for personal use. Feaster also
conceded that no one else had access to the Purchase Card, that the card had never
been out of her possession, and that she was the only person authorized to make
purchases with the Purchase Card.
On December 17, 2013, a federal grand jury charged Feaster with seven
counts of theft of public money, in violation of 18 U.S.C. § 641 (Counts 1-7), and
four counts of making false statements, in violation of 18 U.S.C. § 1001 (Counts 8-
12). Each of the seven § 641 counts accused Feaster of stealing $400 or less.
Feaster pled guilty to all counts without the benefit of a written plea agreement.
The Presentence Investigation Report (“PSR”) assigned Feaster a base
offense level of 6, pursuant to U.S.S.G. § 2B1.1(a)(2). It also assessed an 8-level
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enhancement under U.S.S.G. § 2B1.1(b)(1)(E) because the loss amount of
$88,264.47 exceeded $70,000 but was not more than $120,000. Additionally, the
PSR suggested a 2-level enhancement under U.S.S.G. § 3B1.3 for abuse of public
trust and a 3-level downward adjustment for acceptance of responsibility under
U.S.S.G. §§ 3E1.1(a) and (b), yielding a total offense level of 13.
Feaster had no criminal-history points and was assigned a criminal-history
category of I. Based on Feaster’s criminal-history category of I and total offense
level of 13, the guideline range was 12 to 18 months’ imprisonment. The PSR
classified all of Feaster’s offenses as felonies and determined that the statutory
maximum penalty for Counts 1-7 was 10 years’ imprisonment each and 5 years’
imprisonment for each of Counts 8-12.
II.
Before the sentencing hearing, the parties filed memoranda addressing,
among other issues, whether the language of § 641 rendered Counts 1-7 felony or
misdemeanor charges and whether U.S.S.G. § 2B1.1(b)(10)(C)’s enhancement for
“sophisticated means” was applicable.1 After hearing argument from both parties
at the sentencing hearing, the district court determined that, under § 641’s plain
language, each count was a felony in its own right since the aggregate sum from all
1
Section 2B1.1(b)(10)(C) states that “[i]f . . . the offense otherwise involved
sophisticated means, increase by 2 levels.”
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the convicted counts exceeds $1,000. As for the sophisticated-means
enhancement, the district court concluded that it was also applicable.
At the conclusion of the sentencing hearing, the district court calculated
Feaster’s total offense level to be 13 and her criminal-history category to be I,
yielding a guideline range of 12 to 18 months’ imprisonment and supervised
release of one to three years. The district court sentenced Feaster to 13 months’
imprisonment, 3 years’ supervised release, and 50 hours of community service and
ordered her to pay $88,264.47 in restitution and $1,200 in special assessments
($100 for each of Counts 1-12). 2 For the reasons set forth below, we now affirm.
III.
Feaster contends that Counts 1-7 under § 641 were improperly charged and
sentenced as felonies because each individual count was for the theft of less than
$1,000, so § 641 makes each count a misdemeanor. We conclude that Feaster’s
proposed construction of § 641 contradicts the express language of the statute.
We review de novo issues of statutory construction. United States v.
Ibarguen-Mosquera, 634 F.3d 1370, 1383 (11th Cir. 2011). Our statutory analysis
must begin with the language of the law we are considering. Owens v. Samkle
Auto. Inc., 425 F.3d 1318, 1321 (11th Cir. 2005). When the statutory language is
clear, our analysis ends with it as well. Id. Section 641 provides, in relevant part,
2
If the seven § 641 counts were misdemeanors, the special assessment for each count
would have been $25 instead of $100. See 18 U.S.C. § 3013.
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Whoever embezzles, steals, purloins, or knowingly
converts to his use . . . any record, voucher, money, or
thing of value of the United States or of any department
of agency thereof . . . [s]hall be fined under this title or
imprisoned not more than ten years, or both; but if the
value of such property in the aggregate, combining
amounts from all the counts for which the defendant is
convicted in a single case, does not exceed the sum of
$1,000, [the defendant] shall be fined under this title or
imprisoned not more than one year, or both.
18 U.S.C. § 641 (emphasis added). The plain language of this statute reflects that a
person who embezzles, steals, purloins, or converts United States property is
generally guilty of a felony. United States v. Lagrone, 773 F.3d 673, 677 (5th Cir.
2014) (“Lagrone II”). Under this language, the “but if” clause sets forth the only
exception to the general felony rule established by the first clause of the statute.
See id. According to that limited exception, separate counts of § 641 violations
constitute a misdemeanor if they are for $1,000 or less, only if the total amount
charged in all § 641 counts of conviction adds up to $1,000 or less. In other words,
the “but if” clause is a mitigation clause that reduces what is otherwise a felony to
a misdemeanor when $1,000 or less is charged in all of the § 641 counts of
conviction combined. The fact that the second clause acts as a safety valve for
thefts of a total of $1,000 or less does not somehow cause felony convictions that
do not qualify for the exception because they add up to more than $1,000 to
become misdemeanors, simply because one or more separate counts of conviction
each involves $1,000 or less. See United States v. Venti, 687 F.3d 501, 504 (1st
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Cir. 2012) (affirming defendant’s nine felony convictions where eight § 641 counts
aggregated to a total of $807.89 and the ninth count, though not for a precise
amount, exceeded $330).
The structure of § 641 also belies Feaster’s contention that each count
charging $1,000 or less constitutes a misdemeanor, regardless of the aggregate
amount charged under all § 641 counts. The aggregation provision in § 641
parallels language found in other sections within the federal Criminal Code.
Section 641 and others like it contain
a lengthy primary clause describing certain illegal
conduct and providing for felony punishment thereof; a
semicolon; and, finally, a second clause—beginning with
the word ‘but’—which refers back to the illegal conduct
described in the main clause and provides for
misdemeanor punishment in cases where the dollar value
associated with the aforementioned illegal conduct does
not exceed $1,000. . . . In other words, the above statutes
are felony criminal statutes that include a narrow
misdemeanor exception in the event that the illegal
conduct results in de minimus gain.
United States v. Tupone, 442 F.3d 145, 152 (3d Cir. 2006) (emphasis omitted)
(internal citations omitted) (interpreting 18 U.S.C. § 1920). As the Third Circuit
explained regarding this structural framework as it arises in 18 U.S.C. § 1920, it is
not “the main thrust of the entire statute to create a misdemeanor, with the latter
clause carving out a narrow category of felony liability.” Id. at 152.
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Nor does the vacated opinion in United States v. Lagrone (“Lagrone I”), 743
F.3d 122 (5th Cir.), reh’g granted and opinion rev’d, 773 F.3d 673 (5th Cir. 2014),
on which Feaster relies, help her cause. Even not considering the fact that the very
panel that issued Lagrone I unanimously vacated it in favor of the analysis in
Lagrone II, the reasoning in Lagrone I clashes with the plain language of § 641. In
Lagrone I, the Fifth Circuit expressed concern that the construction of § 641 set
forth above “permits retroactively changing the penalty for what would otherwise
be misdemeanor offenses to penalties for felonies if they are charged in the same
case as subsequent thefts that exceed $1,000 in the aggregate.” 743 F.3d at 125.
The problem with this construction of § 641 arises from the fact that it assumes
that all violations of the statute that involve amounts of $1,000 or less are
misdemeanors, regardless of the sum of the violations. But this stands in direct
contradiction to the statutory language, which makes all violations felonies initially
and reduces them to misdemeanors later only if the sum of all violations does not
exceed $1,000. In short, the statutory language and structure mandate our holding
today that each § 641 count, no matter the amount involved in the violation,
constitutes a felony unless the aggregate amount stolen or converted in all
convicted § 641 counts in the charging instrument totals $1,000 or less.
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IV.
Feaster also challenges the district court’s application of the sophisticated-
means enhancement in determining her guideline level.3 Under this enhancement,
two points are added to the defendant’s guideline level “if the offense . . . involved
sophisticated means.” U.S. Sentencing Guidelines Manual § 2B1.1(b)(10)(C)
(U.S. Sentencing Comm’n 2014).
In explaining its reasoning for imposing the sophisticated-means
enhancement, the district court stated,
The court has researched this matter and looked at the
notes in this matter. The court finds that the totality of
the scheme makes Ms. Feaster’s actions sophisticated
means. The conduct that was apparently coordinated
again is sophisticated. One particular action itself may
not be sophisticated, but when you put the totality of the
scheme together, that can make a sophistication. Over a
two-year period Ms. Feaster concealed her purchase of
gift cards by creating fictitious purchase orders. She
made fictitious representations about the quantities of the
office supplies and this resulted in her taking over
$88,000.
3
The government argues that Feaster did not raise before the district court the specific
challenges to the application of the sophisticated-means enhancement that she presents on
appeal. For this reason, the government contends, plain-error review applies to this issue. See
United States v. Shelton, 400 F.3d 1325, 1328-29 (11th Cir. 2005) (When an issue is not raised in
the district court, our review is for plain error only, meaning that the defendant must show “(1)
error, (2) that is plain, and (3) that affects substantial rights,” and if all three requirements are
satisfied, we may then choose to exercise our discretion to notice a forfeited error, “but only if
(4) the error seriously affects the fairness, integrity, or public reputation of judicial
proceedings.”) (citation and internal quotation marks omitted). We need not determine whether
Feaster forfeited her precise arguments concerning the sophisticated-means enhancement
because, as explained below, even if she did not, she has not demonstrated that the district court
clearly erred in applying the enhancement.
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Feaster asserts that the district court both committed legal error by allegedly
applying the wrong legal standard for evaluating whether she engaged in
sophisticated means to commit the offense and that the court clearly erred in
determining that her conduct involved sophisticated means.
We review de novo the district court’s legal interpretations of the Sentencing
Guidelines. United States v. Zaldivar, 615 F.3d 1346, 1350 (11th Cir. 2010). As
for the district court’s finding that sophisticated means were used, we review that
determination for clear error. United States v. Ghertler, 605 F.3d 1256, 1267 (11th
Cir. 2010) (citation omitted). Under this deferential standard of review, we will
not reverse a district court’s findings “unless we are left with a definite and firm
conviction that a mistake has been committed.” Id. (citation and internal quotation
marks omitted). After careful review, we find that the district court did not apply
the incorrect legal standard, nor did it clearly err in applying the sophisticated-
means enhancement.
We start our evaluation with the language of the guideline, considering both
the guideline and the commentary. United States v. Panfil, 338 F.3d 1299, 1302
(11th Cir. 2003). The language of the sophisticated-means guideline, in and of
itself, sheds no light on the meaning of the phrase “sophisticated means,” stating
simply that if the offense involved sophisticated means, two points are added to the
offense level.
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But the Application Note accompanying § 2B1.1(b)(10)(C) provides some
insight. It describes “sophisticated means” as follows:
means especially complex or especially intricate offense
conduct pertaining to the execution or concealment of an
offense. For example, in a telemarketing scheme,
locating the main office of the scheme in one jurisdiction
but locating soliciting operations in another jurisdiction
ordinarily indicates sophisticated means. Conduct such
as hiding assets or transactions, or both, through the use
of fictitious entities, corporate shells, or offshore
financial accounts also ordinarily indicates sophisticated
means.
Id., Application Note at 9(B). We have previously stated that the illustrations that
the Application Note sets forth are a “nonexclusive list of examples of
sophisticated means of concealment[.]” United States v. Campbell, 491 F.3d 1306,
1316 (11th Cir. 2007). In addition, we have looked to the “conduct as a whole, not
. . . each individual step,” United States v. Moran, 778 F.3d 942, 977 (11th Cir.
2015), to determine whether the “totality of the [conduct]” sufficiently supports
application of the enhancement, Ghertler, 305 F.3d at 1268.
Here, Feaster takes issue with the district court’s application of the “totality
of the scheme” standard. But as noted above, we have repeatedly endorsed this
consideration in determining whether the sophisticated-means enhancement
applies.
Nor, as Feaster argues, do the district court’s references to “conduct that was
apparently coordinated,” the total amount involved in the scheme, or the two-year
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lifespan of the scheme somehow render the district court’s application of the
“totality of the scheme” standard legal error. Feaster correctly observes that we
have used the phrase “coordinated conduct” in our caselaw to describe the actions
of more than one participant in a scheme and to support the imposition of the
sophisticated-means enhancement. See, e.g., United States v. Barrington, 648 F.3d
1178, 1199 (11th Cir. 2011) (quoting United States v. Finck, 407 F.3d 908, 915
(8th Cir. 2005)). And because Feaster was the sole participant in her crime, she
asserts that it was reversible error for the district court to rely on “coordinated
conduct” as a reason to impose the enhancement. But it is clear when the district
court’s statement is read in context that the district court was referring to the
number of different and repetitive acts that Feaster undertook during the totality of
the scheme. As discussed previously, that is a permissible consideration.
As for the district court’s references to the length of the scheme and the loss
inflicted by it, those, too, can be acceptable factors to evaluate in determining
whether the totality of the scheme employed sophisticated means. For example, in
Ghertler, though we acknowledged that Ghertler “sometimes made little or no
effort to conceal either the fact of his fraud or his identity,” we nonetheless held
that “the totality of these activities carried out over an extended period of time”
supported the imposition of the sophisticated-means enhancement. 605 F.3d at
1268 (emphasis added). In other words, when a larger amount of money is stolen
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gradually and is not discovered over a long period, the length of time for which the
conduct is not detected can reflect on the sophistication of the scheme. Regardless
of whether the defendant undertook affirmative acts of concealment, the scheme
itself may be designed in a sophisticated way that makes it unlikely to be detected,
allowing it to continue for an extended period and to impose larger losses. In
short, we find that the district court did not commit error in the standard that it
applied to evaluate whether Feaster had used sophisticated means.
Likewise, we do not find that the district court clearly erred in determining
that the facts in this case support imposition of the sophisticated-means
enhancement. Though Feaster argues that she did not participate in any of the
specific acts of concealment described in the Application Note, our caselaw
demonstrates that we have sustained application of the sophisticated-means
enhancement where defendants have engaged in concealment of their crimes in a
variety of ways not expressly stated in the Application Note.
In Campbell, for example, the defendant was convicted of tax fraud. 491
F.3d at 1308. Campbell, who served as the mayor of Atlanta, solicited and
accepted bribes from those seeking to do business with the city, and he did not
report these funds on his income-tax returns. Id. at 1309. In addition, Campbell
affirmatively sought to conceal the payments by using campaign accounts and
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credit cards issued to others to expend the improperly obtained funds. Id. at 1315.
We upheld the application of the sophisticated-means enhancement, explaining,
The fact that Campbell did not use offshore bank
accounts or transactions through fictitious business
entities is unavailing. . . . In terms of the sophistication
of the concealment, we see no difference between
“hiding assets or transactions . . . through the use of
fictitious entities, corporate shells, or offshore financial
accounts,” . . . and hiding assets or transactions through
the use of a straw man or campaign fund.
Id. at 1316 (citation omitted).
We also affirmed application of the sophisticated-means enhancement in
United States v. Clarke, 562 F.3d 1158 (11th Cir. 2009), even though the ways that
the defendant concealed his crime there did not include any of the methods set
forth in the Application Note. Like the defendant in Campbell, Clarke was also
convicted of tax fraud. See Clarke, 562 F.3d at 1160. He concealed the extent of
his income by depositing his salary into accounts that were not in his own name,
instructing his employer to make payments from these accounts to his personal
creditors, and directing his employer to pay his insurance premiums to the
insurance carriers. Id. at 1166. In upholding the application of the sophisticated-
means enhancement, we again observed that the Application Note did not limit the
ways in which a defendant could use sophisticated means to conceal his crime. Id.
at 1165; see also Moran, 778 F.3d at 977 (affirming imposition of sophisticated-
means enhancement where defendants used widespread kickbacks and the
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falsification of group therapy notes in committing healthcare fraud, even though
the defendants did not employ any methods cited in the Application Note).
Here, we cannot say that the district court clearly erred in holding that the
totality of the scheme evidenced sophisticated means. First, Feaster used her
inside information and her position at the VA to perpetrate the fraud. See
Barrington, 648 F.3d at 1199 (affirming the district court’s consideration of the
defendants’ use of inside information as a factor supporting imposition of the
sophisticated-means enhancement). Neither an outsider nor most other employees
of the VA could have carried out the crime that Feaster committed. Second, each
time that Feaster stole VA funds, she performed at least three affirmative acts of
concealment: (1) preparing a fraudulent purchase order to obtain approval in the
first place to use the Purchase Card, (2) buying gift cards with the Purchase Card,
thereby building in another layer of concealment similar to the straw man or
accounts under other names used in Campbell and Clarke, to obscure her
fraudulent personal purchases, and (3) making fictitious entries in the VA’s system
to reconcile the original purchase order with the amount of money that she charged
to the Purchase Card to obtain payment for the charges that she fraudulently
incurred. Third, Feaster repeated these same steps numerous times during the life
of the scheme. Fourth, apparently because of the design of the scheme and
Feaster’s proficiency in running it, the scheme went undetected for two years.
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In light of our precedent and based on this record, we cannot say that we are
“left with a definite and firm conviction that a mistake [was] committed” when the
district court applied the sophisticated-means enhancement. See United States v.
Crawford, 407 F.3d 1174, 1177 (11th Cir. 2005) (quotation marks and citation
omitted). We therefore affirm the district court’s imposition of the enhancement.
V.
We hold that the district court did not err in determining that each of
Feaster’s § 641 convictions constitutes a felony since the aggregate amount stolen
in the counts of conviction exceeded $1,000. Nor did the district court commit
either legal error or clear error in finding that the sophisticated-means enhancement
applied to Feaster’s offense conduct. For these reasons, the district court’s order is
AFFIRMED.
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