United States v. Timothy Shirley , 720 F.3d 659 ( 2013 )

United States Court of Appeals
For the Eighth Circuit
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No. 12-3893
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Timothy H. Shirley
lllllllllllllllllllll Defendant - Appellant
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No. 12-3956
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United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Matthew K. Shirley
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the District of Nebraska - Omaha
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Submitted: June 13, 2013
Filed: July 11, 2013
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Before COLLOTON, GRUENDER, and BENTON, Circuit Judges.
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GRUENDER, Circuit Judge.
A jury convicted Matthew and Timothy Shirley of conspiracy to defraud the
United States, in violation of 18 U.S.C. § 371, and theft of government property, in
violation of 18 U.S.C. § 641. Timothy also was convicted of Social Security fraud,
in violation of 42 U.S.C. § 408. Matthew and Timothy appeal their convictions,
claiming there was insufficient evidence to support the jury’s verdict. Timothy also
appeals his sentence. We affirm.
We state the facts in the light most favorable to the jury’s verdict. See United
States v. Moya, 690 F.3d 944, 947 (8th Cir. 2012). After having back surgery in
2003, Timothy Shirley filed an application for Social Security Disability Insurance
Benefits. During the application process, Timothy acknowledged that any change in
his ability to work could affect his eligibility for benefits, and he similarly
acknowledged his responsibility to notify the Social Security Administration (“SSA”)
in the event he became able to work. The SSA processed Timothy’s application and
determined in January 2004 that he qualified for a monthly disability payment of
$1,229. If at any time the SSA determined that Timothy was able to engage in
“substantial gainful activity,” he would no longer be eligible for Social Security
disability benefits. In 2010, the SSA considered a person able to engage in
“substantial gainful activity” if he earned more than $1,000 per month. When
determining a person’s eligibility for benefits, the SSA considers fringe benefits, such
as employer-provided housing and an employer’s payments to an employee’s
creditors, to be income.
As early as the spring of 2004, Timothy began working for Mare
Transportation, a Nebraska City, Nebraska trucking company owned by his brothers,
Matthew and Robert, and their wives. At Mare, Timothy was given his own office
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and primarily was responsible for auditing drivers’ log books. Timothy also
dispatched trucks and, on occasion, drove loads for Mare to locations as far as
Wisconsin and Arkansas. Some weeks, Timothy was at Mare’s offices seven days a
week.
Timothy received two forms of compensation for his work. Matthew
frequently gave Timothy large sums of cash, and Robert issued company checks to
pay Timothy’s bills. According to Robert, Mare paid Timothy “a minimum of 2,500
dollars each month” in addition to paying his “credit card bills, his utility bills, his
and his children’s cellular telephone bills[,] . . . . and college [t]uition and book fees
for his children.” After Robert left Mare in 2008 and the company reformed as Frits
Transportation, Matthew continued to give Timothy cash payments and issue
company checks to pay Timothy’s bills. Several Mare and Frits employees knew that
Timothy was on disability and also were aware that Matthew paid him in cash.
Despite receiving substantial income from Mare and Frits, Timothy continued to
accept disability payments and never reported his earnings to the SSA.
In January 2009, the SSA received a report that Timothy was earning $1,000
per week for his work at Mare and Frits. The SSA’s Inspector General then opened
an investigation into Timothy’s and Matthew’s activities. On May 20, 2011, a grand
jury returned an indictment charging Matthew and Timothy with conspiracy to
defraud the United States and theft of government property. The indictment also
charged Timothy with Social Security fraud. After an eight-day trial, a jury found
Matthew and Timothy guilty on all counts. The district court1 sentenced Matthew to
12 months and one day’s imprisonment and Timothy to 21 months’ imprisonment.
Timothy and Matthew appeal their convictions, arguing that the Government
presented insufficient evidence for a jury to find them guilty beyond a reasonable
1
The Honorable Laurie Smith Camp, Chief Judge, United States District Court
for the District of Nebraska.
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doubt. “We review the sufficiency of the evidence de novo, viewing evidence in the
light most favorable to the government, resolving conflicts in the government’s favor,
and accepting all reasonable inferences that support the verdict.” United States v.
Brooks, 715 F.3d 1069, 1080-81 (8th Cir. 2013) (quoting United States v. Miller, 698
F.3d 699, 702 (8th Cir. 2012)). “[W]e will reverse only if no reasonable jury could
have found the defendant guilty beyond a reasonable doubt.” Id. at 1081 (alteration
in original) (quoting United States v. Espinosa, 585 F.3d 418, 423 (8th Cir.2009)).
With respect to his conspiracy conviction, Matthew argues that the Government
presented insufficient evidence that he knowingly participated in a conspiracy to
defraud the United States. See United States v. Campbell, 848 F.2d 846, 851 (8th Cir.
1988) (“A conspiracy under 18 U.S.C. § 371 consists of an agreement to defraud the
United States along with an act by one or more of the conspirators to effect the object
of the conspiracy.”); see also United States v. Sweeney, 611 F.3d 459, 468 (8th Cir.
2010) (“To prove conspiracy under [18 U.S.C.] § 371, the Government must show
beyond a reasonable doubt that the [defendants] knowingly entered into an agreement
or reached an understanding to commit a crime . . . .” (alterations in original) (quoting
United States v. Farrell, 563 F.3d 364, 376 (8th Cir. 2009))). With respect to his
conviction for theft of government property, Matthew challenges the sufficiency of
the evidence that he intentionally stole United States government property. See
United States v. McCorkle, 688 F.3d 518, 521 n.3 (8th Cir. 2012) (“To obtain a
conviction at trial for theft of government property, the government must prove
beyond a reasonable doubt that the defendant . . . voluntarily, intentionally, and
knowingly stole or converted money to his own use or to the use of another . . . .”).
Matthew claims that he and other family members encouraged Timothy to
spend time at Mare and Frits to alleviate his depression and that the payments
Timothy received were not compensation for work activity. Instead, he argues that
Matthew and other family members gave Timothy money to ease the financial
burdens that accompanied his disability. Viewing the evidence in the light most
favorable to the verdict, however, the Government established both Matthew’s
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knowing participation in a conspiracy to defraud the United States and his intent to
steal government funds for the use of Timothy. Several Mare employees testified
about the cash payments Timothy received, with one recalling, “[Matthew] said he
had to pay Tim that way . . . because he couldn’t leave no paper trail for Tim being
on disability.” Robert’s wife Maria once asked Matthew why Timothy was receiving
cash payments, and Matthew replied, “because he’s getting Social Security and he’s
going to be in trouble, damn it.” Numerous exhibits also demonstrated that Matthew
signed Mare and Frits company checks to pay Timothy’s personal credit card bills,
his mobile phone bills, and his utility bills.
A reasonable jury could conclude from this evidence that Matthew knew
Timothy’s eligibility for disability benefits was contingent on his inability to work
and that he intended to conceal Timothy’s income from the SSA. Whenever Matthew
paid Timothy directly, he did so in cash. In contrast, when paying Timothy’s bills by
company check, Matthew made the checks payable to Timothy’s creditors, not to
Timothy. This evidence also supports a finding that Matthew intended to join a
conspiracy with Timothy and that the conspiracy’s purpose was to steal government
property—the Social Security disability payments Timothy received while gainfully
employed by Mare and Frits. See Sweeney, 611 F.3d at 468 (“A formal agreement is
not required to create a conspiracy, and the existence of a conspiracy can be proved
by direct or circumstantial evidence.” (quoting United States v. Williams, 534 F.3d
980, 985 (8th Cir. 2008)). Accordingly, we conclude that the Government presented
sufficient evidence for a reasonable jury to find beyond a reasonable doubt that
Matthew knowingly participated in a conspiracy to defraud the United States and that
he intended to steal government property.
Matthew also challenges his theft of government property conviction by
arguing that the Government failed to establish that the Social Security funds
Timothy received were a “thing of value of the United States.” See § 641 (“Whoever
embezzles, steals, purloins, or knowingly converts . . . any record, voucher, money,
or thing of value of the United States . . . .”). He claims that Timothy’s disability
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payments came from a trust fund that belongs to the individuals who fund it, not the
United States government.
We reject Matthew’s argument. In Overton v. United States, 619 F.2d 1299
(8th Cir. 1980), we determined that Medicare payments, which the government makes
from the Federal Hospital Insurance Trust Fund, are not “wholly independent” of the
general revenues of the United States Treasury. In so holding, we explained that
[a]lthough . . . the Federal Hospital Insurance Trust Fund[] is a
bookkeeping entity conceptually collateral to the unfunded general
revenues . . . the trust fund consists of appropriations from those general
revenues, 42 U.S.C. § 1395i, and is in any case the creation of the
government’s taxing and spending power; it is not wholly independent
of the government itself.
Id. at 1307. We found the distinction between trust funds, including the Federal
Hospital Insurance Trust Fund and the Federal Old-Age and Survivors’ Insurance
Trust Fund, and general revenues of the United States Treasury to be “unsound” and
“artificial.” Id. at 1308.
The Federal Disability Insurance Trust Fund is no different. Like the Federal
Hospital Insurance Trust Fund in Overton, the Federal Disability Insurance Trust
Fund is funded by appropriations from the Treasury’s general revenues. See 42
U.S.C. § 401(b). Thus, although the Federal Disability Insurance Trust Fund is a
“bookkeeping entity” conceptually separate from the general revenues of the United
States Treasury, it is a “creation of the government’s taxing and spending power” that
is not fully independent of the general revenues. See Overton, 619 F.2d at 1307. It
follows that Timothy’s disability payments, which were paid from the Federal
Disability Insurance Trust Fund, were not fully independent of the general revenues
of the United States Treasury. We are therefore convinced that the Social Security
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payments Timothy received were a “thing of value of the United States.”2 See, e.g.,
United States v. O’Kelley, 701 F.2d 758, 760 (8th Cir. 1983) (per curiam) (holding
that an unendorsed Treasury check remained a “thing of value of the United States”
even after being remitted by the Government to the named payee). We affirm
Matthew’s convictions.3
Timothy argues that the Government presented insufficient evidence to support
his convictions on all three counts solely on the basis that “the linkage between
Timothy’s presence and activities at the company and compensation for it came from
unindicted coconspirators and cooperating witnesses which should not have been
credited by a reasonable jury.” He claims that several of the Government’s witnesses
were convicted felons who were not credible, that the Government’s evidence
regarding Timothy’s employment with Mare and Frits was “not conclusive,” and that
the documentary exhibits did little to bolster the testimony of the witnesses.
As an appellate court, it is well established that we do not second guess the
jury’s findings of fact. See United States v. Tarnow, 705 F.3d 809, 814 (8th Cir.
2013) (“It is the function of the jury, not an appellate court, to . . . judge the
credibility of witnesses. Such credibility findings are virtually unreviewable on
appeal.” (quoting United States v. Mann, 701 F.3d 274, 298 (8th Cir. 2012))); United
States v. White, 675 F.3d 1106, 1109 (8th Cir. 2012) (“Attacks on the sufficiency of
2
Although we have never directly addressed in the criminal context the
question of whether payments from the Federal Disability Insurance Trust Fund
constitute a “thing of value of the United States,” we have upheld § 641 convictions
involving the theft or conversion of Social Security payments. See United States v.
McCorkle, 688 F.3d 518 (8th Cir. 2012); United States v. Spear, 734 F.2d 1 (8th Cir.
1984); see also United States v. Gill, 193 F.3d 802, 804 (4th Cir. 1999) (holding that
Social Security funds “remained the property of the United States” even after being
deposited into a third-party’s bank account).
3
In his reply brief, Matthew also argues for the first time that 18 U.S.C. § 641
is unconstitutionally vague. We do not consider arguments first raised in a reply
brief. See United States v. Chalupnik, 514 F.3d 748, 752 n.1 (8th Cir. 2008).
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the evidence that call upon this court to scrutinize the credibility of witnesses are
generally not an appropriate ground for reversal.” (quoting United States v. McKay,
431 F.3d 1085, 1094 (8th Cir. 2005))). In this case, we similarly “decline to
substitute our own judgment for that of the jury.” See White, 675 F.3d at 1109.
Government witnesses testified that Timothy spent up to seven days a week at Mare
and Frits and received cash payments, and documentary evidence established that
Matthew issued company checks payable to Timothy’s personal creditors.
“[V]iewing the facts most favorably to the verdict,” Moya, 690 F.3d at 949, a
reasonable jury could find that Timothy was gainfully employed by Mare and Frits.
Because Timothy offers no other grounds for reversal, we affirm his convictions.
Timothy also appeals his sentence, claiming that it is longer than necessary to
achieve the goals of sentencing. He argues that proper consideration of the 18 U.S.C.
§ 3553(a) sentencing factors would result in a below-guideline sentence. “Because
[Timothy] does not challenge the district court’s calculation of the advisory
sentencing guidelines range, we review his sentence for an abuse of discretion and
note that a sentence within the guidelines is presumptively reasonable on appeal.”
United States v. Torres, 552 F.3d 743, 747-48 (8th Cir. 2009).
The district court calculated Timothy’s advisory sentencing guideline range to
be 21 to 27 months’ imprisonment. Prior to sentencing, Timothy moved for a
departure or variance from the advisory guidelines and requested a sentence of
probation. After considering the § 3553(a) factors, the district court acknowledged
that a probationary sentence was statutorily possible but nevertheless elected to
sentence Timothy to the low end of the advisory guideline range in order to promote
both general and specific deterrence. Because the record indicates that the district
court considered the § 3553(a) factors and did not clearly err in weighing them, see
United States v. Haack, 403 F.3d 997, 1004 (8th Cir. 2005), we conclude that
Timothy’s sentence is not unreasonable and that the district court did not abuse its
discretion. See United States v. Feemster, 572 F.3d 455, 461-64 (8th Cir. 2009) (en
banc) (“[I]t will be the unusual case when we reverse a district court
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sentence—whether within, above, or below the applicable Guidelines range—as
substantively unreasonable.” (quoting United States v. Gardellini, 545 F.3d 1089,
1090 (D.C. Cir. 2008))).
Accordingly, we affirm the convictions and Timothy’s sentence.
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