United States v. Ngozi Pole , 741 F.3d 120 ( 2013 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 6, 2013 Decided December 20, 2013
No. 12-3031
UNITED STATES OF AMERICA,
APPELLEE
v.
NGOZI POLE,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cr-00354-1)
Beverly G. Dyer, Assistant Federal Public Defender, argued
the cause for appellant. With her on the briefs was A. J.
Kramer, Federal Public Defender. Tony Axam Jr., Assistant
Federal Public Defender, entered an appearance.
Sonja M. Ralston, Attorney, U.S. Department of Justice,
argued the cause for appellee. With her on the brief were Mythili
Raman, Acting Assistant Attorney General, and Tracee Plowell,
Trial Attorney.
Before: TATEL and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
2
TATEL, Circuit Judge: Imagine that you oversee the budget
of a large Senate office, and you’re in a bind. Your boss, the
Senator, has directed you to ensure that the budget is spent to
zero every fiscal year, but the fiscal year is nearing its end, the
office is on track to run a significant surplus, and the chief of
staff seems unwilling to focus on the problem. How should you
handle the situation? Appellant, who lived this hypothetical
while serving as former Senator Edward M. Kennedy’s office
manager, made the wrong choice. In an effort to spend down
surpluses and simultaneously compensate hard work, Appellant
awarded himself large unauthorized bonuses. For his efforts, he
was convicted of five counts of wire fraud and one count of
theft. On appeal, he argues that the district court wrongly
excluded evidence, that he received ineffective assistance of
trial counsel, and that the district court’s restitution order was
excessive. Although we reject Appellant’s evidentiary
arguments, we remand his colorable ineffective assistance
claims and vacate and remand the restitution order because
neither the jury nor the district court made factual findings
sufficient to support the order.
I.
Appellant Ngozi Pole began serving as Senator Edward M.
Kennedy’s Washington, D.C. office manager in 1998 and
remained in that position until 2007. During that time, Pole
served under four chiefs of staff—Gerard Kavanaugh, Mary
Beth Cahill, Danica Petroshius, and Eric Mogilnicki—and one
interim chief of staff. Despite the government’s claim that “Pole
[m]anaged the [o]ffice, [n]ot the [b]udget,” Appellee’s Br. 3, his
role as office manager went far beyond ensuring that Senator
Kennedy’s staff had an adequate supply of pencils. As part of
his human resources portfolio, Pole was responsible for
submitting “payroll action authorization” forms (PAAs), which
raised or lowered the salaries of office employees. According to
3
the government, Pole needed approval from Kennedy or the
chief of staff for any salary adjustments, but neither the Senator
nor the chiefs of staff regularly reviewed PAAs prior to
submission. As part of his budget portfolio, Pole served as the
office’s point of contact for the Senate Disbursing Office, which
sent periodic updates about how much money the office had left
to spend. Because Senator Kennedy wanted the office to spend
every last cent every fiscal year, Pole was responsible for
keeping track of how much money remained and for making
recommendations about how to reach the magic zero-balance
point.
Near the end of fiscal year 2001, the office was in danger of
running a significant deficit. Though the office ultimately ended
the year in the black, the deficit scare led Cahill, then chief of
staff, to spend frugally in fiscal year 2002 even though the office
also received an increased budget allocation that year. This
combination of frugality and increased funds led to a surplus at
the end of fiscal year 2002.
With the office on track to run another surplus in fiscal year
2003, Pole devised a plan to spend down the budget and make a
little something for himself. His plan took advantage of a
Kennedy office practice, condoned by the Senator and chiefs of
staff, designed to circumvent an official Senate ban on employee
bonuses. In order to award annual bonuses notwithstanding the
ban, Kennedy’s office would, with the Senator’s or the chief of
staff’s approval, submit PAAs that increased an employee’s
salary for a period of time—two or three weeks or even a
month—sufficient to produce the intended bonus. In order to
award exit bonuses, the office took two approaches: employees
targeted for bonuses were kept on the payroll either for a few
weeks following their departure or for an indefinite period at a
salary just high enough to cover the employee contribution for
Senate-subsidized health care. Pole used his role in the PAA
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submission process to grant various staffers—most notably
himself—bonuses that neither the Senator nor the chief of staff
authorized. Pole continued awarding these bonuses until January
2007 when he gave himself an exit bonus before leaving to take
a new position as Senator Sherrod Brown’s deputy chief of staff.
In total, Pole awarded himself $77,608.86 in unapproved
bonuses.
After Pole casually mentioned his exit bonus to Mogilnicki,
chief of staff at the time, Mogilnicki became suspicious and
requested all payroll records for all employees. Realizing the
extent of Pole’s scheme, Mogilnicki contacted Gregory Craig,
former senior aide and counselor to Senator Kennedy. Together
they confronted Pole. According to Craig, Pole defended his
actions, claiming that he had been denied raises he “felt he had
been entitled to” and could have earned more in the private
sector. Trial Tr. 58 (Jan. 25, 2011) (testimony of Gregory
Craig). Craig and Mogilnicki referred the matter to the FBI, and
Senator Brown dismissed Pole.
Following the FBI investigation, Pole was charged with five
counts of wire fraud in violation of 18 U.S.C. § 1343 and one
count of theft of government property worth more than $1,000
in violation of 18 U.S.C. § 641. Although the indictment alleged
a scheme to defraud dating from July 2003, the five-year statute
of limitations prevented the government from charging fraud for
wire transfers occurring prior to December 15, 2004. At trial,
the basic dispute was over whether Pole knew he needed
authorization to award bonuses. Given Senator Kennedy’s
instruction to spend the budget to zero and the absence of clear
rules and procedures, Pole maintained that he had implicit
authority to spend down the budget however he saw fit.
Contesting this account, the government leaned on Pole’s own
statements, as well as testimony from all five chiefs of staff,
indicating that Pole knew that he needed approval for salary
5
adjustments. After the jury convicted Pole on all charges, the
district court sentenced him to twenty months in prison and
ordered him to pay $75,042.37 in restitution (the full $77,608.86
the government asserts he stole minus some $2,500 that
Mogilnicki managed to recover through the Senate Disbursing
Office).
On appeal, Pole challenges three evidentiary rulings, argues
that he received ineffective assistance of counsel, and insists
that the district court miscalculated restitution. We consider
each issue in turn.
II.
We begin with Pole’s argument that the district court
wrongly excluded three pieces of testimonial evidence. When a
defendant has preserved his objection to a district court’s
evidentiary ruling, we review that ruling for abuse of discretion.
United States v. Alexander, 331 F.3d 116, 121 (D.C. Cir. 2003).
We review unpreserved objections for plain error. United States
v. Thompson, 279 F.3d 1043, 1048–49 (D.C. Cir. 2002). Either
way, if we determine that the district court has erred in
excluding particular evidence, we will reverse the conviction on
that basis only if the error was not harmless. United States v.
Baugham, 449 F.3d 167, 183 (D.C. Cir. 2006) (plain error);
United States v. Coumaris, 399 F.3d 343, 347–50 (D.C. Cir.
2005) (abuse of discretion).
Pole first challenges the district court’s refusal to permit
him to testify about the contents of certain budget memos. The
issue arose when Pole testified that he “let Ms. Cahill know that
the surplus numbers were high [in fiscal year 2002].” Trial Tr.
67 (Jan. 26, 2011 Afternoon Session). Noting that some budget
memos he sent Cahill had been entered into evidence, Pole then
attempted to testify that the “place where I traditionally would
put [the projected surplus] number is redacted so it’s hard to
6
see.” Id. The government objected, arguing that Pole should not
be allowed to testify about redacted contents. Sustaining the
objection, the district court stated only that the redacted contents
are “not a part of the evidentiary record.” Id. at 68–69.
Assuming the district court erred in excluding this
testimony, and even if, as Pole insists, that error was of
“constitutional dimension,” “it appears beyond a reasonable
doubt that the error complained of did not contribute to the
verdict obtained.” United States v. Powell, 334 F.3d 42, 45
(D.C. Cir. 2003) (quotation marks omitted). Pole was allowed to
testify that he kept chiefs of staff informed about budgetary
matters and in fact did testify that he “let Ms. Cahill know that
the surplus numbers were high.” Thus, if the jury found that
Pole generally lacked credibility, it would have had no reason to
believe his assertions about what lay under the redactions; if the
jury found Pole generally credible, it would have learned
nothing new from the excluded testimony. Since any error in
excluding this testimony was clearly harmless, we have no need
to address the government’s dubious assertion that Pole failed to
preserve this challenge, see Fed. R. Evid. 103(a)(2), or its
argument—advanced for the first time on appeal—that Pole’s
testimony would have violated the Best Evidence Rule, see Fed.
R. Evid. 1002; cf. United States v. Davis, 596 F.3d 852, 858 n.4
(D.C. Cir. 2010) (noting that the government’s failure to make a
“best evidence objection” at the district court deprived the
defendant of an opportunity to demonstrate that a Best Evidence
Rule exception applied).
Pole next challenges the district court’s refusal to admit
testimony from former Financial Clerk of the Senate Kenneth
Wineman about a telephone conversation Wineman had with
Kennedy. Wineman was prepared to testify that at some
undetermined time he and Kennedy discussed the office budget
and several payroll matters. According to Wineman, the Senator
7
indicated that Wineman could pass along follow-up information
to Pole for delivery to Kennedy. Questioning the relevance of
this testimony, Trial Tr. 150–53 (Jan. 25, 2011), the district
court ultimately excluded it because it was duplicative of other
evidence and likely to invite speculation. Id. at 154–55.
Under Federal Rule of Evidence 403, the district court
“may exclude relevant evidence if its probative value is
substantially outweighed by a danger of . . . unfair prejudice,
confusing the issues, misleading the jury, undue delay, wasting
time, or needlessly presenting cumulative evidence.” Fed. R.
Evid. 403; see also Henderson v. George Washington
University, 449 F.3d 127, 133 (D.C. Cir. 2006) (noting that our
review of Rule 403 rulings is highly deferential). According to
Pole, Wineman’s testimony had significant probative value
because it would have: (1) helped demonstrate that “Kennedy’s
office functioned as an art, not as a science”; (2) “countered
government witness testimony that Pole failed to keep the chiefs
of staff informed”; and (3) reflected Kennedy’s faith in Pole.
Appellant’s Br. 47–48 (internal quotation marks omitted). But
Wineman could not recall when the call occurred, Trial Tr. 161–
62 (Jan. 25, 2011), and Pole’s counsel indicated that he would
not ask Wineman what specifically was discussed or whether he
provided any follow-up information to Pole, id. at 153–55.
Given this, the district court hardly abused its discretion in
determining that the limited probative value of the testimony
was substantially outweighed by the distraction that might have
resulted had the jury been invited to speculate about what
Kennedy said to Wineman and what, if anything, Wineman gave
Pole to deliver to Kennedy.
Pole also challenges the district court’s refusal to allow
Wineman to testify about a telephone conversation with Pole
that followed his conversation with Kennedy. Wineman was
prepared to testify that Pole, after hearing about Wineman’s
8
conversation with Kennedy, indicated that he was “surprised
that [Kennedy] wanted to get involved, but certainly we will do
whatever he wants us to do.” Trial Tr. 166 (Jan. 25, 2011).
Doubtful about the relevance of this testimony, the district court
ultimately excluded it as inadmissible hearsay. Id. at 169.
Pole insists that the testimony would have demonstrated his
can-do spirit and willingness to comply with instructions. And
perhaps Pole’s expression of surprise and willingness to comply
would have been probative of his state of mind had he and
Wineman discussed some matter relevant to this case. But
because Wineman’s testimony about the Kennedy call was
permissibly excluded, the jury would have had no way of
knowing whether Pole’s expression of surprise and willingness
to comply referred to spending down the budget (clearly
relevant), ensuring that PAAs were signed with blue ink (clearly
irrelevant), or something in between. Under these
circumstances, even if the district court erred in excluding this
testimony on hearsay grounds, and even if that error was
constitutional in nature, we are confident beyond a reasonable
doubt that the error had no effect on the outcome of the trial.
III.
Next, Pole maintains that he received ineffective assistance
of trial counsel. Specifically, he alleges that trial counsel should
have (1) produced unredacted copies of Pole’s budget memos;
(2) “through documentary evidence and additional discovery or
otherwise” demonstrated that “Pole routinely issued exit
bonuses without specific chief of staff approval”; (3)
“demonstrate[d] that Cahill instructed Pole to spend the budget
to zero, or to impeach her testimony that she did not do so”; and
(4) attempted to impeach Petroshius by introducing evidence
about employee bonuses she denied issuing and by
“question[ing] Petroshius regarding a memoranda from Pole”
9
containing budgetary information she claimed never to have
received. Appellant’s Br. 53–56.
To prevail on his ineffective assistance of counsel claims,
Pole
must show two things: that his lawyer made errors “so
serious that counsel was not functioning as the
‘counsel’ guaranteed the defendant by the Sixth
Amendment,” and that counsel’s deficient performance
was prejudicial, i.e., that there is a “reasonable
probability that, but for counsel’s unprofessional
errors, the result of the proceeding would have been
different.”
United States v. Gaviria, 116 F.3d 1498, 1512 (D.C. Cir. 1997)
(quoting Strickland v. Washington, 466 U.S. 668, 687, 694
(1984)). In this Circuit, we generally remand “colorable
claim[s]” of ineffective assistance to the district court to make
any necessary factual findings, United States v. Moore, 651 F.3d
30, 85, 87 (D.C. Cir. 2011), “unless the record conclusively
demonstrates that the defendant is or is not entitled to relief,”
United States v. Fareri, 712 F.3d 593, 595 (D.C. Cir. 2013)
(internal quotation marks omitted). “We do not reflexively
remand, but neither will we hesitate to remand when a trial
record is insufficient to assess the full circumstances and
rationales informing the strategic decisions of trial counsel.”
United States v. Mohammed, 693 F.3d 192, 202 (D.C. Cir. 2012)
(internal citations and quotation marks omitted).
Here, Pole has alleged errors that, taken together, qualify as
“colorable,” requiring remand under this forgiving standard.
Had Pole’s counsel introduced unredacted memos
demonstrating that Pole kept Cahill informed about surpluses,
the jury might have found Pole a more credible witness. Had
Pole’s counsel been able to demonstrate that Pole had authority
10
to issue exit bonuses without prior approval, Pole might have
avoided conviction on the wire fraud count arising from his exit
bonus and even convinced the jury that he reasonably believed
he had authority to award himself unapproved annual bonuses.
Had Pole’s counsel successfully impeached Cahill and
Petroshius, Pole might have undermined their testimony that he
needed their approval before making salary adjustments.
To be clear, we conclude only that Pole’s claims of
ineffective assistance are colorable, not that he has likely
demonstrated ineffective assistance. Indeed, the government
offers several plausible arguments suggesting that Pole has
shown neither error nor prejudice. But given Pole’s allegations,
and given that the trial record neither indicates why trial counsel
made particular strategic decisions nor refutes the possibility
that Pole suffered prejudice, we believe that the safest course of
action is to allow the district court to address the claims—and
the government’s responses—in the first instance. We leave it to
the wise judgment of the district court to decide whether to hold
an evidentiary hearing.
IV.
Finally, Pole argues that the district court improperly
inflated the amount of restitution he owes. Relying on the
presentence report, the district court ordered Pole to pay the
government $75,042.37, Pole’s total gains from all unauthorized
bonuses he awarded himself minus the small amount Mogilnicki
managed to recover. According to Pole, he should have been
required to pay back only $11,233.24, the total gains from the
five unauthorized bonuses underlying the counts of conviction
minus what Mogilnicki recovered. We review restitution orders
for abuse of discretion and any factual findings underlying those
orders for clear error. United States v. Bryson, 485 F.3d 1205,
1208 (D.C. Cir. 2007).
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In their briefs, the parties primarily debate whether, under
the Mandatory Victim Restitution Act, 18 U.S.C. § 3663A,
courts can order restitution for all losses resulting from a scheme
to defraud, where, as here, some of those losses occurred outside
the statute of limitations. But we need not address this question
because the restitution order in this case suffers from a more
fundamental defect. Even though record evidence might have
supported a scheme to defraud extending to conduct outside the
statute of limitations, nothing in the record supports the
government’s assertion that the jury or district judge actually
found a scheme of such duration.
As for the jury, neither the court’s instructions nor the
verdict form indicates that the jury found a scheme to defraud
that included conduct outside the statute of limitations. The
instructions stated that “[i]t is not necessary that the government
prove all of the details alleged concerning the precise nature and
purpose of the scheme.” Final Jury Instructions 20. Even though
the instructions went on to state that “[w]hat must be proved . . .
[is] a scheme to defraud substantially the same as the one
alleged in the indictment,” id., Pole asserts, without
contradiction, that the jury received an edited version of the
indictment that included no references to pre-statute of
limitations conduct. Moreover, the verdict form listed five
counts of wire fraud and asked the jury to determine for each
whether “[o]n or about [the date of a charged wire transfer] . . .
defendant executed and attempted to execute the scheme and
artifice to defraud.” Verdict Form 1–3 (emphasis added).
Nothing in this language suggests that in returning a verdict of
guilty the jury necessarily found a scheme to defraud predating
the earliest charged wire transfer. As a result, the jury’s decision
to convict Pole provides no factual basis for the restitution
order.
12
As for the district court, because it failed to make any
factual findings regarding the duration of the scheme, we have
no occasion to consider whether, under Apprendi v. New Jersey,
530 U.S. 466 (2000), a jury must find the facts justifying the
restitution amount, or whether the jury’s verdict on the offense
of conviction authorizes the district court to impose—in
accordance with statutory requirements—an amount of
restitution justified by its own findings. Cf. Bryson, 485 F.3d at
1208 (“The Government must prove at sentencing that its
proposed restitution figure is supported by a preponderance of
the evidence.” (citing 18 U.S.C. § 3664(e)). As Pole’s counsel
sought to point out at sentencing, see Trial Tr. 76 (Mar. 30,
2012), this Court has interpreted Federal Rule of Criminal
Procedure 32(i)(3)(B) to require the district court, at a
minimum, to make specific factual findings resolving any
“disputed portion of the presentence report or other controverted
matter.” Fed. R. Crim. P. 32(i)(3)(B); see also United States v.
McCants, 434 F.3d 557, 561–62 (D.C. Cir. 2006). To satisfy this
requirement, the district court must provide “something more
than conclusions.” Id. at 562 (internal quotation marks omitted).
“The fact-finding requirement serves more than the purely
ministerial function of transmitting accurate information to the
Bureau of Prisons and Parole Commission; more importantly, it
protects a defendant’s due process rights to be sentenced on the
basis of accurate information, and facilitates appellate review by
furnishing a clear record of the resolution of disputed facts.” Id.at 561–62 (internal quotation marks omitted).
Here, Pole clearly contested the duration of the scheme.
See, e.g., Defendant’s Surreply to the Government’s Sentencing
Memorandum at 24–25, 29–30. But without resolving this
factual dispute, the district court adopted the presentence
report’s recommendation:
13
I was the trial judge. I heard from Day One to the end
of this trial, I heard all the testimony and there’s
nothing inconsistent with the evidence adduced at trial
in the presentence report, and the Court firmly believes
that what’s set forth in those paragraphs is indeed the
factual predicate necessary for the Court to find as a
matter of fact the amount of . . . restitution.
Trial Tr. 3/30/12 at 76–77. In our view, this statement is too
conclusory to satisfy the requirements of Rule 32(i)(3)(B), as
nothing in it resolves the factual assertions Pole raised. Thus,
even if the district court could have constitutionally imposed
restitution on the basis of its own findings (by a preponderance
of the evidence) that the scheme to defraud included conduct
outside the statute of limitations, it failed to do so.
The government argues that vacating the restitution order
would conflict with the approach taken in other circuits, which
have held that “restitution may be ordered for all losses caused
by a scheme and that the scheme’s scope encompasses at least
what is outlined in the charging document.” Appellee’s Br. 45.
In support, however, the government cites only cases where
courts upheld restitution orders that, unlike here, rested on
adequate findings, see, e.g., United States v. Brown, 665 F.3d
1239, 1253 (11th Cir. 2011) (upholding a restitution order
because district court fact-finding provided an adequate factual
basis), or vacated restitution orders that, as here, suffered from
factual or legal defects, see, e.g., United States v. Adams, 363
F.3d 363, 366–68 (5th Cir. 2004) (vacating a restitution order
because it was inconsistent with the “mutual understanding of
the parties”). Moreover, insisting that restitution orders have an
adequate factual basis imposes no significant limitation on
restitution. The government can always ask the district court to
craft a verdict form that ensures the jury is able to make factual
findings sufficient to support a particular amount of restitution,
14
or, assuming no Apprendi problem, urge the court to resolve
factual disputes at sentencing instead of simply relying on the
presentence report.
V.
For the foregoing reasons, we reject Pole’s evidentiary
challenges, remand Pole’s ineffective assistance claims, and
vacate and remand the restitution order for further proceedings
consistent with this opinion.
So ordered.