On Appeal from the United States District Court for the Eastern District of Pennsylvania District Court No. 03-CR-00169 District Judge: The Honorable Jan E. DuBois.
The opinion of the court was delivered by: Smith, Circuit Judge
Before: SLOVITER, SMITH, and STAPLETON, Circuit Judges.
Albert Tupone appeals his felony conviction for making false representations in connection with the receipt of federal workers' compensation benefits, a violation of 18 U.S.C. § 1920. Although Tupone and the Government agree that this case should be remanded for resentencing under the Supreme Court's decision in United States v. Booker, 543 U.S. 220 (2005), a conclusion with which we agree, we must decide two remaining issues. The first is whether the District Court erred in instructing the jury on the threshold dollar amount for a felony conviction under § 1920, and in holding that the jury's verdict constituted felony, rather than misdemeanor convictions. The second is whether the District Court erred in finding that the total amount of benefits Tupone received as a result of false applications for workers' compensation benefits constituted the "loss amount" under § 2B1.1 of the United States Sentencing Guidelines (the "Guidelines"). Because we conclude that the District Court's interpretation of § 1920 was sound, we will affirm Tupone's conviction. Because we also conclude, however, that the "loss amount" fixed by the Court was incorrect under the Guidelines, we will vacate the sentence, and we will remand the case for resentencing in light of Booker and based on a properly calculated loss amount.
On June 20, 1974, Albert Tupone was an employee of the United States Postal Service. On that day, Tupone suffered disabling injuries to his back and eardrum when his mail truck was involved in an accident. As a result of his injuries, Tupone was found to be totally disabled and began to receive disability payments from the United States Office of Workers' Compensation Program ("OWCP").
Each year that Tupone received disability payments, the Department of Labor monitored his status by, inter alia, sending him a questionnaire to complete -- Form 1032. In particular, Tupone was required to answer truthfully the following questions: (1) "Did you work for any employer during the period covered by the form?"; and (2) "Were you self-employed or involved in any business enterprise during the period covered by the form?" During the years 1998 through 2000, Tupone received Form 1032, and each year he answered the above employment questions "No." As a result of his answers, Tupone received tax-free benefits in the amount of $17,894 for 1998, $16,592 in 1999, $19,946 in 2000, for a total of $54,432.
In late 1997, however, Tupone began to buy, repair, and resell used cars. Over the three years in question, Tupone bought and sold approximately twenty-five cars for some disputed amount of profit.*fn1 Tupone neither reported the income to the Department of Labor nor advised the Department of his self-employment activity when filling out the 1032 forms for 1998 through 2000. The Department of Labor discovered the omissions, and a criminal investigation ensued.
On March 13, 2003, a grand jury returned an indictment against Tupone charging him with three counts of violating 18 U.S.C. § 1920.*fn2 The indictment alleged that Tupone had violated the statute by certifying "on three 1032 forms that he had . . . no self-employment and no earned income from any employment for the previous fifteen month period." Count One was based on the form filed on July 1, 1998, which covered the "previous 12 months"; Count Two was based on the form filed on May 4, 1999, which covered the "previous 11 months"; and Count Three was based on the form filed on May 30, 2000, which covered the "previous 13 months." Paragraph 6 of the indictment indicated that Form 1032 "was used to determine whether the claimant qualified for continued benefits and to determine whether an adjustment for continued benefits was warranted." Paragraph 15 of the indictment alleged that Tupone "knowingly and willfully . . . concealed . . . material facts, and made false . . . representations, in connection with the receipt of compensation and other benefits and payments exceeding $1000, under Subchapters I and III of Chapter 81 of Title 5 of the United States Code, the federal workers' compensation law."
At trial, the OWCP employee assigned to Tupone's case testified as to the total amount of benefits Tupone had received during the period covered by the indictment. A second OWCP employee, Agent Gallagher, testified that had Tupone been truthful on his 1032 forms, the Department of Labor would have reduced his benefits according to profits made, required additional medical examinations, and initiated the process designed to determine if Tupone was still disabled and whether his benefits should be further reduced or terminated.
At the close of evidence, the Court instructed the jury on the elements of the offense:
Counts 1, 2, and 3 of the indictment charge defendant with violating Federal law requiring recipients of Federal disability benefits to report any employment or self-employment and any income earned through that employment.
18 United States Code Section 1920 provides in part that whoever knowingly and willfully falsifies, conceals or covers up a material fact or makes a false, fictitious or fraudulent statement or representation or makes or uses a false statement or report, knowing the same to contain any false, fictitious or fraudulent statement or entry in connection with the application for or receipt of compensation or other benefit or payment in excess of $1,000, under Subchapter 1 or 3 of Chapter 81 of Title 5, shall be guilty of an offense against the United States. That's the statute.
The defendant can be found guilty of the offense of making false statements in order to receive Federal disability benefits only if all of the following facts are proved beyond a reasonable doubt. These are what we refer to as the essential elements of the crime charged.
First, that defendant knowingly and willfully made a false statement or report to the Department of Labor, Office of Workers' Compensation Program as charged in Counts 1, 2 and 3 of the indictment.
Second, that the false statement or report was made in connection with an application for or receipt of Federal workers [sic] compensation benefits in excess of $1,000.
And, third, that the false statement or report related to a material fact.
The jury found Tupone guilty of each count of making false statements.
At the sentencing hearing, Tupone argued that § 1920 defined both a felony and a misdemeanor, and that the felony required proof that Tupone had received more than $1,000 in "falsely obtained benefits," an element of the crime which the jury had not been instructed to find. The Court rejected the argument that "falsely obtained" meant something different than receiving a benefit "in connection with" a false statement. The District Court entered felony convictions based on the jury verdict.
On the issue of the "loss" calculation under the Guidelines, Agent Gallagher of the OWCP testified regarding his calculation of the immediate reduction in Tupone's benefits that would have resulted had he reported his earnings on his 1032 forms: $1,955.25 in 1998; $3,718 in 1999; and $1,647.25 in 2000, for a total reduction of $7,320.50. Gallagher also indicated, as he had at trial, that reported income or employment by Tupone would have triggered a re-evaluation process regarding Tupone's status that could have led to a further reduction or even elimination of his benefits and may have resulted in Tupone's return to some form of work.
Based in large part on Agent Gallagher's testimony, the District Court found that the "loss" for Guidelines purposes associated with Tupone's offenses was not merely the $7,320.50 in foregone earnings-based benefit reductions, but the entire amount of benefits that Tupone had received during the indictment period -- $54,432. Using that finding, the Court determined that Tupone's total offense level was 12 (rather than 6), and, applying the pre-Booker mandatory Guidelines regime, sentenced ...