By: Patrick Southern
Today, in United States v. Catone, the Fourth Circuit affirmed the defendant’s conviction for making false statements in connection with his receipt of federal workers’ compensation benefits. However, it reversed the decision of the District Court for the Western District of North Carolina with respect to the defendant’s jail sentence and restitution, deepening a split between the circuits in the process.
The defendant, Catone, worked for the United States Postal Service until 2006, when he submitted a claim for workers’ compensation benefits based on injuries arising from extended periods of driving. His benefits were approved, and he began receiving them in March 2007. To verify continued eligibility, Catone was required to submit a “CA-1032” form each year. The form instructed him to disclose if he had been employed in any way during the previous year. In 2008 and 2009, he indicated he had not been employed. As a result, Catone received more than $121,000 in benefits until September 2009.
Catone was indicted in 2011 on two counts of making false statements on the forms by failing to disclose a job at which the government alleged he performed custodial work. He also was charged with knowingly making a false statement to a federal official (he had told an agent his wife was employed as a custodian and that he occasionally assisted her with her tasks).
At trial, testimony indicated one check in the amount of $635 was written directly to Catone for custodial work performed during the time he received federal workers’ compensation benefits. The jury convicted him of one count of making a false statement on the CA-1032 form he filled out in April 2008, and acquitted him of the other two counts.
A pre-sentence investigation report prepared by a probation officer concluded the conviction carried a statutory maximum sentence of five years. The probation officer found Catone was responsible for a loss of $128,124.75 (the entire amount of benefits he had received). Based on the loss calculated and Catone’s criminal history, sentencing guidelines advised a range of twenty-one to twenty-seven months in jail and restitution of $106,411.83. The district court ultimately imposed a sixteen-month sentence and ordered payment of the full amount of restitution advised in the pre-sentence investigation report. Catone appealed his conviction, his sentence, and the award of restitution.
On appeal, the Fourth Circuit affirmed Catone’s conviction. The defendant argued the government failed to disclose evidence (a CA-1032 form filled out by Catone in 2007 which included an admission of employment as a custodial worker) that undermined its theory that Catone willfully concealed his custodial work. This, Catone argued, was a violation of the rule from Brady v. Maryland. However, to establish a valid Brady claim, the evidence must be known to the government but not the defendant. Since the evidence at issue here was a form filled out by the defendant himself, and that evidence was available to the defendant, his Brady claim failed. Thus, the conviction was affirmed.
However, the sixteen-month sentence of imprisonment was reversed. The statute in question in this case provides the maximum sentence is one year “if the amount of the benefits falsely obtained does not exceed $1,000.” Here, the jury made no finding that Catone’s offense led to more than $1,000 in falsely obtained benefits. The Fourth Circuit noted that the Supreme Court had recently held in Apprendi v. New Jersey that “any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to the jury, and proved beyond a reasonable doubt.” The Supreme Court also extended that reasoning to mandatory minimum sentences, finding that when a fact “aggravates the legally prescribed range of allowable sentences, it constitutes an element of a separate, aggravated offense that must be found by the jury . . . .”
Essentially, the Fourth Circuit held that because the higher sentence required a finding that the offense led to more than $1,o00 in falsely obtained benefits, the amount of benefits falsely obtained was an element of the offense which must be submitted to the jury. The court acknowledged this would deepen a split between the circuits, with the Fourth Circuit joining the Eleventh Circuit in this interpretation of Apprendi (the Second, Seventh, and Tenth Circuits have disagreed). Because this element of the offense was not submitted to the jury, and the error was not harmless, the Fourth Circuit reversed the sentence.
The court also reversed the district court’s order of restitution. The Fourth Circuit noted that precedent indicates the amount of loss in a government benefits case like this is to be calculated by determining the difference in the amount of benefits the defendant actually received and the amount he would have received had he truthfully and accurately completed the CA-1032 forms. The government’s argument at trial was that without his deception, Catone would have received no benefits at all.
Catone argued instead that the loss was less than $1,000, citing testimony of two federal employees who stated his benefits would have been reduced, not terminated, had he disclosed his work properly on the CA-1032 forms. Further, it was possibly the small amount of income he earned would not have reduced his benefits at all. The Fourth Circuit held that the district court did not perform the calculation required by precedent, and that the government provided no evidence as to the results which would have come from a proper calculation of loss. As a result, it reversed the district court’s order as it related to restitution.
The case was remanded to the Western District of North Carolina for further proceedings.
