In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14‐1251
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
WILLIAM PATRICK CLARK,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Illinois.
No. 3:11‐cr‐30236 — David R. Herndon, Judge.
____________________
ARGUED FEBRUARY 11, 2015 — DECIDED MAY 28, 2015
____________________
Before FLAUM, WILLIAMS, and HAMILTON, Circuit Judges.
FLAUM, Circuit Judge. William Patrick Clark’s trucking
business was hired to perform hauling services on a state‐
and federally funded highway project in Missouri. Because
federal funds were in play, Clark’s contract with the project’s
general contractor required that he pay his truck drivers the
federal prevailing wage pursuant to the Davis‐Bacon Act
(which, at the time, was $35.45/hour). Clark chose not to do
so, however, individually contracting with his drivers for
2 No. 14‐1251
roughly $15/hour instead. Throughout the project, as re‐
quired by his contract, Clark submitted weekly payroll certi‐
fications in which he falsely attested to paying his workers
$35.45/hour. After his work on the project concluded, he
submitted an affidavit to the Missouri Department of Trans‐
portation (“MODOT”), certifying compliance with Missouri
state law and its state wage order. On account of these attes‐
tations, the government charged Clark with ten counts of
making false statements in violation of 18 U.S.C. § 1001.
Counts 1–9 pertained to nine of the weekly certifications he
submitted, while Count 10 concerned the MODOT affidavit.
A jury convicted Clark on each count.
On appeal, Clark argues that the government presented
insufficient evidence for the jury to conclude that his false
statements were material to the federal government—an ele‐
ment of § 1001. And he argues that the sentencing judge mis‐
takenly concluded that his false statements caused his under‐
paid employees loss for purposes of applying the sentencing
loss enhancement and ordering restitution. We disagree with
Clark’s argument regarding the materiality of the statements
contained in his weekly payroll certifications and with his
contention that those false statements had no effect on the
monies paid to his employees. We agree with Clark, though,
that the government failed to prove that his affidavit to
MODOT had a natural capability of influencing the federal
government. Accordingly, we reverse Clark’s conviction on
Count 10 due to insufficient proof of materiality. But we af‐
firm his other nine convictions, the district court’s order of
restitution, and its application of the loss enhancement at
sentencing.
No. 14‐1251 3
I. Background
William Patrick Clark, the owner and president of Clark
Trucking and Excavation LLC (“Clark Trucking”), worked in
his family’s business from the time he was fourteen years
old until the company dissolved as a consequence of his
criminal convictions in this case. Clark was charged and
convicted by a jury of making false statements (in violation
of 18 U.S.C. § 1001(a)(3)) regarding the wages he paid to his
employees on a subcontract to improve Interstate Highway
64 (“the I‐64 Project”) in Missouri. The $438 million I‐64 Pro‐
ject was funded both by the state of Missouri and the federal
government. The project’s general contractor, Gateway Con‐
structors, subcontracted with Clark on March 11, 2007 to
“provide hauling services” on a portion of the I‐64 Project.
Clark’s subcontract, titled “Project Hauling Agreement,”
specified that Clark’s services were “subject to prevailing
wages.” It required Clark to “comply with all applicable
laws, ordinances, statutes, rules and regulations, Federal,
State, County, Municipal, pertaining to the Work, but not
limited to, those regulations relating to wages.” And it man‐
dated that Clark “submit copies of certified payrolls for on‐
site hauling by law, rule or regulation.” The Agreement in‐
cluded as an addendum federal form FHWA‐1273, titled
“Required Contract Provisions—Federal‐Aid Construction
Contracts.” The addendum specified that “All mechanics
and laborers employed or working upon the site of the
work” had to be paid wages according to “the wage deter‐
mination of the Secretary of Labor, … which is attached
hereto, and made a part thereof, regardless of any contractu‐
al relationship … between the contractor or its subcontrac‐
tors and such laborers and mechanics.” But it was undisput‐
4 No. 14‐1251
ed at trial that no numerical hourly wage was attached to
Clark’s subcontract or specified therein.
About a year after Clark entered into the subcontract,
however, the Missouri Highway and Transportation Com‐
mission issued a “wage order”—identified at trial as “Annu‐
al Wage Order No. 50”—which became incorporated into
the contract. The actual wage order was not part of the rec‐
ord at trial, but (according to testimony) it mandated that
employees be paid $35.45/hour, Missouri’s state prevailing
wage (which, not coincidentally, was also the federal pre‐
vailing wage, as determined by the U.S. Secretary of Labor).
Trial testimony provided by April Brown, the Missouri De‐
partment of Transportation (“MODOT”) official who pro‐
vided oversight of the I‐64 Project for the state, established
that there was some confusion during the project among
subcontractors as to the prevailing wage that they were re‐
quired to pay, because the wage rate was not expressly at‐
tached to their contracts. For reasons unclear from Ms.
Brown’s testimony, some contractors apparently had been
led to believe that the prevailing rate was about three dollars
less than $35.45 and thus paid their employees that lesser
wage until the wage order was issued and provided clarifi‐
cation. At that point, the confused subcontractors corrected
their wage rate and reimbursed their employees accordingly.
Pursuant to Clark’s subcontract—and the Davis‐Bacon
Act itself—on June 29, 2007, Clark began submitting certified
payrolls to Gateway for each week of hauling services per‐
formed by his drivers. These forms are Department of Labor
forms U.S.G.P.O. 1997 519.861, which expressly state that
falsified information would subject the subcontractor to
criminal prosecution pursuant to 18 U.S.C. § 1001. On each
No. 14‐1251 5
submission, Clark listed the drivers under his employ and
the numbers of hours that he had paid to each for the previ‐
ous week, and averred that he had paid them $35.45/hour.
As required by the form, Clark totaled the weekly wages he
paid to his employees by multiplying $35.45 by the number
of hours that each employee worked during the week at is‐
sue. Each payroll certification contained the following decla‐
ration:
That any payrolls otherwise under this contract
required to be submitted for the above periods
are correct and complete; that the wage rates
for laborers or mechanics contained therein are
not less than the applicable wage rates con‐
tained in any wage determination incorporated
into this contract; that the classifications set
forth therein for each laborer or mechanic con‐
form with the work he performed.
Clark, however, did not pay his drivers $35.45/hour. Instead,
he individually contracted with each employee for roughly
$15/hour. Testimony elicited from his drivers at trial demon‐
strated that his drivers knew that Clark was supposed to pay
them the federal prevailing wage. It seems that they were
happy to have the work, so they did not complain about be‐
ing shortchanged.
Although Clark completed work on the project at the end
of December, 2009, the I‐64 project itself concluded in Au‐
gust 2010. The next month, on September 27, 2010, Clark
signed a “Final Release and Waiver of Lien” for Gateway
Constructors that included a statement that “All labor em‐
ployed thereon or in connection [with the I‐64 project] has
been paid at the applicable prevailing wage rate.” A year
6 No. 14‐1251
later, on September 27, 2011, Clark was informed that
MODOT required an affidavit, swearing compliance with
Missouri state laws. Clark signed and submitted the affida‐
vit, certifying that:
[A]ll provisions and requirements set out in
Chapter 290, Sections 290.210 through and in‐
cluding 290.340, Missouri Revised Statutes,
pertaining to the payment of wages to work‐
men employed on public works projects have
been fully satisfied and there has been no ex‐
ception to the full and complete compliance
with said provisions and requirements with
Annual Wage Order No. 50 … issued by the
Division of Labor Standards … .
Two months later, Clark was arrested. A U.S. Department of
Labor investigation into another company that had worked
on the I‐64 project led DOL to search the offices of Clark
Trucking and confiscate documents.
On December 14, 2011, based on that search and seizure,
a grand jury in the Southern District of Illinois indicted
Clark, charging him with ten counts of making false state‐
ments in violation of 18 U.S.C. § 1001(a)(3). Counts 1–9 con‐
cerned nine weekly payroll certifications that Clark submit‐
ted to Gateway during the project. Although Clark worked
on the I‐64 project from April 28, 2007 through December 26,
2009 (and submitted false payroll certifications weekly from
June 29, 2007 through the project’s completion), the govern‐
ment charged Clark with just nine counts related to the pay‐
roll forms—one count for each of the nine weeks running
from August 30, 2009 through October 31, 2009. Count 10
concerned Clark’s submission of his September 27, 2011 affi‐
No. 14‐1251 7
davit to MODOT regarding his compliance with Missouri
wage laws.
Early on, the district court granted Clark’s motion to
dismiss for improper venue, but, in July 2013, we reversed in
light of our determination that venue is proper in both the
Eastern District of Missouri (where the false forms were
filed) and the Southern District of Illinois (where Clark creat‐
ed the false payroll records and signed the affidavit). United
States v. Clark, 728 F.3d 622 (7th Cir. 2013).
On remand, the case was tried to a jury. The government
presented evidence that Clark was required to pay his em‐
ployees the “prevailing wage,” certified that he paid them
$35.45/hour, but that he, in fact, did not. The government
elicited testimony from two MODOT employees who spoke
to their interactions with Clark. The government also put on
an agent from the U.S. Department of Labor, John Borders,
who testified that he discovered Clark’s false certifications
while investigating another company. Borders was the only
witness from the federal government, and he did not testify
about Clark’s contract, the wage orders, or Clark’s affidavit
certifying compliance with Missouri law. Clark’s defense fo‐
cused on mens rea,1 arguing that he lacked notice of the re‐
quired prevailing wage—stressing that the U.S. Secretary of
Labor’s $35.45 figure was not expressly stated in Clark’s con‐
tract and noting that there had been confusion among the
other subcontractors regarding their precise wage obligation.
Numerous Clark drivers testified that they were paid in the
1 “‘[I]ntent to deceive’ is an element of [section 1001].” United States v.
Ranum, 96 F.3d 1020, 1033 (7th Cir. 1996).
8 No. 14‐1251
neighborhood of $15. Yet, with one exception, each witness
testified that he was satisfied with his pay and did not feel
cheated by Clark. Nevertheless, the jury convicted him on all
ten counts.
At sentencing, Clark disputed that his employees were
“victims” entitled to restitution and, for purposes of the sen‐
tencing enhancement set forth in U.S.S.G. § 2B1.1(b)(1), that
they suffered any “loss” as a result of his false statements.
The government countered by arguing that (1) Clark’s false
statements to the government were part of a “scheme to de‐
fraud” his employees, that (2) an Application Note to the
Guidelines stating a “special rule[]” for “case[s] involving a
Davis‐Bacon violation” governed the loss calculation, and
that (3) “[i]f the offense had not been committed by the de‐
fendant, then each driver would have received the wages
reported in the false certifications.” In the government’s
view, both the U.S. government and the employees were vic‐
timized by Clark’s conduct, and, consequently, Clark’s em‐
ployees should be compensated for the difference between
the $35.45/hour Clark should have paid them and the rough‐
ly $15/hour that he did pay them.
Three of Clark’s former employees, however, addressed
the court through a letter or in person to express support for
Clark and to deny that they had been victimized. Initially,
the probation office took this same position, in light of the
fact that Clark’s drivers were not deceived (they were paid
the rate for which they contracted with Clark) and because
the same federal funds would have been expended regard‐
less of the hourly wage that Clark paid his drivers. As such,
the initial PSR deemed restitution inapplicable in this case.
The government objected to probation’s recommendation
No. 14‐1251 9
and, in response, probation revised the report, ultimately
characterizing Clark’s employees as “victims” entitled to res‐
titution and recommending that the district judge enhance
Clark’s offense level by 2 points under U.S.S.G.
§ 2B1.1(b)(2)(A) for offenses involving ten or more victims.
(Over the nearly three years that Clark worked on the pro‐
ject, he employed 22 drivers in total.)
Both versions of the PSR (including the first version,
which concluded that Clark’s employees were not victims)
determined that Clark’s statements resulted in a “loss” to his
twenty‐two drivers in excess of $200,000 (calculated by mul‐
tiplying the number of employee hours over the course of
the project by $20—the rough difference between the $35.45
required wage and the $15 wage Clark paid his employees).
This resulted in a 12‐level enhancement to his offense level
under U.S.S.G. § 2B1.1(b)(1)(G). Clark contested these de‐
terminations, arguing that his employees were not victims
because they suffered no actual loss due to his false state‐
ments. But the PSR determined—and the district court
agreed—that his drivers did incur losses, in part, based on
Application Note 3(F) to U.S.S.G. § 2B1.1, which states: “In a
case involving a Davis‐Bacon violation (i.e., a violation of 40
U.S.C. § 3142, criminally prosecuted under 18 U.S.C. § 1001)
the value of benefits shall be considered to be not less than
the difference between the legally required wages and actual
wages paid.” In the sentencing judge’s estimation, if Clark
had complied with the Davis‐Bacon Act and paid his em‐
ployees the $35.45 prevailing wage, his drivers would have
been paid $20/hour more than Clark in fact paid them.
Therefore, the district judge concluded that, even though
Clark’s convictions were for making false statements in vio‐
lation of 18 U.S.C. § 1001 (Davis‐Bacon Act violations are not
10 No. 14‐1251
themselves criminal), that statute can be used as a vehicle for
prosecuting Clark’s failure to comply with the wage law.
And that failure directly and proximately caused his em‐
ployees actual monetary loss, the court ruled.
With a criminal history category of 1 and a base offense
level of 6, the 12‐level loss enhancement plus the 2‐level
number‐of‐victims enhancement resulted in a sentencing
range of 33–41 months incarceration on each count. The dis‐
trict court sentenced Clark to 33 months incarceration on
each count (to run concurrently), 3 years supervised release,
a $1000 assessment, and $273,118.43 in total restitution to his
22 former employees.
On appeal, Clark challenges (1) his conviction on Count
10, arguing that the government failed to prove that his affi‐
davit to MODOT was capable of influencing the federal gov‐
ernment; (2) his convictions on Counts 1–9, contending, in
effect, that his false payroll certifications did not concern a
matter within the federal government’s purview; (3) his res‐
titution order, maintaining that his failure to pay his em‐
ployees, not the after‐the‐fact false statements for which he
was convicted, deprived his employees of income; and (4)
the 12‐level loss enhancement, (similarly) arguing that his
false certifications neither caused nor were intended to cause
his employees monetary loss.
II. Discussion
A. Materiality of the MODOT Affidavit
18 U.S.C. § 1001(a)(3) provides that “whoever, in any
matter within the jurisdiction of the executive, legislative, or
judicial branch of the Government of the United States,
knowingly and willfully … makes or uses any false writing
No. 14‐1251 11
or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry,” faces crim‐
inal liability. In other words, the statute makes it a criminal
offense to render a statement that: (1) is false, (2) is material,
(3) is knowingly and willfully made, and (4) concerns a mat‐
ter within the jurisdiction of a federal department or agency.
United States v. Turner, 551 F.3d 657, 662 (7th Cir. 2008). For a
statement to be materially false, it “must have ‘a natural ten‐
dency to influence, or [be] capable of influencing, the deci‐
sion of the decisionmaking body to which it was ad‐
dressed.’” United States v. Gaudin, 515 U.S. 506, 509 (1995)
(quoting Kungys v. United States, 485 U.S. 759, 770 (1988)).
“We do not require the statement to actually influence the
agency to which it was directed, or even that the agency rely
on the statement in any way.” United States v. Lupton, 620
F.3d 790, 806 (7th Cir. 2010). Rather, “[t]he ‘central object’ of
the materiality inquiry is ‘whether the misrepresentation or
concealment was predictably capable of affecting, i.e., had a
natural tendency to affect, the official decision.’” Turner, 551
F.3d at 663 (quoting Kungys, 485 U.S. at 771). The govern‐
ment’s brief, at least implicitly, agrees with Clark’s position
that—to be material—Clark’s false statements had to be ca‐
pable of influencing the U.S. Department of Labor.
In terms of the jurisdiction element, “[a] false statement
may fall within section 1001 even when it is not submitted to
a federal agency directly and the federal agencyʹs role is lim‐
ited to financial support of a program it does not itself di‐
rectly administer.” United States v. Petullo, 709 F.2d 1178,
1180 (7th Cir. 1983). “In such cases, the necessary link be‐
tween deception of the non‐federal agency and effect on the
federal agency is provided by the federal agencyʹs retention
of the ultimate authority to see that the federal funds are
12 No. 14‐1251
properly spent.” Id. (internal citation and quotation marks
omitted).
Clark concedes that his statements in the MODOT affi‐
davit were false. He argues, though, that the government
failed to introduce evidence at trial proving that his mis‐
statements, which he submitted to a state agency and which
concerned compliance with Missouri state law, were materi‐
ally false. The government—again, accepting Clark’s premise
that for Clark’s statements to be material, they had to be ca‐
pable of influencing the federal Department of Labor—
counters that Clark’s statements concerning the wages he
paid his employees satisfy materiality simply because the
federal government had an interest in ensuring that the pro‐
ject’s subcontractors paid their employees the federal pre‐
vailing wage.
Whether a statement is “material” is a fact question for
the jury. United States v. Beaver, 515 F.3d 730, 740 (7th Cir.
2008). Normally, “[a] defendant who challenges the suffi‐
ciency of the evidence faces a daunting standard of review.
In considering such a challenge, we view ‘the evidence in the
light most favorable to the Government, defer[] to the credi‐
bility determination of the jury, and overturn[] a verdict only
when the record contains no evidence, regardless of how it is
weighed, from which the jury could find guilt beyond a rea‐
sonable doubt.’” United States v. Carter, 695 F.3d 690, 698 (7th
Cir. 2012) (quoting United States v. Perez, 612 F.3d 879, 885
(7th Cir. 2010)). But as the government points out, Clark did
not renew his motion for judgment of acquittal at the end of
his trial. Therefore, “we will only reverse his conviction if we
find a ‘manifest miscarriage of justice’ under the plain error
standard of review.” United States v. Rea, 621 F.3d 595, 601–
No. 14‐1251 13
02 (7th Cir. 2010). Under either standard, though, if (as Clark
claims) the government failed to put on any evidence from
which a rational jury could find Clark’s statements material,
his conviction must be set aside. See Rea, 621 F.3d at 602 (not‐
ing that reversal is warranted under the demanding miscar‐
riage of justice standard if the record is “devoid of evidence
pointing to guilt”) (citation omitted).
Turning to Clark’s argument, we are unconvinced that
statements made to a state agency (even ones concerning on‐
ly state law) are incapable of influencing the federal gov‐
ernment as a per se rule. Cf. Petullo, 709 F.2d at 1179 (affirm‐
ing a false statements conviction where a contractor submit‐
ted false claims to the City of Chicago, which had received
federal funds for snow removal). See also United States v.
White, 270 F.3d 356 (6th Cir. 2001) (affirming a Section 1001
conviction where the defendants made false statements to
the Kentucky Division of Water). Nevertheless, we agree
with Clark that the government failed to prove how his
statements to a state agency in this case had an ability to in‐
fluence the federal government.
The government emphasizes that a false statement under
section 1001 is material if it merely has the mere “possibility
of influencing” a federal government agency, Turner, 551
F.3d at 659, and points out that the Sixth Circuit has de‐
scribed this as a “fairly low bar for the government to meet.”
White, 270 F.3d at 365. The government argues that it cleared
this low bar by way of Government Exhibit 52, which it pre‐
sented at trial and which the jury reviewed during its delib‐
eration. Government Exhibit 52 is Form FHWA‐1273, titled
“Required Contract Provisions Federal‐Aid Construction
Contracts,” which (as discussed earlier) was attached to
14 No. 14‐1251
Clark’s Hauling Agreement with Gateway Constructors.
Again, one of the provisions contained in this document is a
requirement that Clark had to pay his employees consistent
with “the wage determination of the Secretary of Labor, …
which is attached hereto, and made a part thereof, regardless
of any contractual relationship … between the contractor or
its subcontractors and such laborers and mechanics.” Ac‐
cording to the government, “common sense dictates that a
false statement regarding the wages paid on [sic] contract
ostensibly covered by the Davis‐Bacon Act has the potential
to influence the Department of Labor,” because “[i]t is the
Department’s regulatory responsibility to ensure that the
Davis‐Bacon Act’s prevailing wage requirements are con‐
sistently enforced on all federally‐funded construction pro‐
jects. And the right to cut off payments to a contractor is a
very real, potentially very costly enforcement mechanism.”
In fact, the U.S. Department of Labor had the authority—
upon learning that employees of a subcontractor are being
paid less than the U.S. Secretary of Labor’s prevailing
wage—to make a written request to MODOT, asking that it
withhold “any accrued payments or advances as may be
considered necessary” to pay the employees their owed pre‐
vailing wages. This was specified in addendum federal form
FHWA‐1273, titled “Required Contract Provisions—Federal‐
Aid Construction Contracts”: “[t]he [state highway agency]
shall upon its own action or upon written request of an au‐
thorized representative of the DOL withhold, or cause to be
withheld, from the … subcontractor under this contract or …
any other Federally‐assisted contract subject to the Davis‐
Bacon prevailing wage requirements which is held by the
same prime contractor, as much of the accrued payments or
No. 14‐1251 15
advances as may be considered necessary to pay laborers or
mechanics … .”
But the government appears to miss Clark’s point. The
affidavit Clark submitted to MODOT on September 27, 2011
swears only that he complied with “all provisions and re‐
quirements set out in Chapter 290, Sections 290.210 through
and including 290.340, Missouri Revised Statutes, pertaining
to the payment of wages to workmen” and with “Annual
Wage Order No. 50” issued by the Missouri Highway and
Transportation Commission. On its face, therefore, the form
gives us no indication of its ability to affect the federal gov‐
ernment. And the government submitted no evidence at trial
that a federal agency or department ever received the affida‐
vit, that the federal government viewed or considered the
affidavit when disbursing federal funds or conducting pro‐
ject audits, or—more fundamentally—that it even knew that
Missouri required such affidavits. Nor can any such infer‐
ence be reasonably drawn; recall that Missouri collected this
affidavit thirteen months after the project ended and twenty‐
one months after Clark completed his work on the project—
long after he had been paid. Moreover, the only witness
from the federal government to testify at trial (John Borders)
made no reference to this affidavit in his testimony. And tes‐
timony from MODOT employee Ronald Morris made clear
that the federal and Missouri wage orders are separate and
distinct, despite both imposing an obligation to pay the same
hourly rate.2 For these reasons, we agree with Clark that the
2 Note that thirty states, including Missouri, have their own prevailing
wage requirement, which need not mimic the federal prevailing wage.
“[N]othing in … the legislative history of the Davis‐Bacon Act … sup‐
16 No. 14‐1251
government introduced no evidence from which a rational
trier of fact could conclude that the contents of the affidavit
were capable of influencing the decisions of the federal gov‐
ernment beyond a reasonable doubt. Its failure to do so is
fatal to its materiality argument.3 Accordingly, we reverse
Clark’s conviction on Count 10.
ports [the] contention that Congress intended to preempt broader pre‐
vailing minimum wage requirements implemented by the states. As the
Supreme Court acknowledged for the first time over fifty years ago: ‘The
language of the [Davis‐Bacon] Act and its legislative history plainly
show that it was not enacted to benefit contractors, but rather to protect
their employees from substandard earnings by fixing a floor under wages
on Government projects.’” Frank Bros. Inc. v. Wisc. Dept. of Transp., 409
F.3d 880, 889 (7th Cir. 2005) (quoting United States v. Binghamton Const.
Co., 347 U.S. 171, 177 (1954)). Because the federal prevailing wage law is
a floor, state laws can also add categories of workers to whom it applies.
Id. (“[M]ost [state prevailing wage laws] contain categories of covered
employees or prevailing wage rates which differ from the Davis‐Bacon
Act, i.e., some states require that a prevailing wage be paid to one or
more classifications of employees that are not covered under the Davis‐
Bacon Act.”).
3 The government spends much of its brief arguing that Clark conflates
the elements of jurisdiction and materiality. In the government’s view,
Clark does not make a materiality argument at all, but rather—by noting
that the MODOT affidavit does not concern matters within the U.S. De‐
partment of Labor’s purview—wages an attack on the government’s
proof of section 1001’s jurisdiction element. As an initial matter, we are
skeptical that the jurisdiction element is satisfied here. Although federal
funds were at issue during the project itself, Clark submitted his affidavit
to MODOT (certifying only compliance with state law) long after the
project’s completion, and so, presumably long after federal funds were
spent. The government makes no attempt to demonstrate how the
MODOT affidavit could have affected those federal funds or implicated
some authority delegated to MODOT by the federal government, which
No. 14‐1251 17
B. Materiality of Clark’s Payroll Certifications
Clark also insists that the government failed to prove ma‐
teriality concerning Counts 1–9. But he hinges his materiality
argument not on whether his certifications had the ability to
influence the federal government, but on whether he was
contractually required to pay Davis‐Bacon wages at all. The
Davis‐Bacon Act provides that “every contract in excess of
$2,000” that involves the federal government “shall contain a
provision stating the minimum wages to be paid various
classes of laborers and mechanics.” 40 U.S.C. § 3142. In
Clark’s view, a party to a contract that fails to specify the
numeric federal prevailing wage cannot be bound to pay it.
Moreover, Clark contends that the “only wage order men‐
tioned during trial was Annual Wage Order 50, issued by
the ‘Missouri Highway and Transportation Commission.’”
Therefore, Clark says, “even though the contract between
Clark and Gateway Constructors does reference payment of
a ‘prevailing wage,’ that rate (for purposes of Davis‐Bacon)
was not in the contract and there’s no evidence it ever exist‐
ed.” As best we can tell, Clark’s position seems to be that he
we have suggested is necessary to satisfy jurisdiction in this context. See
Petullo, 709 F.2d at 1181 (“We think … at least in the emergency relief
context it should be the authorization of federal assistance that triggers
federal jurisdiction under the false statements statute. … [J]urisdiction …
incorporates Congress’ intent that the statute apply whenever false
statements would result in the perversion of the authorized functions of
a federal department or agency.”) (internal citation omitted). Neverthe‐
less, we agree with Clark that his argument speaks primarily to material‐
ity—that is, that the government failed to put on evidence from which a
rational factfinder could conclude that the statements in Clark’s MODOT
affidavit had the ability to influence the federal government.
18 No. 14‐1251
was not contractually obligated to pay Davis‐Bacon wages,
and thus any misstatement concerning the wages he paid
cannot possibly be material to the federal government.
As an initial matter, Clark cites no case law for the prop‐
osition that the federal numerical prevailing wage must be
printed in a subcontractor’s contract for Davis‐Bacon to ap‐
ply. And, as the government points out, Clark’s contract did
expressly state that he must pay his drivers the federal pre‐
vailing wage, as set forth by the U.S. Secretary of Labor. As it
did with respect to Count 10, the government argues that
Clark conflates the elements of materiality and jurisdiction.
Here, though, we agree with the government. Clark does not
argue that his false statements did not have a natural ten‐
dency to influence the Department of Labor (the standard
for materiality), but instead—in effect—argues that the De‐
partment of Labor had no interest in Clark’s statements
about wages since (as Clark sees it) he was not contractually
obligated to pay a federally‐mandated wage. We find
Clark’s reasoning wholly unpersuasive.
Regardless of the Section 1001 element that Clark’s ar‐
gument purports to target, it is undisputed that in each pay‐
roll certification Clark expressly attested to paying his driv‐
ers $35.45/hour and that each form warned Clark that “a
willful falsification of any of the above statements may sub‐
ject the contractor or subcontractor to civil or criminal prose‐
cution. See section 1001 of Title 18 and section 231 of Title 31
of the United States Code.” Moreover, Clark’s contract speci‐
fied that he was subject to Davis‐Bacon’s requirements “re‐
gardless of any contractual relationship … between the con‐
tractor or its subcontractors and such laborers and mechan‐
ics.” It is clear then that the government not only had an in‐
No. 14‐1251 19
terest in the information contained in these payroll certifica‐
tions, but that a false statement on these forms had a natural
tendency to influence the federal government in some way.
And Clark knew that.4
In essence, Clark’s argument is that the Davis‐Bacon Act
did not apply to him, because the contract failed to state the
numeric prevailing wage. But he was not prosecuted for vio‐
lating the Davis‐Bacon Act; he was prosecuted under section
1001 for lying about the wages that he paid. And there’s no
dispute that he did. Therefore, Clark’s so‐called materiality
argument speaks mainly to his mens rea—that is, his intent to
violate the Davis‐Bacon Act itself. That was his unsuccessful
defense at trial, and Clark does not appeal the jury’s finding.
Accordingly, we affirm Clark’s convictions on Counts 1–9.
C. Loss Caused by Clark’s Misstatements
Clark argues that the district court misapplied 18 U.S.C. §
3663 and, thus, that his restitution order must be vacated.
We review the district court’s statutory authority to issue a
restitution order de novo. United States v. Hoskin, 567 F.3d
329, 331 (7th Cir. 2009).5 18 U.S.C. § 3663 permits a district
4 In addition to listing $35.45 on the payroll certifications as the hourly
wage Clark paid his employees, evidence at trial demonstrated that
Clark had conversations with his truck drivers, wherein he acknowl‐
edged that he was supposed to be paying them the prevailing wage, but
that he felt that he was “paying them enough.” As one of the employee
witnesses testified, it is commonly known by truck drivers that they are
entitled to be paid the federal prevailing wage on all government jobs.
5 The government argues that, because Clark did not object to the restitu‐
tion award at sentencing, the plain error standard of review applies.
Clark, however, points out that he challenged the characterization of his
20 No. 14‐1251
court to order restitution to any victim of Clark’s false
statements. 18 U.S.C. § 3663(a)(1)(A). The statute defines
“victim,” as “a person directly and proximately harmed as a
result of the commission of an offense for which restitution
may be ordered.”6 18 U.S.C. § 3663(a)(2). Clark argues that
his employees do not fit that description, because his mis‐
employees as victims in his objections to the PSR, in his sentencing
memorandum, and at the sentencing hearing. In any event, the govern‐
ment concedes that if plain error review applies, we may still vacate the
restitution order if it “seriously affects the fairness, integrity or public
reputation of judicial proceedings,” United States v. Randle, 324 F.3d 550,
555 (7th Cir. 2003). Therefore, if we determine that the employees are not
“victims,” vacating the award would be appropriate under either stand‐
ard.
6 Clark repeatedly argues that the statute defines victims in two ways: (1)
“a person directly and proximately harmed as a result of the commission
of an offense for which restitution may be ordered,” or (2) “in the case of
an offense that involves as an element a scheme, conspiracy, or pattern of
criminal activity, any person directly harmed by the defendant’s criminal
conduct in the course of the scheme, conspiracy, or pattern.” But the
statute clearly says that “the term ‘victim’ means a person directly and
proximately harmed as a result of the commission of an offense for
which restitution may be ordered including, in the case of an offense that
involves as an element a scheme, conspiracy, or pattern of criminal activity, any
person directly harmed by the defendant’s criminal conduct in the course of the
scheme, conspiracy, or pattern.” 18 U.S.C. § 3663(a)(2) (emphasis added).
This is relevant because Clark argues that the government improperly
advanced arguments to the district court that Clark engaged in a
“scheme,” and thus that the government was attempting to rely on the
second definition of victim (which Clark says should not apply here).
The statute makes clear, though, that—scheme or no scheme—only per‐
sons who are directly and proximately harmed by the charged offense
may be considered victims.
No. 14‐1251 21
statements did not directly or proximately deprive them of
wages. Direct and proximate harm means that the loss
would not have occurred “but for” the offense and that it
was “foreseeable.” See United States v. Donaby, 349 F.3d 1046,
1053–54 (7th Cir. 2003). Yet, as Clark says, he was convicted
of lying to the government, not underpaying his employees.
And, in his view, his lies did not cause his employees to be
underpaid—they merely covered up the underpayments af‐
ter the fact. As Clark puts it, “[r]egardless of [his] reports to
agencies, his payments to his workers were what they
were.”
With respect to Count 10 concerning the MODOT affida‐
vit (which, as outlined above, we vacate on materiality
grounds in any event), Clark’s argument has legs. He sub‐
mitted the affidavit long after the project’s completion and
long after he and his drivers had been paid. However, that
conclusion does not affect his restitution obligation, because
Clark oversimplifies the issue with respect to Counts 1–9. As
discussed earlier, the Addendum to Clark’s Hauling Agree‐
ment acknowledges the authority of both the federal gov‐
ernment and MODOT, upon learning of a subcontractor’s
failure to pay its employees the federal prevailing wage, to
intervene and divert project funds earmarked for Clark to
his undercompensated employees. We therefore agree with
the government that Clark’s false payroll certifications de‐
prived the government of an opportunity to invoke this di‐
version mechanism and make Clark’s undercompensated
employees whole. Had Clark been truthful on the certifica‐
tion forms (listing the real hourly wage he was paying his
drivers), his employees could have been fully compensated
with funds that instead were paid to him. Accordingly,
Clark’s false statements proximately caused losses to his
22 No. 14‐1251
employees in an amount equal to the difference between the
wages he should have paid them ($35.45/hour) and the wag‐
es he in fact did pay them (roughly $15/hour). We therefore
affirm the district court’s restitution order.
D. The 12-level Loss Enhancement
We review the district court’s interpretation and applica‐
tion of U.S.S.G. § 2B1.1 de novo. United States v. Johnson, 612
F.3d 889, 892 (7th Cir. 2010). Loss, for purposes of the section
2B1.1 enhancement, can be based on either actual or intend‐
ed losses, but the government relies exclusively on actual
loss in defending the district court’s $273,118.43 loss amount
calculation. Actual loss is defined as “the reasonably fore‐
seeable pecuniary harm that resulted from the offense.” §
2B1.1, App. n.3(A).
The parties’ loss arguments mostly resemble their argu‐
ments on the topic of restitution. Clark argues that the dis‐
trict court improperly imposed a 12‐level sentencing en‐
hancement (which increased his guidelines range from 0–6
months to 33–41 months) based on a notion of loss that his
reply brief deems “irrational.” The government’s position is
that if we “concur[] in the district court’s determination that
the drivers were victims of Clark’s crimes, then, logically,
the difference between what the drivers were paid and what
Clark said they were paid would be their loss.” In the gov‐
ernment’s view, the district court’s determination that
Clark’s false statements caused his employees actual loss of
$273,118.43 is “[c]onsistent with basic reasoning and with
Application Note 3(F)(iii) to U.S.S.G. § 2B1.1.”
Application Note 3(F)(iii) reads: “In a case involving a
Davis‐Bacon violation (i.e., a violation of 40 U.S.C. § 3142,
criminally prosecuted under 18 U.S.C. § 1001), the value of
No. 14‐1251 23
the benefits shall be considered to be not less than the differ‐
ence between the legally required wages and actual wages
paid.” As the government sees it, this note makes the loss
question a straightforward one. But the government seems
to overlook that the Note expressly states that the “special
rules” listed therein “shall be used to assist in determining
loss.” Id. (emphasis added). Application Note 3(F)(iii), there‐
fore, speaks to calculating the loss amount, not in determin‐
ing—without regard to basic cause and effect principles—
whether the pecuniary harm resulted from the offense in the
first place. Moreover, the application note refers to “bene‐
fits,” not “losses,” rendering its guidance even less certain.
For that reason, we disagree with the government’s sugges‐
tion (seemingly endorsed by the sentencing judge in this
case) that any time a Davis‐Bacon‐related false statement is
at issue, regardless of whether that statement actually
caused loss, a sentencing judge must proceed as though it
did.7
7 For an order of restitution to be appropriate in the Section 1001 context,
the false statements, not the conduct about which those statements con‐
cern, must have caused the loss. Comments made by the trial judge at
sentencing, though, suggest some misunderstanding on this point. See
Sentencing Tr. p. 27–28 (“The Court: Now, Davis Bacon doesn’t contain
any provisions for criminal remedies, so there has to be a vehicle – if
there’s going to be a criminal prosecution associated with Davis Bacon,
there has to be some other vehicle to bring that prosecution, false state‐
ments … and in fact we have a Davis Bacon issue in this criminal case …
so – there’s no question that in terms of the legal concept of proximate
cause, the workers received a difference in pay between the prevailing
wage and what they actually got … so this is just – to me, this is just a
common sense, ready‐made situation that Davis Bacon sought to pre‐
vent.”). We attribute this confusion to the government’s choice to prose‐
24 No. 14‐1251
In this case, though—on account of the government’s au‐
thority to halt payments to subcontractors upon learning
that one’s employees were being undercompensated—
Clark’s false payroll certifications did cause loss to his em‐
ployees. The government never learned of Clark’s under‐
payments because he lied throughout the project’s duration,
depriving the government of the opportunity to divert funds
to his underpaid personnel and cheating Clark’s employees
out of their federally‐mandated wages in the process. There‐
fore, Application Note 3(F)(iii) concerning loss calculation is
both relevant and instructive. Although the Note discusses
“benefits,” not “loss,” we read those terms to be the converse
of each other in this instance; if Clark benefited in an amount
equal to the difference between the prevailing wages he
should have paid to his employees and those that he actually
did pay them, then, of course, his employees suffered losses
to that same tune. Accordingly, we conclude that Clark’s
false statements did, in fact, cause loss to his employees and
that the district court properly applied Application Note
3(F)(iii) in calculating that loss amount.
cute Clark for making false statements, rather than for committing wire
or mail fraud. That decision seems to have complicated not only matters
at sentencing, but virtually every issue in this case—right down to the
elements of the charged offense. Nevertheless, as we discuss, the sen‐
tencing judge’s understandable confusion about the interplay of the Da‐
vis‐Bacon Act and Section 1001 did not render Clark’s sentence improp‐
er.
No. 14‐1251 25
III. Conclusion
For the foregoing reasons, we AFFIRM in part and REVERSE
in part the judgment of the district court and remand for re‐
sentencing consistent with this opinion.