FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 11, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 15-5055
ROGER DANA BARNETT,
Defendant - Appellant.
_________________________________
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 4:14-CR-00119-GKF-1)
_________________________________
Submitted on the briefs:*
Julia L. O’Connell, Federal Public Defender, and Barry L. Derryberry, Research and
Writing Specialist, Office of the Federal Public Defender, Northern District of
Oklahoma, Tulsa, Oklahoma, for Defendant-Appellant.
Danny C. Williams, Sr., United States Attorney, and Clemon D. Ashley, Assistant United
States Attorney, Office of the United States Attorney, Northern District of
Oklahoma, Tulsa, Oklahoma, for Plaintiff-Appellee.
_________________________________
Before KELLY, BRISCOE, and HARTZ, Circuit Judges.
_________________________________
HARTZ, Circuit Judge.
*
After examining the briefs and appellate record, this panel has determined unanimously
that oral argument would not materially assist in the determination of this appeal. See
Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted
without oral argument.
_________________________________
Defendant Roger Dana Barnett served as Second Chief of the Muscogee (Creek) Nation
in 2013 and 2014. One of his duties in that elected position was to make disbursements
from the Tribe’s emergency-assistance fund to tribal members who met certain
conditions. He could provide assistance with money from a petty cash fund or by using a
tribal debit card to make point-of-sale purchases or to make withdrawals from ATM
machines. He pleaded guilty in the United States District Court for the Northern District
of Oklahoma to embezzling funds from the Tribe by appropriating to his own use money
withdrawn from ATM machines. See 18 U.S.C. § 1163. The sole issue on this appeal is
whether the district court properly determined the amount of money embezzled for
purposes of calculating Defendant’s offense level and the amount he owes the Tribe in
restitution. Based on evidence recited in the probation office’s presentence report (PSR)
and an addendum to that report (the Addendum), the district court found that Defendant
embezzled all, not just some, of the money that he withdrew from ATM machines.
Defendant asserts that the court’s reliance on the PSR and the Addendum was improper
because the government failed to present at sentencing any evidence of the amount of
loss. We disagree. The court could properly rely on the PSR and Addendum because
Defendant did not adequately challenge their recitations of the evidence concerning his
defalcations. The only issue that he preserved for appeal was whether the recited
evidence sufficed to support the court’s determination of the amount of loss, and we hold
that the evidence was sufficient. We therefore affirm Defendant’s sentence. Our
jurisdiction arises under 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.
2
After summarizing the description of Defendant’s conduct in the PSR and
Addendum, we discuss the law governing objections to a PSR, set forth Defendant’s
objections in the district court, hold that the objections to the factual recitations were
inadequate, and conclude by holding that the unobjected-to factual recitations adequately
supported the district court’s findings.
I. The PSR and Addendum
When Defendant pleaded guilty, he admitted using his tribal debit card to make
ATM withdrawals that he spent primarily on gambling. The PSR added further detail:
Applicants could obtain financial assistance from the Second Chief only after completing
a form that documented tribal membership, denial of assistance from other sources, and
proof of income and need. Recipients were to provide receipts to document expenditures
of emergency funds. To provide assistance, Defendant could use a tribal debit card
issued to him for both point-of-sale transactions and ATM withdrawals. He also could
use a petty-cash fund.
From April 3, 2013, through April 29, 2014, Defendant embezzled money from
the emergency fund, using it for such things as gambling, purchasing goods, and gifts to
others. To obtain the money, he used the tribal debit card to make ATM withdrawals at
various casinos and other businesses. He provided no receipts for the ATM withdrawals
or documentation of their purposes despite multiple requests from the Tribe.
When Defendant’s expenditures eventually exhausted the emergency fund, he
requested additional money. The Tribe conducted an audit and notified the Federal
Bureau of Investigation of the apparent embezzlement. The PSR calculated the total
3
amount of Defendant’s misappropriation from the Tribe as $211,880.76, which included
all the ATM withdrawals.
Later the probation office filed the Addendum to the PSR. It described
Defendant’s duties before disbursing funds and the Tribe’s documentation requirements:
Although defendant was not required to obtain signed receipts from
those to whom he provided financial assistance, he was required to verify
tribal membership, denial of assistance from other resources, and proof of
income and need, as stated in the request form for emergency assistance
held by his office, which was revised May 14, 2013, one month after the
instant offense began. Persons receiving assistance were to provide
receipts to the Second Chief’s Office following expenditure of any
disbursements.
R., Vol. III at 15. Nevertheless, said the PSR:
Defendant did not follow this policy when accessing funds through ATM
withdrawals. The evidence shows that between April 2013, and April
2014, defendant made ATM withdrawals several times each week of
various amounts, usually between $200 and $800, with the majority of the
withdrawals coming from casino ATM machines. Defendant kept no
receipts or documentation of the purpose for the withdrawals and admitted
that he used much of the funds to gamble and provide to others to gamble.
Id.
According to the Addendum, this lack of documentation (despite repeated requests
by the Tribe’s accountant) was contrary to Defendant’s practice when providing
assistance using other methods of payment, and the use of the ATMs was also remarkable
because petty cash often would have been available if cash assistance was needed:
[T]here were legitimate purchases and expenditures made by defendant
utilizing the debit card for point of sale purchases, for which defendant did
fill out the required credit card form. In addition, most of the ATM
withdrawals occurred during normal business hours when defendant had
access to the petty cash fund established for use by his office, minimizing
the need for use of the debit card to make ATM cash withdrawals.
4
Defendant did at times utilize the petty cash fund as authorized for
legitimate disbursements and completed the required documentation. As to
the ATM cash withdrawals; however, no documentation was ever
completed by defendant nor was any receipt ever returned by a recipient,
despite numerous emails to defendant’s office sent by [the] Muscogee
Creek Nation Staff Accountant, requesting such receipts, to which
defendant replied he would comply and never did.
Id. The Addendum concluded that the loss equaled the total amount of ATM
withdrawals, despite letters supporting Defendant from members of the Tribe, who did
not provide sufficient detail to be helpful:
The evidence suggests that defendant complied with tribal
documentation policies for most expenditures other than ATM cash
withdrawals. Defendant has provided no evidence to support his contention
that the amount of loss calculated in the presentence report based upon the
cash withdrawn from ATMs belonging to the Muscogee (Creek) Nation
should not be included . . . . Although five tribal members have provided
letters stating that they have received emergency assistance from defendant,
no receipts, dates, or amounts have been given and no proof exists that the
assistance given to those five parties has not already been omitted from the
loss amount as part of the legitimate expenditures made by point of sale
purchases or petty cash disbursements that were documented by defendant.
Id.
II. Necessity of Objections to the PSR
Fed. R. Crim. P. 32(i)(3) governs the district court’s use of a PSR in establishing
the facts relevant to sentencing. In pertinent part it states:
At sentencing, the court:
(A) may accept any undisputed portion of the presentence report as a
finding of fact; [and]
(B) must—for any disputed portion of the presentence report or
other controverted matter—rule on the dispute or determine that a
ruling is unnecessary either because the matter will not affect
sentencing, or because the court will not consider the matter in
sentencing . . . .
5
In light of this rule, we have said that “[a]t sentencing, the district court may rely on facts
stated in the presentence report unless the defendant has objected to them. When a
defendant objects to a fact in a presentence report, the government must prove that fact at
a sentencing hearing by a preponderance of the evidence.” United States v. Harrison,
743 F.3d 760, 763 (10th Cir. 2014) (internal quotation marks omitted).
But what constitutes an adequate objection to a recitation in the PSR? A
defendant must do more than simply state that he objects to the PSR’s bottom line. “[T]o
invoke the district court’s Rule 32 fact-finding obligation, the defendant is required to
make specific allegations of factual inaccuracy.” United States v. Chee, 514 F.3d 1106,
1115 (10th Cir. 2008) (emphasis added) (internal quotation marks omitted). “An
objection to the ultimate conclusions in the presentence report does not necessarily imply
that a ‘controverted matter’ exists.” Id. Rather, the defendant has “an affirmative duty to
make a showing that the information in the presentence report was unreliable and
articulate the reasons why the facts contained therein were untrue or inaccurate.” Id.
(brackets and internal quotation marks omitted); see United States v. Rodriguez-Delma,
456 F.3d 1246, 1253–54 (10th Cir. 2006) (district court’s fact-finding obligation was not
triggered by a sentence-enhancement objection that did not contest the facts supporting
the enhancement).
III. Insufficiency of Defendant’s Objections to the PSR and Addendum
Defendant did not satisfy the above requirements. Our review of the record shows
that he objected to the PSR’s conclusions but not the underlying facts.
6
Defendant responded to the initial PSR in three ways. First, he submitted an
expert report prepared by former IRS agent Larry Cotton. It primarily relied on a civil
tax case containing a short paragraph on constructive dividends—a case not relied on by
Defendant on appeal. It also raised an issue about what documentation was required by
the emergency-assistance program. But the district court then requested more
information on the program’s requirements, and, as we shall see, Defendant never
challenged what the probation office set forth in its Addendum.1
Second, Defendant submitted letters from five tribal members who said that they
received emergency assistance from him, although they did not provide receipts or
otherwise describe when they received the assistance or how much they received.
1
We quote the summary of the report that appears in the Addendum to establish that the
report did not raise any challenge to the evidence ultimately set forth in the PSR and
Addendum (the expert report is not itself in the record):
Cotton argues that defendant was not required to obtain a signed receipt
from tribal members to whom he legitimately gave financial assistance.
Therefore, he contends that the loss amount should be calculated similarly
to an income tax examination of a “C” corporation where certain expenses
paid and deducted by the corporation without a receipt are disallowed to the
corporation but not considered a constructive dividend, or income, to the
majority shareholder. Defendant cites Erickson v. Commissioner, 598 F.2d
525, 531 (9th Cir. 1979), in support of his argument. Thus, as the total loss
amount calculated in the presentence report of $211,880.79, is mostly
derived from numerous ATM withdrawals made by the defendant at casino
and non-casino ATMs, Cotton opines that 20% of the total withdrawals
made at the three non-casino ATMs ($81,702.60), should be deducted from
the loss amount. A 20% reduction from $81,702.60 is $16,340.52.
Therefore, when subtracted from the currently calculated loss amount of
$211,880.79, the resulting loss amount would be $195,540.27.
R., Vol. III at 14.
7
Third, Defendant submitted a sentencing memorandum in support of his objection
to the loss calculation and an unrelated matter. His paragraph on the calculated loss
stated:
The Government now appears to be relying on [Defendant’s] failure
to comply with tribal policy for his office to maintain its position regarding
the loss amount. That [Defendant] failed to comply with this policy
regarding emergency assistance by not submitting the required
documentation, now translates into a factor in the loss equation. The
Government asks this Court to assume that all ATM withdrawals were
utilized for personal use. That he gambled at various casinos with tribal
funds is not questioned; however, the Government cannot meet its burden
to prove by a preponderance of the evidence, that the entire sum withdrawn
from the ATMs’ was for [Defendant’s] personal use.
R., Vol. I at 16. The memorandum did not dispute the accuracy of the evidence in the
PSR and Addendum—the amount of money withdrawn and the absence of
documentation—but only the inferences to be drawn from that evidence.
After these submissions by Defendant, the probation office prepared the PSR
addendum, which was dated eight days before the hearing at which he was sentenced.
Counsel posed no new objections to its content. The following exchange occurred at the
outset of the hearing:
THE COURT: . . . [H]ave you had a full, fair, and complete opportunity to
discuss the contents of that presentence investigation report with Mr.
Brunton as your attorney?
THE DEFENDANT: Yes, sir.
THE COURT: . . . I know we do have one objection here to the sentencing
guidelines in the presentence investigation report. Are there any others?
MS. COZZONI [the prosecutor]: Not that I’m aware of, Your Honor.
MR. BRUNTON [defense counsel]: No, sir.
THE COURT: All right. And with regard to that objection, Mr. Brunton,
anything other than what you’ve raised in the papers?
MR. BRUNTON: No, sir.
8
R., Vol. II at 54–55. The court overruled Defendant’s objection. It said that
disbursements made by point-of-sale transactions and petty-cash outlays were supported
by the required documentation, but that none of the ATM withdrawals were. The court
discounted the letters from tribal members describing emergency assistance from
Defendant because the assistance given to them could have been part of the point-of-sale
transactions or from the petty-cash fund. It also relied on Defendant’s admission to using
the funds to gamble, make personal purchases, and give to others. And it noted that
Defendant did not need to make ATM withdrawals during business hours, when he could
access the petty-cash fund. It included as loss all ATM withdrawals. The following
exchange with counsel then took place:
THE COURT: Are there any objections to those findings?
MS. COZZONI: No, Your Honor.
THE COURT: Mr. Brunton?
MR. BRUNTON: Other than what I’ve already previously filed, Judge.
R., Vol. II at 63.
Thus, Defendant did not “make specific allegations of factual inaccuracy” in the
PSR or PSR addendum. Chee, 514 F.3d at 1115. He did not dispute any of the facts
underlying the total-loss finding, including the amounts withdrawn and the times of the
withdrawals, his access to the petty-cash fund, the documentation required of both him
and third parties (as set forth in the PSR Addendum), his compliance with these
requirements when making other disbursements, and the failure of third parties to provide
documentation of expenditures that he attributed to the ATM withdrawals. The
sentencing court could therefore properly rely on those facts. The only objection that
9
Defendant adequately preserved was that the facts set forth in the PSR and PSR
Addendum did not support the court’s conclusion regarding the amount of loss. We now
turn to that objection.
IV. Sufficiency of the Evidence
“The Government bears the burden of proving loss by a preponderance of the
evidence.” United States v. Griffith, 584 F.3d 1004, 1011 (10th Cir. 2009). We review
the district court’s findings for clear error. See United States v. Mullins, 613 F.3d 1273,
1292 (10th Cir. 2010). In overruling Defendant’s objection to the loss amount, the
district court reasoned:
Based upon the totality of the factors in this case, including the fact
that the defendant properly documented expenditures in cases other than
ATM cash withdrawals, that the defendant admitted he used the funds to
gamble or make personal purchases or gave funds to others to gamble, the
fact that no one person alleged by defendant to have received benefits from
the ATM withdrawals has provided a receipt, and that defendant had access
to petty cash in his office and did not need to make ATM withdrawals
during business hours, the court includes all ATM cash withdrawals made
by the defendant for which no documentation has been provided in the
court’s determination of loss and finds . . . the inclusion of such
withdrawals to be reasonable.
R., Vol. II at 62. We think this view of the evidence was eminently reasonable. In an
unpublished opinion in similar circumstances we upheld a sentencing determination. See
United States v. Sankey, 430 F. App’x 669, 673–74 (10th Cir. 2011) (defendant handled
tribal funds in a manner that made them untraceable—by cashing cashier’s checks
payable to the tribe—and circumvented tribal policies meant to prevent
misappropriation). The district court did not commit clear error.
10
Defendant raises an additional challenge to the restitution award. He contends that
the government failed to comply with the statutory requirement that the probation office
provide “to the extent practicable, a complete accounting of the losses to each victim.”
18 U.S.C. § 3664(a) (1996); see United States v. Ferdman, 779 F.3d 1129, 1133 (10th
Cir. 2015) (sentencing court cannot “dispense with the necessity of proof . . . and simply
‘rubber stamp’ a victim’s claim of loss based upon a measure of value unsupported by the
evidence”). We reject the argument. The PSR provided adequate detail. There was no
need for the usual accounting to apportion the loss among the victims, because there was
only one victim here.
V. CONCLUSION
We AFFIRM the district court’s sentence and judgment.
11