Case: 16-30907 Document: 00514202493 Page: 1 Date Filed: 10/19/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-30907 FILED
October 19, 2017
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff – Appellee,
v.
MICHAEL DEWAYNE WILLIAMS,
Defendant – Appellant.
Appeal from the United States District Court
for the Western District of Louisiana
No. 5:15-CR-63-1
Before JOLLY and ELROD, Circuit Judges, and STARRETT, District Judge.*
PER CURIAM:**
Michael Dewayne Williams was convicted of eleven counts of wire fraud
in violation of 18 U.S.C. § 1343 in connection with a scheme to fraudulently
obtain money from the Caddo Parish Commission. Williams challenges his
conviction, arguing that it is not supported by sufficient evidence. He also
argues that the district court erred in allowing the introduction of inadmissible
* District Judge of the Southern District of Mississippi, sitting by designation.
**Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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extrinsic evidence and contends that this same evidence constituted a material
variance from the indictment. Williams also challenges his sentence, arguing
that his restitution order was improper. We AFFIRM his conviction and
sentence except as to the restitution order, which we VACATE.
I.
Defendant Michael Dewayne Williams incorporated SWAG Nation USA,
Inc. (SWAG Nation) in September 2012. SWAG Nation focused on character-
building for at-risk youth. 1 After organizing SWAG Nation, Williams did not
have a formal role within the company. However, his now fiancée, Mary
Hughes, was the treasurer.
At the same time, Williams served as a Commissioner on the Caddo
Parish Commission. At a public meeting for the Parish Commission, Williams
moved for a $100,000 appropriation to fund SWAG Nation’s Gentleman’s
Etiquette Academy. Williams voted in favor of this appropriation, and the
measure passed with six votes in favor and five votes in opposition. Williams
did not disclose that he was involved in SWAG Nation. According to a
commissioner’s testimony at trial, commissioners could not vote for
appropriations in which they had a financial interest. This same commissioner
also testified that he would have voted against the measure had he known that
Williams had a financial interest in this appropriation.
After the measure passed, the Parish Commission and SWAG Nation
entered into a contract for a youth etiquette program. Under this contract,
Caddo Parish Juvenile Court recommended participants for the program, and
in turn, SWAG Nation received $350 per participant from the Parish
Commission. The Parish Commission paid SWAG Nation after each program
1 SWAG stands for “Style With American Glory.” SWAG Nation is a program designed
to prepare young men for future education and to help them become productive members of
society.
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concluded. That is, SWAG Nation did not receive funds until the program
concluded.
After SWAG Nation received its first payment from the Parish
Commission, SWAG Nation’s financial manager Harold Robinson and
Williams met to acquire debit cards for SWAG Nation’s bank account. One
debit card was issued in Robinson’s name, and the other card was issued in
Hughes’s name. Williams left that meeting in possession of his fiancée’s debit
card. Over a number of months, Williams used this debit card to make
numerous cash withdrawals from SWAG Nation’s bank account. The
Government presented evidence that Williams’s total debit charges amounted
to $8,590.68. 2
After Williams began withdrawing from SWAG Nation’s bank account,
he told Words in Action, another local organization, about a funding
opportunity with the Parish Commission. Words in Action successfully
obtained a $14,000 grant from the Parish Commission. Following Williams’s
suggestion, Words in Action transferred $9,000 of the grant to SWAG Nation,
and in exchange, SWAG Nation agreed to complete the youth programming.
When SWAG Nation received these funds from Words in Action, its bank
account was negative.
When the Parish Attorney learned about the transfer, she informed all
parties that this transfer violated the specific Words in Action grant
agreement. The Parish Attorney also notified the parties that they would need
to repay the money. Williams himself assured the Parish Attorney that the
money would be returned. However, $6,100 of the $9,000 were never repaid.
During the initial investigation, Williams met with law enforcement
2It is unclear why the district court ordered Williams to pay six dollars less ($8,584.68)
than this amount in restitution, but this differential is not in dispute on appeal.
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officers. In this interview, Williams produced a statement, apologizing for his
conduct. His statement said, “[M]y role in SWAG Nation USA, Inc. was wrong
and unacceptable.” He also acknowledged that he used Hughes’s SWAG Nation
debit card “for personal use.”
Williams pleaded not guilty. At trial, Hughes testified that Williams
used her SWAG Nation debit card, but she claimed he was authorized to use it
as reimbursement for money spent organizing SWAG Nation. She admitted
she did not see any receipts for these expenses. At the conclusion of the
government’s case, Williams moved for a judgment of acquittal pursuant to
Federal Rule of Criminal Procedure 29. The district court denied this motion.
The jury convicted Williams of eleven counts of wire fraud. The district
court sentenced Williams to a term of imprisonment of 14 months and ordered
restitution in the amount of $8,584.68 to the Parish Commission. Williams
timely appealed.
II.
On appeal, Williams argues that the evidence presented at trial was
insufficient to support his conviction. He also contends (1) that the district
court erred in admitting evidence of the $9,000 transfer from Words in Action
to SWAG Nation, and (2) that the introduction of this evidence constituted a
prejudicial, material variance from the indictment. Last, he argues that the
district court erred in its restitution order.
A. Sufficiency of Evidence
Williams challenges the sufficiency of the evidence as to his conviction
under 18 U.S.C. § 1343. Because Williams preserved this issue through his
Rule 29 motion at trial, the standard of review is de novo. United States v.
Davis, 735 F.3d 194, 198 (5th Cir. 2013). We view all evidence in the light most
favorable to the government and draw all reasonable inferences in favor of the
jury’s verdict. United States v. Eghobor, 812 F.3d 352, 362 (5th Cir. 2015).
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“[T]he relevant question is whether, after viewing the evidence in the light
most favorable to the prosecution, any rational trier of fact could have found
the essential elements of the crime beyond a reasonable doubt.” Jackson v.
Virginia, 443 U.S. 307, 319 (1979).
To support a wire fraud conviction, the government must prove: (1) a
scheme to defraud; (2) the use of, or causing the use of, wire communications
in furtherance of the scheme; and (3) a specific intent to defraud. United States
v. Harris, 821 F.3d 589, 598 (5th Cir. 2016). Because the parties stipulated to
Williams’s use of interstate wire communications, the dispute is limited to
whether there was a “scheme to defraud” and whether Williams had the
“specific intent to defraud.”
To prove a scheme to defraud, the government must show that the
defendant made a false or fraudulent material misrepresentation. See Harris,
821 F.3d at 598. Relevant here, a concealment of material facts establishes
common-law fraud, as incorporated into this wire fraud statute. See
Pasquantino v. United States, 544 U.S. 349, 357 (2005). Next, to prove a specific
intent to defraud, the government must show the defendant’s “conscious
knowing intent to defraud.” United States v. Brown, 459 F.3d 509, 519 (5th Cir.
2006) (quoting United States v. Reyes, 239 F.3d 722, 736 (5th Cir. 2001)). Proof
of intent can arise “by inference from all of the facts and circumstances
surrounding the transactions.” United States v. Keller, 14 F.3d 1051, 1056 (5th
Cir. 1994) (quoting United States v. Shively, 927 F.2d 804, 814 (5th Cir. 1991)).
In this case, the evidence was sufficient for a reasonable jury to find
Williams guilty of wire fraud. It is rational to conclude that Williams’s failure
to disclose his relationship with SWAG Nation to the Parish Commission
constitutes a fraudulent material misrepresentation by concealment,
establishing a scheme to defraud. As a commissioner, Williams was prohibited
from voting on an appropriation in which he had a financial interest. Still,
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Williams moved to approve a dispersal of funds and then subsequently took
these funds from the recipient, a corporation he organized. A reasonable jury
could conclude that he did not disclose his relationship with SWAG Nation
because he was orchestrating the vote to obtain these funds for his own use.
Likewise, it was reasonable for the jury to find that Williams had a
specific intent to defraud. With Hughes conspicuously absent, he obtained and
then used a debit card in her name. He also personally instigated a transfer of
funds from Words in Action to SWAG Nation, an organization with which he
had no formal role, when its bank account balance was negative. In addition,
Williams’s own statement acknowledged “inappropriate” wrongdoing and his
personal use of the funds. In light of this evidence, a reasonable jury could infer
that Williams’s self-described “inappropriate” conduct involved a conscious
knowing intent to defraud.
Williams’s sufficiency-of-the-evidence challenge fails.
B. Admissibility of Evidence
Williams next argues that evidence about the transfer of Words in Action
funds to SWAG Nation constituted inadmissible evidence under Federal Rule
of Evidence 404(b). Specifically, he contends that the evidence was extrinsic,
and therefore inadmissible, because the transfer was not part of the alleged
scheme to defraud. Williams argues that the Words in Action grant was
fundamentally different than the unrestricted funding that SWAG Nation
received. Our standard of review for a district court’s evidentiary rulings is
abuse of discretion. United States v. Sanders, 343 F.3d 511, 517 (5th Cir. 2003).
Extrinsic evidence is inadmissible “to prove propensity to commit the
charged crime, see rule 404(a), but may be admissible for other purposes
enumerated under rule 404(b).” United States v. Freeman, 434 F.3d 369, 374
(5th Cir. 2005). However, “[i]ntrinsic evidence is generally admissible.” Id. To
determine whether evidence is intrinsic, courts consider whether the evidence
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is “inextricably intertwined” with the crime charged, whether there was a
“single criminal episode,” or whether the other acts were “necessary
preliminaries” to the crime charged. Id. (quoting United States v. Williams, 900
F.2d 823, 825 (5th Cir. 1990)).
The district court did not abuse its discretion in admitting the evidence
regarding the transfer of Words in Action funds to SWAG Nation because it
was intrinsic to the charged offense involving Williams’s scheme to acquire
funds through SWAG Nation. As alleged in the indictment and advanced to
the jury, Williams devised a scheme to obtain public funds for personal use
through SWAG Nation. Like the SWAG Nation appropriation, the Words in
Action funding was secured from the same source, the Parish Commission,
and—at the suggestion of Williams—placed into SWAG Nation’s bank account,
to which Williams had access. According to the government, Williams arranged
the Words in Action transfer to replenish SWAG Nation’s depleted account,
concealing his fraud and ensuring personal access to funds in the future. Under
the government’s theory, the transfer of Words in Action funds was intertwined
with and a part of Williams’s scheme to obtain funds illegally. As such, the
district court did not abuse its discretion in admitting evidence of this transfer.
C. Material Variance
Williams also contends that the introduction of this same evidence
constituted a material variance from the indictment that prejudiced his
substantial rights. According to Williams, the evidence was prejudicial because
the jury could have inferred that the Parish Commission restricted SWAG
Nation’s and Words in Action’s funds in the same way.
Because the Words in Action funds transfer was intrinsic to the charged
offense, his variance argument lacks merit. See Freeman, 434 F.3d at 375
(holding that because evidence was intrinsic to the charged offense, there was
no variance). As such, his challenge fails.
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D. Restitution Order
Finally, Williams contends that the district court erred in ordering him
to pay restitution to the Parish Commission. According to Williams, because
the Parish Commission received the full benefit of its contract with SWAG
Nation, the Parish Commission is not a victim, and thus, the order of
restitution was improper. Because the district court did not focus on the
pecuniary impact of Williams’s scheme on the Parish Commission, we conclude
that its restitution order is improper.
We review the legality of restitution awards de novo for preserved
challenges. United States v. Rosbottom, 763 F.3d 408, 419 (5th Cir. 2014). The
Mandatory Victims Restitution Act (MVRA) grants the district court the power
to award restitution to victims. 18 U.S.C. § 3663A(a)(1)(A). However,
restitution is limited to “only those losses that resulted directly from the
offense for which the defendant was convicted.” United States v. Maturin, 488
F.3d 657, 660–61 (5th Cir. 2007). Here, the dispute is whether the Parish
Commission is entitled to restitution for any loss.
In ordering restitution, the court must consider the “victims’ loss,” not
the gross gain by the defendant. United States v. Klein, 543 F.3d 206, 215 (5th
Cir. 2008). When services are rendered, this court calculates the victim’s loss
based on the difference between the contract price and the fair market value
of the services rendered by the defendant. See Harris, 821 F.3d at 605 (applying
general loss principles in its review of a district court’s determination of the
amount of loss for sentencing purposes). As a result, the inquiry centers on the
pecuniary impact on the victims themselves. Id. at 606. For example, if the
victim would have paid some amount of money to the defendant regardless of
the fraudulent scheme, then the defendant’s gross gain is not equivalent to the
victim’s loss. See Klein, 543 F.3d at 215; see also Harris, 821 F.3d at 605–08
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(holding that the district court erred when it treated the entire contract price
as loss when victims “got what they paid for”); United States v. Jimenez, 77
F.3d 95, 99–100 (5th Cir. 1996) (holding that a victim under the Victim and
Witness Protection Act suffered no loss when he purchased goods at or below
market price from the defendant).
In this case, we conclude the restitution order was improper. There is
nothing to suggest that the Parish Commission did not receive the services for
which it contracted, nor to suggest that it paid more than the fair market value.
The Parish Commission paid SWAG Nation after the contracted-for program
was held. In doing so, the Parish Commission acknowledged that SWAG
Nation had fulfilled its side of the arrangement. Only after this dispersal of
funds, essentially a payment for SWAG Nation’s services, did Williams begin
withdrawing SWAG Nation funds for his personal use. While his scheme
necessarily involved the Parish Commission, the Parish Commission suffered
no pecuniary loss as a result of Williams’s use of the SWAG Nation’s debit card.
In fact, the Probation Officer testified, based on a phone call with the Parish
Attorney, that the Parish Commission was not reporting this amount as a loss
of income, and it did not consider itself a victim here. 3 Thus, the Parish
Commission was not entitled to restitution.
Nevertheless, without any further explanation, the district court found
that the Parish Commission was the identifiable victim of the fraud and
ordered restitution in the amount of $8,584.68, the amount of money that
Williams charged to the SWAG Nation debit card. Confusingly, the specific
amount of restitution is calculated based on the amount Williams took from
SWAG Nation, via the debit card, and not the amount dispersed from the
3 The district court also noted during sentencing that the Parish Commission did not
pass a resolution to decline to receive or to decline to view itself as the victim in this case.
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Parish Commission: $16,450. Williams has been ordered to pay the Parish
Commission based on the amount of money he took from SWAG Nation. 4
In defense of the restitution order, the government cites United States v.
Crawley, 533 F.3d 349 (5th Cir. 2008). In Crawley, the defendant, a union
president, was ordered to return his salary and pension to the union because
he obtained his president position by voter fraud. 533 F.3d at 359. Similarly,
the government argues that it is appropriate for Williams to repay the Parish
Commission since the appropriation only passed because he did not disclose
his interest in SWAG Nation.
However, Crawley is distinguishable. First, in Crawley, the defendant
argued that only a portion of the restitution award did not constitute an actual
loss to the victim. Id. at 358. By conceding another part of the restitution order
was proper, he implicitly acknowledged that there was some harm to the union,
to justify awarding restitution.
Second, in Crawley, there is no SWAG Nation equivalent lurking in the
background. There, the district court calibrated the restitution order in light
of the victim: the union. Id. at 358–59. Presumably, the union suffered loss
when it paid salary and pension to someone who obtained the position by voter
fraud. In our case, the government contends that the Parish Commission would
not have given money to SWAG Nation if Williams, as a commissioner, had
disclosed his financial interest in the organization. Even if this is true, the
Parish Commission received the very services for which it contracted: youth
programming, and it did not suffer a loss. See Harris, 821 F.3d at 605–08.
“Restitution is remedial in nature; its goal is to make the victim whole.”
United States v. Sanjar, 853 F.3d 190, 215 (5th Cir. 2017). Unlike forfeiture,
4 At the time of Williams’s sentencing, SWAG Nation was defunct.
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restitution is not punitive. Id. When the victim is already whole—having
already received contracted-for benefits—restitution is not appropriate.
As the restitution order stands now, it is not focused on the pecuniary
impact on the Parish Commission, the identified victim, and as such, it is
improper.
III.
For the foregoing reasons, we AFFIRM his conviction and sentence
except as to the restitution order, which we VACATE.
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