United States v. Hildenbrand

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
May 13, 2008
No. 07-10210
Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff-Appellee
v.

BARBARA HILDENBRAND
Defendant-Appellant

consolidated with
No. 07-10211

UNITED STATES OF AMERICA
Plaintiff-Appellee
v.

GERALD STONE
Defendant-Appellant

Appeal from the United States United States District Court
for the Northern District of Texas, Dallas Division

Before DAVIS and SOUTHWICK, Circuit Judges, and DRELL, District Judge:*
W. EUGENE DAVIS:
Defendants Barbara Hildenbrand and Gerald Stone appeal their guilty
plea convictions for defrauding the Department of Housing and Urban
Development, conspiring to steal from an organization receiving federal funds,
and tax evasion primarily on the basis that the factual resumes submitted in

*
District Judge for the Western District of Louisiana, sitting by designation.
 No. 07-10210 cons. with No. 07-10211

support of their guilty pleas are insufficient to support their convictions of these
crimes. We disagree and affirm appellants’ convictions. Because of our
disposition of this threshold issue and the appeal waiver in their plea
agreements, we do not reach any other issues raised by the defendants and
dismiss the appeals of their sentences.
I.
Barbara Hildenbrand conducted business in the name of Community
Housing Fund (CHF), a § 501(c)(3) nonprofit organization out of Irving, Texas.
CHF was formed for the purpose of providing affordable housing to low-income
persons. Hildenbrand was the president of CHF and responsible for all
operations. CHF was selected to participate in HUD’s Single Family Affordable
Housing Program (SFAHP or “the program”), which was designed to help
persons with low-to-moderate incomes purchase affordable homes. Under the
SFAHP, HUD offered certain of its properties to nonprofit companies for
purchase at discounted prices, usually 10% to 30% below the fair market value.
Through CHF, Hildenbrand purchased discounted homes from HUD under
the program. She then engaged contractors to rehabilitate the houses for sale.
Hildenbrand used several contractors to perform the rehabilitation work on the
houses CHF purchased, but Gerald Stone, who later became her husband and
who conducted business under the name of Ranscott Construction, Inc. (RCI),
performed the vast majority of the repair and warranty work on the program
houses.
HUD created the SFAHP to sell properties at a discount to nonprofits, who
would then pass on the discount received from HUD to increase home ownership
opportunities for low- and moderate-income families and individuals. The
agency has rules about the price nonprofits could realize from the property - for
example, limiting the sales price of properties sold at a 30% discount to a
maximum of 110% of the net development cost of the property. Rehabilitation

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expenses are an allowable cost in calculating net development cost. Thus if
Hildenbrand’s and Stone’s scheme fraudulently increased the development cost
of a property, it would in turn increase the property’s allowable sales price thus
thwarting the goal of the program to pass the discount granted by HUD onto the
ultimate home owner or renter.
In her factual resume, Hildenbrand made admissions regarding her
purchase of two discounted houses from HUD under the SFAHP. On January
25, 1999, she purchased, through CHF, residential property at 5720 Forest Oaks,
Dallas, at a 30% discount, worth $5,025. On December 6, 1999, she purchased
a residence at 2449 Maverick, also in Dallas, for which she received a 30%
discount, worth $15,900. Hildenbrand stipulated that she received the discounts
for the purchase of these two homes from HUD with the intent to defraud HUD
and unlawfully to defeat its purposes. Hildenbrand used Stone, through RCI,
to perform the repair work on the program homes. Hildenbrand admitted that,
by using CHF money, she and Stone defrauded HUD and defeated the purposes
of the SFAHP by increasing the costs associated with the particular houses
through improper payments to RCI. This in turn increased the ultimate prices
of the residences, making them less affordable to the low income purchasers of
the homes, the intended beneficiaries of the program.
Specifically, Hildenbrand and Stone engaged in a conspiracy to steal funds
from CHF by writing checks to RCI and by falsely documenting the stolen money
as being related to repair costs payable to RCI. Hildenbrand admitted issuing
a CHF check on January 20, 2000, for $24,000, payable to cash, used to purchase
a Florida cashier’s check in the same amount payable to a realty escrow account
for the purchase of a condominium in Stone’s name. She further admitted
issuing a CHF check on January 28, 2000, for $222,927.73, payable to cash,
which was used to purchase another cashier’s check, which was in turn used to
purchase the condominium in Stone’s name. On the same date, Stone used the

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$246,927.73 in CHF funds to purchase a condominium in North Palm Beach,
Florida.
On or about May 8, 2000, Hildenbrand issued a CHF check for $246,500,
payable to RCI, which Stone endorsed back to CHF to document the CHF funds
he had already received for the January 2000 condominium purchase. On the
same date, Hildenbrand, aided by CHF’s bookkeeper, falsely documented in CHF
records that $30,000 of the payments related to the January 2000 condominium
purchase were for work performed by Stone in relation to the addresses at 5720
Forest Oaks and at 2449 Maverick. However, CHF’s books reflected that final
payment had been made to RCI for work done on both properties. For example,
CHF acquired the house on Maverick on December 10, 1999; it paid RCI $500
on that date and an additional $5,500 on January 7, 2000, for rehabilitation
work. The January 7, 2000, payment was marked “final,” by the RCI invoice and
CHF records. However, on May 8, 2000, CHF paid RCI an additional $20,000
for supposed rehabilitation work on the Maverick residence. The funds for that
additional payment were lumped with a number of other payments used to
document funds previously paid to RCI through the CHF checks issued on
January 20 and 28, 2000 for the Palm Beach Condo. The invoices for work on
the Forest Oaks residence had similarly been marked “final” on June 1, 1999,
but on May 8, 2000, CHF paid RCI an additional $10,000 for supposed
rehabilitation work on that address.
Investigation revealed that Hildenbrand, operating through CHF,
purchased at least 23 houses in Texas and Florida during 1999 and 2000 from
HUD under the SFAHP, receiving discounts totaling $152,906.80 as inducement
to purchase the homes. CHF would secure interim financing for program houses
without disclosing to the banks the discount it received from HUD; it would use
those funds to pay RCI to rehabilitate the homes. In many instances, the actual
cost to rehabilitate the houses was less than the amount paid to RCI.

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Additionally, HUD requires that SFAHP participants use independent,
unrelated contractors for work on program properties. In violation of this rule,
Stone was intimately involved with Hildenbrand’s business dealings, and was
listed on bank documents as CHF’s area manager and vice president, with
cosignatory authority on CHF’s bank account.
In his factual resume, Stone admitted that he and Hildenbrand willingly
conspired to embezzle, convert, and misapply property in excess of $5,000 owned
by an organization receiving federal assistance, in violation of 18 U.S.C. § 666.
Specifically, Stone admitted that he and Hildenbrand stole and unlawfully
converted money from CHF bank accounts for non-business-related purchases,
then falsely claimed that portions of the payments were made for legitimate
rehabilitation work performed by Stone through RCI. The factual resume listed
23 homes purchased by CHF from HUD under the SFAHP in Texas and Florida
at discounts of 10% to 30% below the fair market value. Stone admitted that he
coordinated the repair and warranty work on the Texas homes but that
Hildenbrand hired a different contractor to do the work on the Florida
residences.
For the Texas homes, Hildenbrand had the CHF bookkeeper make entries
showing amounts paid to Stone were for rehabilitation of properties in Texas
that had previously been marked as having received “final payment.” For
example, CHF purchased a residence at 1502 Bayshore in Garland, Texas, in
March 1999; it paid RCI $10,000 on March 25, 1999, for rehabilitation work and
paid $5,000 on June 7, 1999, which payment was marked “final” by RCI and
CHF records. Over one year later, on July 6, 2000, CHF paid RCI an additional
$165,400 for supposed rehabilitation work on the Bayshore house. The funds for
this payment were lumped in with a number of other payments used to
document funds previously paid to RCI through a CHF check on March 13, 2000,
in the amount of $212,500.

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Additionally, Hildenbrand had the CHF bookkeeper document falsely that
several amounts paid to Stone on January 20 and 28, 2000, were related to
rehabilitation of properties in St. Petersburg and Ft. Lauderdale, Florida,
despite the fact that Stone did not perform any work on those Florida properties.
Stone stipulated that the listed payments were not legitimate and constituted
theft from CHF; he further conceded that, in 2000, he received $459,427.73, in
unlawfully converted funds from CHF, which money he used to purchase the
aforementioned condominium and a $212,500 yacht known as the “Shelby Jean.”
Stone additionally admitted that the $459,427.73 qualified as taxable
income for federal income tax purposes, which income he intentionally failed to
report on his 2000 individual tax return, filed on July 27, 2001. Stone conceded
that he willfully attempted to evade and defeat a large part of the income tax
due to the U.S. for the calendar year 2000. As a result of his intentional failure
to report his true income, Stone admitted that he failed to report and pay
additional taxes in the amount of $179,479 to the U.S. for the 2000 tax year.
Hildenbrand and Stone were charged in a 36-count indictment with
conspiracy to steal from an organization receiving federal assistance, in violation
of 18 U.S.C. §§ 666 and 371 (count 1); defrauding HUD, in violation of 18 U.S.C.
§ 1012 (counts 2 through 24); theft from an organization, in violation of 18 U.S.C.
§ 666 (counts 25-27); money laundering, in violation of 18 U.S.C. § 1957 (counts
28-33); and, as to Stone, two counts of tax evasion, in violation of 26 U.S.C.
§ 7201 (counts 34-35).1
Hildenbrand pleaded guilty, pursuant to a written plea agreement, to
counts 2 and 3 of the indictment, two counts of defrauding HUD. As part of her
plea, Hildenbrand waived the right to appeal or collaterally challenge her
conviction and sentence, except as to 1) a sentence exceeding the statutory

1
Count 36 alleged forfeiture of assets.

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maximum; 2) a sentence resulting from arithmetic error; 3) a challenge to the
voluntariness of her plea or waiver; and 4) claims of ineffective assistance of
counsel. The substance of the factual basis for her plea is set forth above.
Following a Rule 11 hearing before a magistrate judge, the district court
accepted Hildenbrand’s plea as knowing, voluntary, and supported by a
sufficient factual basis.
Stone similarly pleaded guilty, pursuant to a written plea agreement, to
count 1, conspiracy to commit theft against an organization, and to count 35, tax
evasion by knowingly filing a fraudulent tax return for the year 2000. Stone’s
written plea agreement also contained a waiver-of-appeal provision identical to
the waiver provision in Hildenbrand’s plea agreement. Following a Rule 11
hearing before a magistrate judge, Stone’s plea was also accepted as knowing,
voluntary, and supported by a sufficient factual basis.
The PSR determined Hildenbrand’s guidelines range at 18 to 24 months
of imprisonment, though the statutory maximum was 12 months. Stone’s PSR
determined his guidelines range at 24 to 30 months of imprisonment. Both PSRs
recommended restitution to HUD, characterizing HUD as the victim of the
offenses.
Hildenbrand and Stone both objected to the PSR, not on the ground that
the offense-level calculations were incorrect, but on the ground that the facts as
described in the offense conduct showed that no crime was in fact committed.
They further objected to the recommended restitution. Hildenbrand separately
filed a motion to dismiss due to the insufficiency of the factual basis for her plea,
which motion was denied. The probation officer recommended that the
objections be overruled, determining that the defendants’ allegations were
refuted by their factual resumes, and that, inasmuch as they sought to withdraw
their guilty pleas, the three-level acceptance-of-responsibility reductions should
be rescinded.

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The defendants were jointly sentenced. The district court overruled both
defendants’ objections to the PSR, specifically determining that Hildenbrand’s
plea was supported by admissions of fact that satisfied each element of the
charged offenses and that Stone’s factual resume similarly satisfied each
element of the charged offenses. The district court declined to award either
defendant credit for acceptance of responsibility; in Stone’s case, the resulting
guidelines range was 27 to 33 months. The district court sentenced Stone below
the guidelines range, to 24 months on each count, to run concurrently, and
ordered him to pay restitution in the amount of $263,516 to the IRS and
$672,221 to HUD, owed jointly and severally with Hildenbrand. It sentenced
Hildenbrand to the statutory maximum of 12 months on each count, to be served
consecutively, for a total of 24 months, and ordered her to pay $672,221, jointly
and severally with Stone, in restitution to HUD. The defendants timely
appealed.
II.
The defendants renew their arguments that there is an insufficient factual
basis for their pleas. The Government counters that their arguments are barred
by the waiver of appeal provisions in their written plea agreements. Neither
defendant argues that their plea, or the waiver provision, was unknowing or
involuntary. Instead, they argue that the waiver does not bar review of their
claims that the factual basis is insufficient to support their pleas. This court
reviews de novo whether a waiver of appeal bars an appeal. United States v.
Baymon, 312 F.3d 725, 727 (5th Cir. 2002).
Even valid waivers do not bar a claim that the factual basis is insufficient
to support the plea. See Baymon, 312 F.3d at 727 (“[E]ven if there is an
unconditional plea of guilty or a waiver of appeal provision in a plea agreement,
this Court has the power to review if the factual basis for the plea fails to
establish an element of the offense which the defendant pled guilty to.”); United

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States v. Jacquez-Beltran, 326 F.3d 661 (5th Cir. 2003)(Waiver enforced because
the allegation of the indictment and the stipulations supporting the plea satisfy
the essential elements of the offense); cf. United States v. Inguanzo, 166 Fed.
Appx. 110, 111 (5th Cir. 2006) (“Whether a defendant can waive his right to
appeal on the ground that there was an insufficient factual basis to support his
guilty plea is an open question in this circuit.”). The purpose of the rule is to
protect a defendant who may plead guilty with an understanding of the nature
of the charge, but without realizing that his conduct does not actually fall within
the definition of the charged crime. Baymon, 312 F.3d at 727. Accordingly, this
court must review the merits of the claims that the factual basis is insufficient
to support the defendants’ pleas.
On each count, if the factual basis is found to be sufficient to support the
plea, then the plea agreement can be upheld and the waiver of appeal provision
would bar any additional arguments raised on appeal. See Baymon, 312 F.3d at
729 (concluding, after addressing the sufficiency of the factual basis for the plea
and finding it adequate, that the waiver-of-appeal provision barred consideration
of the defendant’s remaining sentencing arguments). If the factual basis is not
sufficient as to any count, the conviction should be vacated, and the case
remanded for further proceedings without consideration of any additional issues
raised. See United States v. Carter, 117 F.3d 262, 265 (5th Cir. 1997)(Conviction
reversed, sentence vacated and case remanded for further proceedings.)
III.
We turn then to whether each defendant’s factual basis is sufficient to
support his or her respective guilty pleas. A district court cannot enter a
judgment of conviction based on a guilty plea unless it is satisfied that there is
a factual basis for the plea. FED. R. CRIM. P. 11(b)(3). The district court must
compare “(1) the conduct to which the defendant admits with (2) the elements

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of the offense charged in the indictment or information.” United States v. Marek,
238 F.3d 310, 315 (5th Cir. 2001) (en banc).
As both defendants objected on this basis in the district court, this court
regards the district court’s acceptance of a guilty plea as a factual finding to be
reviewed for clear error. United States v. Adams, 981 F.3d 505, 509 (5th Cir.
1992). “A factual finding is not clearly erroneous as long as it is plausible in
light of the record as a whole.” United States v. Gonzales, 436 F.3d 560, 584 (5th
Cir.2006) (internal quotation omitted).
When determining whether there is a factual basis for a guilty plea,
inferences may be “fairly drawn” from the evidence adduced after the acceptance
of a guilty plea but before or at sentencing. United States v. Dyer, 136 F.3d 417,
425 n.13 (5th Cir. 1998). “If sufficiently specific, an indictment or information
can be used as the sole source of the factual basis for a guilty plea.” Adams, 961
F.2d at 509; United States v. Bachynsky, 949 F.2d 722, 730 (5th Cir. 1991)
(record read in pari materia with indictment established that a factual basis
existed); cf. United States v. Boatright, 588 F.2d 471, 475-76 (5th Cir. 1979)
(indictment not adequate when defendant was charged with conspiracy and
indictment failed to allege facts tying defendant to the same). The PSR may also
be considered in determining whether there was a sufficient factual basis to
support a defendant’s guilty plea so long as the court indicates on the record that
it relies on the PSR. See Adams, 961 F.2d at 509, n. 3.
a. Hildenbrand’s guilty plea for defrauding HUD under § 1012
Hildenbrand argues that the facts as pleaded do not establish that she
committed the offense of defrauding HUD. Section 1012 provides, in pertinent
part, that “[w]hoever receives any compensation, rebate, or reward, with intent
to defraud [HUD] or with intent unlawfully to defeat its purposes . . . shall be
fined under this title or imprisoned no more than one year, or both.” 18 U.S.C.
§ 1012. Hildenbrand argues that her factual basis does not support a conviction

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under this section for the following reasons: 1) CHF committed the offense, not
her personally; 2) the discounted home prices CHF received from HUD through
the SFAHP do not qualify as “compensation, rebate, or reward;” and 3) there is
no evidence that she intended to defraud HUD.
Hildenbrand’s contentions that there is no evidence to show that she,
rather than CHF, committed the offense or to show that she intended to defraud
are defeated by the specific admissions in her factual resume. She stipulated
both that she was the president of and decision maker for CHF and that her
intent was to defraud HUD and to unlawfully defeat its purposes under the
SFAHP. The Factual Resume states “Hildenbrand conducted business in the
name of Community Housing Fund (CHF)”, “Hildenbrand, by and through the
nonprofit organization CHF, received money and benefits” and “Hildenbrand
agrees and stipulates that she received the above discounts from HUD with the
intent to defraud HUD and with the intent unlawfully to defeat its purposes.”
Her claim that the 30% discount she received on the two home purchases
implicated in her plea do not qualify as “compensation, rebate or reward” within
the meaning of the statute is similarly unavailing. Hildenbrand argues that the
terms “compensation, rebate or reward” are not statutorily defined and that
their common meanings do not encompass a discount. She essentially contends
that the statute contemplates only some form of direct payment and, as a result,
because she, through CHF, did not receive any direct payment from HUD, her
conduct does not violate the statute.
Hildenbrand is correct that the terms “compensation,” “rebate,” and
“reward” are not statutorily defined, and research reveals no case from this or
any other circuit to provide guidance on the issue. However, a “discount” is
clearly encompassed within the ordinary, common-sense meaning of the term
“reward,” such that the district court’s conclusion that the factual basis was
sufficient was not clearly erroneous.

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Absent a statutory definition or definitive clue, the meaning of the term
“reward,” must be given its ordinary, “everyday meaning.” See Watson v. United
States, 128 S. Ct. 579, 583 (2007) (internal quotation marks and citation
omitted). Contrary to Hildenbrand’s assertion, the everyday meaning of the
term “reward,” is broad enough to contemplate more than a direct payment to
the recipient. Rather, Webster’s Third New International Dictionary (1981)
defines “reward” as “something that is given in return for good or evil done or
received . . . and esp. that is offered or given for some service or attainment.” We
have no difficulty concluding that a 30% discount offered on a home purchase
price in exchange for nonprofit organizations participating in the SFAHP falls
within the reach of the broad phrase “something given” in exchange for “some
service.”2
b. Sufficiency of the Factual Basis for Stone’s §§ 371 and 666
Convictions.
Stone also challenges the sufficiency of the factual basis to support his
pleas. First, he contends that the facts were insufficient to support his plea
under count 1, conspiracy to commit theft against an organization receiving
federal assistance, in violation of 18 U.S.C. §§ 371 and 666. Section 666 applies
to an “organization, government, or agency [that] receives, in any one year
period, benefits in excess of $10,000 under a Federal program involving a grant,
contract, subsidy, loan, guarantee, insurance, or other form of Federal
assistance.” 18 U.S.C. § 666(b). The section to which Stone pleaded guilty
prohibits any agent of the organization from embezzling, stealing, defrauding,
or unlawfully converting property of the organization valued at $5,000 or more.
18 U.S.C. § 666(a)(1)(A). Section 371 makes it unlawful for two or more persons
to conspire to defraud the U.S. or any of its agencies.

2
See also our discussion of the similar term “benefit” infra under § 666 relating to
Stone’s conviction.

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Stone does not challenge the sufficiency of the factual basis to establish a
conspiracy. To the extent that he now seeks to challenge his plea on the ground
that he did not actually commit any wrongdoing, that he was entitled to all CHF
payments he received, that CHF followed all HUD rules and regulations, and
that the Government erroneously relied on CHF’s internal bookkeeping records
to prove the offense, the claims lack merit. The allegations that neither Stone
nor CHF committed any wrongdoing are directly refuted by the sworn
admissions in Stone’s factual resume, which he has never attempted to
withdraw. Moreover, Stone does not explain why the Government could not rely
on CHF’s bookkeeping records to prove the offense particularly in light of that
factual resume. Stone’s factual resume lists payments to Stone that he admits
were not legitimate, i.e. for work he did not actually perform.
The majority of Stone’s brief is devoted to the argument that the facts are
insufficient to establish a violation of § 666. Similar to the argument
Hildenbrand raises, Stone urges that the 10% to 30% discounts CHF received
under the SFAHP do not qualify as “benefits” under a federal program involving
any “federal assistance” within the meaning of § 666 because such terms
contemplate the payment and disbursement of federal funds. He contends that
the discounts were merely an incentive and that § 666 does not apply here,
where the two parties, HUD and CHF, were engaged in a quid pro quo, purely
commercial transaction, with both parties deriving a benefit from the venture.
Stone is correct that the term “benefit” is not statutorily defined.
Research reveals no case from this or any other circuit addressing the question
whether a HUD discount to a nonprofit organization under the SFAHP
constitutes a “benefit” within the meaning of that section. Although, as above,
it appears that the term “discount” is encompassed within the ordinary,
“everyday meaning” of the term “benefit,” the inquiry does not end there as the
term “federal assistance” is similarly undefined.

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Merriam-Webster’s Collegiate Dictionary (10th ed. 2002) defines “benefit”
as “something that promotes well-being: ADVANTAGE;” or a “useful aid:
HELP.” As the Government argues, a discount is, by its very nature, a benefit
to the person who receives it; it provides an advantage, useful aid, and help to
the recipient. Stone’s argument that his construction of “benefit” comports with
common sense is unpersuasive. The argument is purely one of form over
substance. Although received in the form of a discount, it is undisputed that
CHF received a quantitative monetary benefit from HUD through the discounts
under the SFAHP. Stone’s factual resume lists the monetary value of each
discount received by CHF in its purchase of program homes from June 1999
through March 2000, which discounts totaled $152,906.80.3
Nevertheless, Stone urges that CHF was not an organization covered by
§ 666(b) because there was no federal assistance in the absence of any loan or
other direct financial assistance from HUD. Even if it is assumed that a
discount constitutes a benefit within the meaning of § 666, the benefit must be
received through a federal program “involving a grant, contract, subsidy, loan,
guarantee, insurance, or other form of Federal assistance.” 18 U.S.C. § 666(b).
This court has recognized that § 666's definition of federal program and federal
assistance is “ambiguous.” United States v. Marmolejo, 89 F.3d 1185, 1189 (5th
Cir. 1996), aff’d sub nom. Salinas v. United States, 522 U.S. 52 (1997)(Sheriff
housing federal prisoners found guilty of violation § 666 for accepting bribes
from prisoners in exchange for conjugal visits). “Although it is clear that the
assistance can consist of a grant, contract, subsidy, loan, guarantee, or
insurance, the other defining qualities of ‘Federal assistance’ are still unclear.”
Id. This court held that the term should be broadly construed. Id.

3
That the benefit is intended ultimately to pass to the low-to-moderate-income purchaser of
the program homes does not change the result. See Fischer v. United States, 529 U.S. 667, 677
(2000) (recognizing that there may be multiple beneficiaries of federal programs).

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The Supreme Court has described the coverage of § 666 as “expansive,
both as to the [conduct] forbidden and the entities covered.” See Fischer,
529 U.S. at 678 (internal quotation marks and citation omitted). This court has
noted that “the extent of the federal government’s assistance programs will bring
many organizations and agencies within the statute’s scope,” but cautioned that
“the statute limits its reach to entities that receive a substantial amount of
federal funds.” United States v. Westmoreland, 841 F.2d 572, 578 (5th Cir.
1988). In Marmolejo, this court stated that the legislative history behind § 666
“was to protect the integrity of federal funds by punishing theft and bribery
involving Federal programs for which there is a specific statutory scheme
authorizing the Federal assistance in order to promote or achieve certain policy
objectives.” 89 F.3d at 1190 (internal quotation marks and citation omitted).
For example, health care organizations participating in Medicare are
organizations covered by § 666(b). See Fischer, 529 U.S. at 681-82.
Stone appears to urge that the legislative history supports his conclusion
that an organization must be the recipient of some direct federal financial
assistance to fall within § 666(b). The Government acknowledges that the
legislative history indicates that § 666 is designed to protect federally disbursed
funds, but it does not squarely address the question whether the statute reaches
federal programs that offer some monetary benefit but do not directly disburse
funds. Because there is a statutory scheme authorizing the discounts on SFAHP
homes and because the scheme furthers the public policy objectives of both
expanding home ownership opportunities for low- and moderate-income
purchasers and strengthening neighborhoods, we conclude that participation in
the SFAHP qualifies as federal assistance.
No cases address the narrow question whether a nonprofit organization
receiving discounts on home purchase prices for participating in the SFAHP
through HUD is a covered organization under § 666(b) because it receives the

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qualifying benefits under a qualifying federal-assistance program. Based on
Fischer, SFAHP qualifies as a program receiving federal assistance for purposes
of the statute. In Fischer, the defendant was convicted of defrauding a hospital.
529 U.S. at 682. The hospital was a Medicare provider authorized to treat
patients covered by Medicare. The Supreme Court found that the funds the
hospital received from Medicare patients were benefits under § 666 because the
hospital derived significant advantages through satisfaction of the Medicare
participation standards imposed by the government. “[I]t cannot be disputed the
providers themselves derive significant advantage by satisfying the participation
standards imposed by the Government. These advantages constitute benefits
within the meaning of the federal bribery statute, a statute we have described
as ‘expansive,’ ‘both as to the [conduct] forbidden and the entities covered.’” Id.
at 678.
CHF similarly received advantages as a result of satisfying the standards
for participating in the SFAHP, which is part of a federal statutory scheme to
promote public policy objectives. CHF as well as the renters and buyers of the
homes bought and rehabilitated through the program are both beneficiaries of
the federal program. See Fischer, 529 U.S. at 677-678. Accordingly, the SFAHP
is a federal program involving federal assistance and Stone’s challenge to his §§
371 and 666 convictions on this basis fails.
c. Sufficiency of the Factual Basis for Stone’s § 7201 Conviction.
Stone additionally challenges the sufficiency of the factual basis to support
his guilty plea to tax evasion for the year 2000. To establish a violation under
26 U.S.C. § 7201, the Government must prove the following elements: 1) a tax
deficiency; 2) an affirmative act constituting an evasion or attempted evasion of
the tax; and 3) willfulness. United States v. Sallee, 984 F.2d 643, 646 (5th Cir.
1993).

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 No. 07-10210 cons. with No. 07-10211

Stone now argues that the factual basis is insufficient to support his plea
because the Government failed to establish that the income he was charged with
failing to report was actually earned in the calendar year 2000; rather, he now
contends that the income was earned in 1999. He further argues that the
Government failed to prove any willfulness on his part.
Stone’s arguments are squarely controverted by his sworn admissions in
the factual resume supporting his plea. Specifically, Stone stipulated that he
willfully failed to report $459,427.73 in earned income for the year 2000 by filing
a fraudulent tax return and that he knowingly failed to report and pay an
additional tax of $179,479 for the 2000 tax year. These stipulated facts establish
each element of the § 7201 offense, and Stone’s challenge to the sufficiency of the
factual basis for his plea to count 35 thus fails.
IV.
For the foregoing reasons, we find that the factual resumes submitted in
support of Hildenbrand’s and Stone’s guilty pleas are sufficient to sustain their
convictions. The remaining issues appellants raise are related to their
sentences. Because the defendants waived their right to appeal their sentences,
we DISMISS THE APPEAL of their sentences, and AFFIRM their convictions.

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