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United States v. Osborne

United States Court of Appeals, Sixth Circuit

March 29, 2018

United States of America, Plaintiff-Appellee,
v.
Aaron L. Osborne, Defendant-Appellant.

          Argued: December 6, 2017

          Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 3:13-cr-00125-3-Kevin H. Sharp, District Judge.

         ARGUED:

          Andrew C. Brandon, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Nashville, Tennessee, for Appellant.

          John P. Taddei, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

         ON BRIEF:

          Andrew C. Brandon, Ronald C. Small, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Nashville, Tennessee, for Appellant.

          Stephanie N. Toussaint, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

          Before: CLAY, GIBBONS, and BUSH, Circuit Judges.

          OPINION

          CLAY, Circuit Judge.

          Defendant Aaron Osborne ("Osborne") appeals from the judgment of conviction and sentence entered by the district court for aiding and abetting the theft of government money in violation of 18 U.S.C. § 641 and 18 U.S.C. § 2. For the reasons set forth below, we REVERSE Osborne's conviction and VACATE his sentence.

         BACKGROUND

         This case arises out of the Guard Recruiting Assistance Program ("G-RAP"), a civilian-run program designed to increase recruiting to the Air National Guard ("ANG") during the "War on Terror." The program was intended to incentivize airmen, officers, and retirees to serve as Recruiting Assistants ("RAs"). The program was run by Document and Packaging Brokers, Inc. ("Docupak"), a private corporation. Docupak was responsible for selecting RAs from the pool of applicants and training them. The RAs were to reach out into their communities to find potential future airmen, and then direct those potential airmen to full-time recruiters, who would sign up the new recruits. The program provided a monetary incentive to the RAs to sign up people to the ANG and encourage them to complete the training process. The RAs would receive a $1, 000 pre-loaded Visa gift card upon actual enlistment of the potential airman and an additional $1, 000 upon the airman's completion of basic training. The government argues that a central rule of the G-RAP program was that the RAs were required to "identify individuals that were not already working with a full time ANG Recruiter" and that the RAs were prohibited from splitting the G-RAP payment with full-time recruiters. (R. 1, Indictment, PageID at # 1-2.) This rule gave rise to the criminal charges against Osborne and his co-defendants.

         Osborne was a full-time recruiter for the ANG. He was accused of working with two RAs, Arvalon Michelle Harleston ("Harleston") and Max P. Andolsek ("Andolsek"), to share in the cash incentives offered by the program. Essentially, Osborne was accused of referring names of pre-existing recruits to Harleston and Andolsek so that they could claim the recruiting incentive. Harleston and Andolsek would then pay kickbacks to Osborne. Osborne, Andolsek, and Harleston were charged in a seven-count indictment. Relevant for this appeal is Count Four, which alleged that Osborne aided and abetted Andolsek in embezzling, stealing, purloining, or converting "money or a thing of value greater than $1, 000 from the United States Department of Defense" in violation of 18 U.S.C. § 641 and 18 U.S.C. § 2. (Id. at # 11.) Specifically, the indictment alleged that Andolsek, aided and abetted by Osborne, represented that approximately 18 potential airmen had been recruited by Andolsek in compliance with G-RAP rules, when they really had not been, which "caused the United States Department of the Defense to reimburse Docupak for approximately $9, 000 in payments it made to him under the G-RAP." (Id. at 11- 12.) Andolsek pleaded guilty prior to trial and testified against Osborne at trial.

         At the close of the government's case-in-chief and again at the close of all the evidence, Osborne moved for a judgment of acquittal. He argued that the theft of the funds was not a prosecutable offense because the funds were stolen from a private contractor, and not a governmental agency, and because in doing so Defendants only violated Docupak's internal policy, and not a federal rule or regulation. The district court denied both motions. The jury convicted Osborne on the one count of aiding and abetting Andolsek in the theft of government funds (Count 4) and acquitted him on the remaining six counts. The jury acquitted Harleston on all counts.

         On October 5, 2015, Osborne filed a post-trial motion for judgment of acquittal under Federal Rule of Criminal Procedure 29(c). In his motion, he argued that the verdict should be set aside because: "(1) the government failed to produce evidence sufficient to allow a reasonable jury to conclude that the allegedly stolen funds were 'government property'; and (2) the jury's verdicts finding that Mr. Osborne did not conspire with Mr. Andolsek to steal from the government or to make false claims to the government are entirely inconsistent with their verdict finding that Mr. Osborne did aid and abet Mr. Andolsek in a 'theft' of government property." (R. 136, Mot. for J. of Acquittal, PageID # 922.)

         On April 5, 2016, the district court denied Osborne's motion. With regard to the first claim, the district court found that "a reasonable jury could have found that the finder fees paid in this case were a 'thing of value' to the United States." United States v. Osborne, 180 F.Supp.3d 507, 513 (M.D. Tenn. 2016). The district court reasoned that "the Department of Defense created the G-RAP program and Docupak executed it, " "Docupak received federal funds to run the G-RAP program, " "the Government placed restrictions on how G-RAP funds could be used, " and "Docupak was required to submit monthly, quarterly and annual reports to the Department of Defense, and agreed to comply with other mandatory reporting requirements as mandated by the Secretary of the Army and his designee." Id. at 513-14. With regard to the second claim, the district court found that the verdicts were not mutually exclusive.

          The district court sentenced Osborne to time served, two years supervised release, a $10, 000 fine, and $9, 000 in restitution. Judgment was entered against Osborne on December 5, 2016.

         Osborne timely filed a notice of appeal that same day. On appeal, he argues that there is insufficient evidence to sustain his conviction for theft of government property because the government failed to prove that the money involved was "government property" or that it was "stolen."

         DISCUSSION

         I. MONEY OF THE UNITED STATES

         Standard of Review

         This Court reviews a district court's denial of a motion for judgment of acquittal de novo. United States v. Graham, 622 F.3d 445, 448 (6th Cir. 2010). When considering a challenge to the sufficiency of the evidence, "the 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) (emphasis in original). "All reasonable inferences and resolutions of credibility are made in the jury's favor." United States v. Tragas, 727 F.3d 610, 617 (6th Cir. 2013) (quoting United States v. Washington, 702 F.3d 886, 891 (6th Cir. 2012)). "We may not 'weigh the evidence presented, consider the credibility of witnesses, or substitute our judgment for that of the jury.'" Graham, 622 F.3d at 448 (quoting United States v. M/G Transp. Servs., Inc., 173 F.3d 584, 588-89 (6th Cir. 1999)).

         Courts have treated the ultimate question of whether something is government property as a legal question for a court to review de novo. See United States v. Foulks, 905 F.2d 928, 929-30 (6th Cir. 1990); United States v. McKay, 274 F.3d 755, 759 (2d Cir. 2001); United States v. Littriello, 866 F.2d 713, 716 (4th Cir. 1989); United States v. Long, 996 F.2d 731, 732 (5th Cir. 1993) ("When the question of ownership of property depends upon the construction or existence of a statute, it is a matter of law for the court's determination, and therefore subject to de novo review.") (reversed on other grounds). Again, while ...


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