994 F.3d 123
3d Cir.2021Background
- David T. Shulick owned Delaware Valley High School Management (DVHS) and contracted with the School District of Philadelphia to operate Southwest School for the 2010–11 and 2011–12 school years; the contract specified staffing and fixed budget line items and gave DVHS managerial control over operations.
- DVHS received roughly $2.1 million but spent only about $1,186,001 on Southwest; Shulick hired fewer teachers, cut salaries/benefits, omitted promised counselors and security, and directed unspent funds elsewhere.
- Shulick diverted significant funds to co-conspirator Chaka Fattah, Jr., who used the money to pay Shulick’s other obligations and kept a cut.
- After a multi-year investigation Shulick was indicted in October 2016 on conspiracy, federal-program embezzlement (18 U.S.C. § 666), bank fraud, false statements to a bank, and tax-counts; convicted in May 2018 after a three-week trial.
- District Court sentenced Shulick (including 60 months for several counts, consecutive tax sentences, restitution and forfeiture); Shulick appealed raising speedy-trial (statutory and Sixth Amendment), evidentiary exclusions, jury-instruction errors under § 666, and sentencing/loss calculations.
- The Third Circuit reviewed each claim (de novo or abuse-of-discretion as appropriate) and affirmed the conviction and sentence.
Issues
| Issue | Shulick's Argument | Government's Argument | Held |
|---|---|---|---|
| Statutory Speedy Trial Act continuance after government discovery misfiling | Continuance was improper because delay resulted from the Government's lack of diligent preparation and § 3161(h)(7)(C) forbids continuances for Govt culpability | The production was a one‑time inadvertent mistake; case complexity and fairness justified an ends‑of‑justice continuance and the court imposed remedies | Affirmed — district court did not abuse discretion; one‑off discovery error did not automatically bar an ends‑of‑justice continuance |
| Sixth Amendment speedy‑trial / pre‑indictment delay | Pre‑indictment delay (investigation since 2011) should be weighed and prejudiced his defense | Sixth Amendment protections begin at accusation/indictment; no adequate showing of prejudice from post‑indictment delay | Affirmed — pre‑indictment delay not considered under Sixth Amendment; defendant failed to prove prejudice |
| Agency element under 18 U.S.C. § 666 and exclusion of contractual 'no‑agency' clause | Contract language disclaiming agency should preclude § 666 liability; jury instruction omission of model sentence on consultants was error | Parties cannot contractually negate a statutory definition of 'agent'; evidence showed managerial authority; instruction captured the law | Affirmed — exclusion of contract clause proper; instruction omission not plain error; Shulick was an agent under §666(d)(1) |
| Exclusion of Hamilton's testimony (expert vs. Rule 1006 summary) | Hamilton's allocations were admissible summary evidence, not undisclosed expert opinion | Hamilton would offer opinion‑based apportionments requiring Rule 16 disclosure; testimony was expert and exclusion appropriate | Affirmed — testimony was expert opinion, undisclosed, and properly excluded |
| Jury instruction on 'intentional misapplication' under § 666 after Kelly | Instruction allowing misapplication even if spending benefitted the victim (model instruction) conflicts with Kelly and requires reversal | Trial predated Kelly; model instruction was circuit law then; overwhelming evidence showed classic embezzlement for personal benefit so any error harmless | Affirmed — even assuming error under new law, plain‑error review fails because overwhelming Kelly‑compliant evidence of property theft |
| Sentencing: loss/restitution calculations and offsets | Court misapplied Guidelines notes; failed to credit value of services and other offsets | Nagle supports computing loss as contract face value minus value of services provided; defendant failed to prove extra offsets | Affirmed — loss, restitution, forfeiture, and record supplementation were proper; defendant did not meet burden for additional offsets |
Key Cases Cited
- Kelly v. United States, 140 S. Ct. 1565 (2020) (Supreme Court: §666 targets property‑type fraud, not every dishonest exercise of regulatory power)
- United States v. Baroni, 909 F.3d 550 (3d Cir. 2018) (applied model §666 instruction treating misapplication as wrongful use even if it benefited the victim)
- United States v. Vitillo, 490 F.3d 314 (3d Cir. 2007) (an independent contractor with managerial responsibility can qualify as an 'agent' under §666)
- United States v. Lupton, 620 F.3d 790 (7th Cir. 2010) (contractual language cannot define or negate statutory agency for criminal liability)
- United States v. Cianciola, 920 F.2d 1295 (6th Cir. 1990) (one‑time inadvertent government discovery failure may justify continuance under ends‑of‑justice)
- United States v. Nagle, 803 F.3d 167 (3d Cir. 2015) (loss calculation for government‑funded contracts equals contract face value minus fair market value of services provided)
- Barker v. Wingo, 407 U.S. 514 (1972) (constitutional speedy‑trial balancing test: length, reason, assertion, prejudice)
- Lockhart v. United States, 136 S. Ct. 958 (2016) (statutory construction: rule of the last antecedent)
- United States v. Andrews, 681 F.3d 509 (3d Cir. 2012) (plain‑error review where later decisions change the law applicable to jury instructions)