United States v. Kenneth Brown
2013 U.S. App. LEXIS 14391
| 5th Cir. | 2013Background
- Kenneth and Leah Brown were charged with conspiracy to commit theft from a program receiving federal funds (18 U.S.C. §§ 371, 666(a)(1)(A)).
- The indictment alleged the Browns conspired with Patricia Leathers to defraud the City of Garland, Texas, via a check-cashing scheme facilitated by Leathers as an in-house claims adjuster.
- Leathers approved settlements and directed disbursements, issuing checks up to $10,000, leading to approximately $1.9 million in losses to the City.
- The Browns allegedly submitted false insurance claims, endorsed checks, cashed or deposited them, and shared the proceeds; Leah endorsed two checks and Kenneth endorsed many more.
- A four-day jury trial resulted in guilty verdicts for both defendants on the sole conspiracy count; the district court imposed joint sentences with restitution to Garland.
- On appeal, the Browns challenge sufficiency of the evidence and the procedural/substantive reasonableness of their within-Guidelines sentences.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal funds element sufficiency | Brown argues no proof of $10,000 in federal funds. | Brown contends funds element insufficiently proven without documentary corroboration. | Evidence sufficient; uncorroborated testimony adequate to prove federal funds element. |
| Nexus between conduct and federal funds | Brown argues no nexus between conduct and agency receiving funds. | Brown argues no direct link to funds controlled by Leathers. | Sufficient nexus shown; conduct tied to agency receiving federal funds, not require direct effect on funds. |
| Knowledge element of conspiracy | Leads to inference that defendants knew unlawful purpose and joined the conspiracy. | Brown argues lack of knowledge or participation; limited involvement. | Evidence supports knowledge and voluntary participation for both Browns. |
| Managerial role enhancement | District court properly found Browns recruited others and supervised aspects of scheme. | Browns were not managers or supervisors; role is merely cashing checks. | Three-level managerial enhancement affirmed as plausible based on recruitment and coordination evidence. |
| Loss calculation and foreseeability | Loss amounts reasonably foreseeable to each defendant given involvement. | Challenge that loss should be limited to checks actually endorsed by each defendant. | District court’s loss determinations upheld; foreseeability supports attributed losses. |
Key Cases Cited
- United States v. Jackson, 313 F.3d 231 (5th Cir. 2002) (sufficiency for federal funds element can be proven by testimonial evidence)
- United States v. Read, 710 F.3d 219 (5th Cir. 2013) (per curiam evidentiary sufficiency on conspiracy)
- Salinas v. United States, 522 U.S. 52 (U.S. 1997) (focuses on nexus between conduct and agency receiving federal assistance)
- Whitfield, 590 F.3d 325 (5th Cir. 2009) (nexus between criminal conduct and receiving agency required)
- Moeller, 987 F.2d 1134 (5th Cir. 1993) (illustrates nexus principles under § 666)