708 F. App'x 590
11th Cir.2017Background
- Craig Near, sole paid employee of Genziko, Inc., obtained SBIR awards from NSF and NASA to develop piezoelectric and acoustic devices; grants/contracts incorporated the companies’ proposed budgets.
- Government alleged Near submitted false budgets and certifications while not paying listed employees/ subcontractors and using grant funds for other purposes; NSF and NASA wired grant payments to Genziko accounts.
- Indictment charged seven wire-fraud counts and three false-claims counts (one false-claim count acquitted for each defendant); jury convicted Near and Genziko on all seven wire-fraud counts and two false-claims counts.
- At trial government introduced OIG presentation slides saying “Don’t lie” and “Don’t steal”; court instructed jury (pattern instructions) that lying or using grant money for personal expenses alone were not elements of the charged crimes.
- District court found no compensable loss (credited value of work performed and subcontractor services), imposed sentence (Near: 4 months prison + 1 year supervised release; Genziko: 5 years probation + $5,000 fine) and declined restitution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence (wire fraud) | Govt: seven wire transmissions (six treasury transfers, one email) were incident to scheme to obtain money and thus satisfy §1343 | Near/Genziko: transmissions post-award couldn’t be for executing a scheme that ended when proposals were accepted | Court: Evidence sufficient; transfers were the money and email aided obtaining payment — convictions affirmed |
| Sufficiency of evidence (false claims) | Govt: final reports/certifications falsely represented compliance with award terms (budgets incorporated into terms) | Defendants: proposed budgets weren’t terms/conditions, so certifications weren’t false | Court: Evidence shows budgets were incorporated and payments touted; convictions affirmed |
| Constructive amendment of indictment | Govt: N/A (prosecution defended its approach) | Defendants: government and court dropped/failed to require willfulness/material-knowledge (wording in indictment), and government’s statements/instructions broadened bases for conviction | Court: No constructive amendment; jury had indictment, instructions referenced charged crimes, context distinguished from Cancelliere; plain-error review fails |
| Trial evidence/arguments lowering burden | Govt: OIG slides and references to lying/stealing were proper background and warning | Defendants: slides/readings/remarks equated simple lying/stealing with criminality, lowering burden of proof | Court: Even if admission erred, error was harmless — court’s explicit jury instructions remedied harm |
| Sentencing: Loss calculation under Guidelines & restitution | Govt: Special Rule for government benefits should produce larger loss and preclude offsets; restitution required | Defendants: Services performed had fair-market value offsetting any loss; no direct pecuniary victims | Court: District court’s factual findings (no net loss after valuing services) not clearly erroneous; Maxwell distinguished (intended vs. unintended recipients); restitution refusal not an abuse of discretion |
Key Cases Cited
- United States v. Perez, 443 F.3d 772 (standard for sufficiency review)
- United States v. Fries, 726 F.3d 1286 (manifest miscarriage of justice standard on unpreserved sufficiency challenge)
- United States v. Evans, 473 F.3d 1115 (wire transmission must be incident to an essential part of scheme)
- United States v. Hesser, 800 F.3d 1310 (elements of false-claims offense)
- United States v. Castro, 89 F.3d 1443 (constructive amendment doctrine; evaluate instructions/summation in context)
- United States v. Cancelliere, 69 F.3d 1116 (constructive amendment where willfulness was stricken and jury could not consider it)
- United States v. Maxwell, 579 F.3d 1282 (no offset against loss under Government Benefits Rule where funds went to unintended recipient)
- United States v. Nagle, 803 F.3d 167 (crediting value of services may offset loss under Guidelines)
- Sabri v. United States, 541 U.S. 600 (money is fungible — context for assessing benefits/use)
- United States v. Robertson, 493 F.3d 1322 (standard for restitution causation and clear-error review)