United States v. Sherrymae Morales, 664 F. App'x 228

Background

Sherrymae Morales, a former employee of the Virgin Islands National Guard (the Guard), took a contract position with Military Personnel Services Corporation while later returning to Guard employment, resulting in periods where she was paid by both employers for overlapping hours.
The government charged Morales with 21 counts of wire fraud for receiving Guard direct-deposit paychecks while simultaneously working for (and being paid by) the contractor; the jury convicted on counts covering the latter portion of the scheme.
At trial, many witnesses, including government witnesses, testified that Morales was a competent and hardworking employee; no government witness presented evidence that her Guard job performance suffered. Morales testified that she worked the contractor hours at a supervisor’s request while a replacement was found.
After conviction, the District Court calculated loss under U.S.S.G. § 2B1.1 by starting from a PSR figure of $90,852 (gross pay on the counts) and reducing it to $45,426 (a 50% credit), resulting in a six-level Guidelines enhancement, a 12-month-and-one-day sentence, and restitution set equal to the loss amount.
On appeal Morales argued: (1) the trial presentation and instructions constructively amended the indictment or impermissibly varied the charged scheme (material omission theory) and the court should have given an augmented unanimity instruction; and (2) the District Court erred in its loss calculation and restitution because the government failed to prove actual or intended loss by a preponderance.
The Third Circuit affirmed the conviction but vacated the sentence and restitution, finding the loss estimation unsupported by sufficient factual findings and remanding for further proceedings on loss and restitution.

Issues

Issue	Plaintiff's Argument (Morales)	Defendant's Argument (Government)	Held
Whether trial presentation/instructions constructively amended the indictment or impermissibly varied the charged scheme by allowing a material-omission theory	Trial: conviction rested on an omission theory and facts not charged, amounting to constructive amendment/variance	Indictment tracks statute; a "scheme to defraud" embraces misrepresentations and omissions, and trial evidence fell within charged scheme	Rejected — no constructive amendment or impermissible variance; conviction affirmed
Whether an augmented unanimity instruction was required for the jury to agree on the form of the scheme	Jury needed an augmented unanimity instruction because multiple distinct theories were presented	Augmented instruction unnecessary; factual variations as to scheme details do not require unanimity on specific acts	Rejected — no augmented unanimity instruction required
Whether the District Court correctly calculated loss under U.S.S.G. § 2B1.1 and imposed restitution based on that amount	Loss and restitution unsupported: gov't failed to show Morales caused actual or intended loss or that Guard received only half the services paid for	District Court permissibly estimated loss; started from PSR figure and applied a 50% credit to reflect services rendered	Reversed as to sentencing/restitution — remanded because the record lacked findings to support the 50% loss estimate and the government must meet its burden by preponderance
Standard of review for Guidelines interpretation and factual findings supporting loss	N/A	N/A	Plenary review of Guidelines questions; clear-error review of factual findings — District Court must make specific factual findings on remand and confirm origin of PSR figures

Key Cases Cited

Lum v. Bank of Am., 361 F.3d 217 (3d Cir. 2004) (scheme-to-defraud includes omissions)
United States v. Morris, 80 F.3d 1151 (7th Cir. 1996) (mail/wire fraud covers omissions as well as false representations)
Stirone v. United States, 361 U.S. 212 (1960) (indictment specificity and constructive amendment principles)
United States v. Wozniak, 126 F.3d 105 (2d Cir. 1997) (limitations of indictments tied to charged conduct)
United States v. Ryan, 828 F.2d 1010 (3d Cir. 1987) (limited circumstances requiring augmented unanimity instruction)
United States v. Daniel, 749 F.3d 608 (7th Cir. 2014) (facts of a scheme are not elements requiring jury unanimity)
United States v. Nagle, 803 F.3d 167 (3d Cir. 2015) (approach to loss calculation in fraud cases)
United States v. Evans, 155 F.3d 245 (3d Cir. 1998) (government bears burden to prove facts supporting sentence enhancement)
United States v. Burns, 104 F.3d 529 (2d Cir. 1997) (permitting salary-based loss where record showed hours devoted to another job)
United States v. Napier, 273 F.3d 276 (3d Cir. 2001) (standards of review for Guidelines interpretation and factual findings)