United States v. William Aubrey, 800 F.3d 1115

Background

William Aubrey owned and controlled Lodgebuilder, which managed construction on Navajo Nation housing projects; Lodgebuilder received NAHASDA block grant funds via Fort Defiance Housing Corporation (FDHC), a sub‑grantee of the Navajo Housing Authority (NHA).
Under NAHASDA, HUD allocates funds to NHA, which releases disbursements (draws) only after NHA verifies eligible work; sub‑grantees like FDHC must requisition funds and remit payments to subcontractors.
Lodgebuilder (through Aubrey) received roughly $9.16 million in NAHASDA draws for the Chilchinbeto project; Aubrey deposited those checks into accounts he controlled and commingled grant funds with personal funds.
Numerous subcontractors (e.g., Four States Electric) performed work and submitted invoices that NHA approved and paid to FDHC; Aubrey nevertheless failed to pay many subcontractors and spent grant proceeds on personal expenses, including large casino payments.
A grand jury indicted Aubrey under 18 U.S.C. § 1163 for conversion/misapplication of tribal funds; a jury convicted him on two counts, and the district court sentenced him to 51 months plus enhancements for loss and abuse of trust. The Ninth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether disbursed NAHASDA funds remain “property belonging to any Indian tribal organization” under 18 U.S.C. § 1163	Government: funds remain tribal property if the tribe retains supervision/control after disbursement	Aubrey: once NHA paid verified work, funds were reimbursement and no longer belonged to the tribe	Court: Funds remain tribal property where tribe retains title/possession/control; affirmed application of that standard
Sufficiency of evidence to prove conversion/misapplication	Government: Aubrey deposited approved draws and used them for personal/other impermissible purposes, leaving subcontractors unpaid	Aubrey: alternatives — reimbursed by NAHASDA, underfunding, or used his own money — undermining proof of criminal conversion	Court: Viewing evidence in the light most favorable to prosecution, jury reasonably inferred willful conversion/misapplication; convictions upheld
Admission and qualification of HUD auditor (Hoogoian) and summary exhibits under FRE 701/1006	Government: Hoogoian testified from personal investigation; summaries admissible under Rule 1006 and underlying records produced	Aubrey: Hoogoian used LIFO accounting and should have been designated/examined as an expert; summaries improperly admitted	Court: No abuse of discretion — Hoogoian gave permissible lay‑foundation testimony; summaries admissible and harmless given underlying records and limiting instruction
Jury instructions and defense theory	Aubrey: instruction should have explicitly tracked his proposed three‑element formulation (including direct language that funds belonged to Aubrey/subcontractors) and avoid enabling an agency theory	Government: statutory instruction adequate and identified NHA/FDHC as agents; instructions defined conversion/misapplication	Court: No plain error — the given instructions adequately covered Aubrey’s defense and correctly stated law; did not permit an improper agency conviction

Key Cases Cited

United States v. Kranovich, 401 F.3d 1107 (9th Cir.) (funds are government property when government has title, possession, or control)
United States v. Faust, 850 F.2d 575 (9th Cir.) (consider amount of control in determining whether funds are government funds)
United States v. Von Stephens, 774 F.2d 1411 (9th Cir.) (government retains sufficient interest where it exercises supervision and control over funds and their ultimate use)
United States v. Hicks, 217 F.3d 1038 (9th Cir.) (standard for reviewing sufficiency of the evidence — view facts in prosecution's favor)
Jackson v. Virginia, 443 U.S. 307 (Sup. Ct.) (evidentiary sufficiency standard for criminal convictions)
United States v. Anekwu, 695 F.3d 967 (9th Cir.) (admission of summary exhibits and harmless‑error analysis)