United States v. William P. Clark
787 F.3d 451
7th Cir.2015Background
- William Patrick Clark, owner of Clark Trucking, subcontracted to provide hauling on a federally and state-funded I-64 highway project in Missouri; his subcontract incorporated FHWA-1273 and required compliance with prevailing-wage obligations.
- Clark submitted weekly certified payrolls (DOL forms) from June 2007 through project completion, each falsely attesting he paid drivers $35.45/hr (the prevailing wage), while actually paying them ~ $15/hr under separate agreements.
- After the project ended, Clark signed a Final Release and later (Sept. 27, 2011) submitted an affidavit to MODOT certifying compliance with Missouri wage law and Annual Wage Order No. 50.
- A grand jury indicted Clark on ten counts under 18 U.S.C. § 1001 for making materially false statements: Counts 1–9 (nine payroll certifications) and Count 10 (the MODOT affidavit). A jury convicted on all counts.
- At sentencing the court ordered $273,118.43 restitution to 22 drivers and applied a 12-level loss enhancement under U.S.S.G. § 2B1.1 based on the wage differential; Clark appealed convictions (materiality) and the restitution/ loss rulings.
Issues
| Issue | Clark's Argument | Government's Argument | Held |
|---|---|---|---|
| Materiality of MODOT affidavit (Count 10) | Affidavit to state agency could not plausibly influence federal government; government presented no evidence the affidavit ever reached or could affect DOL/federal funds. | False statements about wages on a federally-funded project are capable of influencing federal interests; FHWA-1273 authorizes DOL to request withholding of payments. | Reversed Count 10: government failed to prove the affidavit was capable of influencing the federal government. |
| Materiality of payroll certifications (Counts 1–9) | Davis-Bacon numeric wage wasn’t printed in subcontract; thus Davis-Bacon didn’t apply and the payroll lies were not material to federal government. | Payroll certifications expressly attested to $35.45/hr on DOL forms and contract incorporated FHWA-1273; false payrolls had natural tendency to affect federal enforcement and payments. | Affirmed Counts 1–9: false payroll certifications were materially capable of influencing federal interests. |
| Restitution to employees under 18 U.S.C. § 3663 | Employees suffered no direct/proximate loss from later false statements—pay was what it was; restitution improper. | Clark’s lies deprived government of the opportunity to withhold/divert contract payments to make employees whole, so employees were directly harmed. | Affirmed restitution: false payroll certifications proximately caused pecuniary harm because they prevented diversion of funds to underpaid employees. |
| Sentencing loss enhancement (U.S.S.G. § 2B1.1) | Loss enhancement improperly applied because false statements did not cause actual loss to employees; Application Note 3(F) not a freestanding causation rule. | Application Note 3(F)(iii) supports calculating loss as the wage-difference in Davis-Bacon cases; Clarke’s lies produced actual loss by concealing underpayments. | Affirmed 12-level enhancement: court properly found actual, foreseeable pecuniary loss equal to the wage differential and applied the Note in computing loss. |
Key Cases Cited
- United States v. Turner, 551 F.3d 657 (7th Cir.) (materiality inquiry: natural tendency to influence federal decisionmaking)
- United States v. Lupton, 620 F.3d 790 (7th Cir.) (no requirement that agency actually relied on statement for materiality)
- United States v. Petullo, 709 F.2d 1178 (7th Cir.) (false statements to nonfederal entities can satisfy § 1001 when federal funds/authority link confers jurisdiction)
- United States v. White, 270 F.3d 356 (6th Cir.) (affirming § 1001 conviction for false statements to state agency where federal interests implicated)
- Kungys v. United States, 485 U.S. 759 (U.S. 1988) (materiality defined as natural tendency to influence)
- Gaudin, 515 U.S. 506 (U.S. 1995) (materiality standard applied to false statements)
- Frank Bros. Inc. v. Wisconsin Dept. of Transp., 409 F.3d 880 (7th Cir.) (Davis-Bacon imposes a wage floor; states may have different prevailing-wage rules)
- United States v. Donaby, 349 F.3d 1046 (7th Cir.) (proximate cause and foreseeability in restitution analysis)