United States of America v. Bradley R. Cornelsen
No. 17-1829
United States Court of Appeals For the Eighth Circuit
Filed: June 28, 2018
Submitted: January 12, 2018
Before SMITH, Chief Judge, MELLOY and SHEPHERD, Circuit Judges.
A jury convicted Bradley Cornelsen of five counts of wire fraud, in violation of
From 2007 until 2014, Cornelsen was employed by MV Transportation (MVT), a passenger transport company based in Dallas, Texas. He worked in the company’s office in Elk Horn, Iowa. In 2010, Cornelsen was named the company’s Chief Financial Officer. In April 2014, Cornelsen was terminated and MVT launched an internal review into his corporate activities. After several months of private investigation, which cost the company $763,746.74, MVT referred the matter to the U.S. Attorney.
In January 2016, a grand jury indicted Cornelsen on five counts of wire fraud. The indictment charged Cornelsen with defrauding MVT of $297,985.13 through unauthorized wire transfers made between January 2013 and February 2015.
At trial, David Oswald, a forensic accounting expert, testified regarding an Ernst & Young (E&Y) audit of Cornelsen’s corporate activities. The E&Y audit estimated Cornelsen defrauded MVT of a total of $1,453,025.42. Accordingly, the government presented evidence of uncharged, yet related conduct, including unauthorized, non-business expenditures made using manual checks and a company credit card. In November 2016, a jury found Cornelsen guilty on all five counts of wire fraud.
The Presentence Investigative Report recommended the court find an actual loss amount of $1,150,320.09 for purposes of determining the base offense level under
Cornelsen appeals the district court’s calculation of the loss amount and restitution award, arguing any amount over the $297,985.13 stated in the indictment, and any conduct outside of the time period stated in the indictment, cannot be included in either calculation. Cornelsen also argues MVT is not a “victim” under the Guidelines or the Mandatory Victims Restitution Act (MVRA),
Turning first to the calculation of the loss amount, we review the district court’s interpretation of the term “loss” under the Guidelines de novo, United States v. Fazio, 487 F.3d 646, 657 (8th Cir. 2007), and its factual findings for clear error, United States v. Bolt, 782 F.3d 388, 390 (8th Cir. 2015). We grant “deference to the district court’s loss calculations because of its unique ability to assess the evidence and estimate the loss,” Fazio, 487 F.3d at 659 (citations omitted), and require a “reasonable estimate of loss rather than a precise determination,” United States v. Farrington, 499 F.3d 854, 860 (8th Cir. 2007). The government must establish the loss amount by a preponderance of the evidence. Id. at 859.
The Guidelines’ commentary defines “loss” as “the greater of actual loss or intended loss.”
Furthermore, “we take a broad view of what conduct and related loss amounts can be included in calculating loss.” United States v. DeRosier, 501 F.3d 888, 896 (8th Cir. 2007). “Relevant conduct under the guidelines need not be charged to be considered in sentencing, and it includes all acts and omissions ‘that were part of the same course of conduct or common scheme or plan as the offense of conviction.’” United States v. Radtke, 415 F.3d 826, 841 (8th Cir. 2005) (quoting
We conclude the district court did not commit clear error in finding that the uncharged conduct, including the unauthorized use of manual checks and credit card charges, was a part of Cornelsen’s common scheme or plan or the same course of conduct. As the court reasonably relied on the E&Y audit and related expert testimony, the evidence related to the charged and uncharged conduct, and Agent Kohler’s testimony as to the suggested modifications, we conclude the loss calculation is supported by a preponderance of evidence. Because we give deference to the district court’s assessment of this evidence, we find no clear error in the court’s loss calculation. See Fazio, 487 F.3d at 659; see also United States v. Kelley, 861 F.3d 790, 802 (8th Cir. 2017) (“It is well established that in sentencing matters a district court’s assessment of witness credibility is quintessentially a judgment call and virtually unassailable on appeal.” (citation omitted)).
Second, district courts must apply the MVRA when applicable. See
Based on Cornelsen’s wire fraud convictions, the MVRA applies. See United States v. Louper-Morris, 672 F.3d 539, 566 (8th Cir. 2012) (holding the MVRA “requires individuals who are convicted of wire fraud to pay restitution to their victims” (citations omitted)); see also
Cornelsen argues the restitution award cannot include conduct not explicitly charged in the indictment. However, in determining the amount of restitution, “the court shall award as restitution ‘the full amount’ of a victim’s losses.” United States v. Lange, 592 F.3d 902, 907 (8th Cir. 2010) (quoting
Finally, we note the Supreme Court’s recent decision in Lagos v. United States, 138 S. Ct. 1684. In Lagos, the Petitioner-Defendant challenged the district court’s inclusion of “professional fees for attorneys, accountants, and consultants” incurred by the victims in a restitution award under
the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.
Id. at 1688 (quoting
Lagos appears to run contrary to our precedent. See United States v. Stennis-Williams, 557 F.3d 927, 930 (8th Cir. 2009) (“This court has held that privately incurred investigative costs constitute foreseeable losses that are directly caused by a defendant’s fraudulent conduct. Therefore, the district court did not clearly err by including the estate’s investigative costs in its restitution calculation.” (citations omitted)); DeRosier, 501 F.3d at 897 (“Our case law has specifically approved the inclusion of attorney’s fees and investigative costs in a restitution award when these losses were caused by fraudulent conduct.”). In light of Lagos, therefore, we vacate the portion of the restitution order awarding $250,000.00 for the company’s accounting and attorney’s fees and remand to the district court for further consideration.
For these reasons, we affirm the judgment of the district court except with respect to the investigative costs included in the restitution award, which we reverse and remand for further consideration.