Eleventh Circuit Court of Appeals - Published Opinions

Monday, October 26, 2020

Bazantes: Affirming False Payroll Convictions But Vacating Loss Enhancement

In United States v. Bazantes, No. 17-15721 (Oct. 26, 2020) (Ed Carnes, Branch, Tjoflat),  the Court affirmed the defendants’ false statement convictions but vacated their sentences.

The defendants first argued that certified payroll forms containing false statements were not  made or used in a matter within the jurisdiction of a federal agency.  The Eleventh Circuit rejected that argument because federal law, the Copeland Act, covers statements in payroll records that government contractors and subcontractors must furnish to the agency in charge of the project.

The defendants next argued that the indictment and the evidence failed to charge or establish that the false payroll records were material.  The Court held that the indictment sufficiently alleged materiality even though the records were not submitted directly to the decision-making body they had the potential to influence.  And the Court held that the evidence was sufficient because it established that the records had the potential to influence the federal agency, even though they were not directly submitted to that agency.

The Court vacated the loss enhancement at sentencing because the government failed to prove that there was any pecuniary loss to the agency.  While the fraud compromised the integrity of the government contracting process, that did not establish a financial loss.  And the agency ultimately received the full, bargained-for benefit of the defendants’ labor.  The Court rejected the argument that the defendants’ gain could be used instead of loss where there was no actual loss; personal gain can be used only where there is a loss that cannot be reasonably determined.