U.S. v. Shaw, (10th Cir. 2005)
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UNITED
STATES COURT OF APPEALS
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellant,
v.
EDWARD A. SHAW,
Defendant - Appellee.
Nos. 01-3344 & 01-3310
(D. Kansas)
(D.Ct. No. 99-CR-10081-01-JMT)
ORDER AND JUDGMENT(*)
Before TACHA, ANDERSON, and O'BRIEN,
Circuit Judges.
Edward Shaw was convicted by a jury of knowingly engaging in a scheme
to falsify, conceal or cover up the presence of asbestos at the Shallow Water
Refinery, in violation of 18 U.S.C. 1001(a)(1).(1) He was sentenced to four
months imprisonment, which was stayed pending this appeal. On appeal, Shaw
challenges his conviction and sentence on the following grounds: (1) the district
court lacked subject matter jurisdiction over his prosecution under 18 U.S.C. §
1001 because 42 U.S.C. 7413(c) is the exclusive means by which the
Government may prosecute the making of a false statement on a form required by
the Clean Air Act (CAA), (2) his prosecution under 18 U.S.C. 1001 was barred
by the five year statute of limitations, (3) the Government failed to show he had a
legal duty to disclose the presence of asbestos at the refinery, and (4) the district
court erred in holding Shaw accountable under USSG §2F1.1 for the cost of the
clean up of the buried asbestos at the refinery. The Government cross-appeals,
arguing the district court erred in denying a two level enhancement to Shaw's
sentence for more than minimal planning under USSG §2F1.1(b)(2). After
briefing was completed in this matter, the United States Supreme Court decided
Blakely v. Washington, 542 U.S. 296 (2004). Shaw requested permission to file
supplemental briefing addressing Blakely, which was granted. In his
supplemental brief, Shaw argues Blakely applies to the federal sentencing
guidelines and he was sentenced in violation of the Sixth Amendment.
Exercising jurisdiction under 28 U.S.C. 1291 and 18 U.S.C. 3742(a), we
affirm Shaw's conviction but remand for resentencing.
Because of the complexity of this appeal, we divide our discussion in two--first
addressing Shaw's appeal of his conviction and then addressing all
sentencing issues.
I. Conviction
A. Factual Background
Shaw, a professional engineer, owns and operates ESCM & Associates Inc.
(ESCM), an engineering and environmental consulting firm. In 1993, EZ Serve,
one of ESCM's clients, contacted Shaw concerning the Shallow Water Refinery,
an abandoned oil refinery located near Scott City, Kansas, which EZ Serve
owned.(2) EZ Serve wished to demolish the
refinery and requested Shaw's
assistance. Shaw decided to obtain bids for the demolition. On July 15, 1993, as
part of the bidding process, Shaw escorted several metal salvage companies
through the refinery. One of those companies was Southwest Wrecking, a small
company owned by Jean Stiffler and operated by Carl and Jean Stiffler and three
of their children, Lee, Scott and Carla (the Stifflers). Also present at the walk-through were
Steve Allred and Barry Yaffe, representatives of the Yaffe
Companies, another potential bidder.
At trial, Allred and Yaffe testified that during the walk-through, they
observed materials throughout the refinery which they believed contained
asbestos. They raised these observations with Shaw. According to Yaffe and
Allred, Shaw informed them the property was clean and the materials they
observed contained calcium silicate (cellulose) not asbestos.(3) Lee Stiffler
testified Shaw informed his family at the walk-through that the property did not
contain asbestos, that the insulation throughout the refinery contained cellulose
and that the only concern was the presence of hydrocarbons, which Shaw
indicated he would help abate. Carl Stiffler testified he did not recall Shaw
making any representations concerning asbestos during the walk-through; he
stated Shaw informed the Stifflers the insulation material was cellulose.
A week after the walk-through, EZ Serve requested that ESCM purchase
the Shallow Water Refinery. Immediately thereafter, the Stifflers contacted
Shaw, informing him they wished to purchase the refinery for $50,000.
Therefore, Shaw/ESCM decided to purchase the property from EZ Serve and
immediately reconvey it to the Stifflers. ESCM purchased the property from EZ
Serve for $5,000. On August 23, 1993, ESCM sold it to the Stifflers for
$50,000. Pursuant to the terms of the sales agreement, the Stifflers agreed to pay
$20,000 at closing(4) and remit the balance
(without interest) on or before August
31, 1994.(5) The agreement also informed
the Stifflers that (1) the property may
contain asbestos, gasoline hydrocarbons, and other contaminants, (2) the property
was being sold "'AS IS,'" and (3) the Stifflers assumed "all responsibility for
complying with and/or bringing the [property] into compliance with any
environmental law or regulation." (R. Supp. Vol. I at 36.) Jean Stiffler testified
she had "complete[] trust" in Shaw and that neither she nor any of her family
members read the sales agreement before signing it.(6) (R. Vol. IV at 410.)
Therefore, she stated she never knew the agreement indicated asbestos may be on
the property and Shaw never told her or her family that asbestos may be present.
In addition to the sales agreement, Shaw wrote a letter addressed to Carla
Stiffler outlining the terms of a separate agreement between ESCM and the
Stifflers. This letter, dated August 23, 1993, stated in relevant part:
This letter also serves as an agreement by ESCM to conduct up to six site
visits to the property during the next 24 months, as deemed necessary by
[the Stifflers], to provide engineering consulting. These site visits will be
for a maximum eight hour duration each and all travel will be paid for by
ESCM. Phone consultation for engineering matters will be provided
during the 24 months following closing in regards to engineering concerns
with the demolition of the refinery; these consultations will be at no cost to
[the Stifflers].
(R. Supp. Vol. I at 38.) In conclusion, the letter stated, "We look forward to
working with you on this project." (Id.) Jean Stiffler testified she never saw this
letter. She believed, based on conversations with Shaw, that he would be the
Stifflers' consultant regarding the removal of insulation (which she believed,
based on Shaw's representations, contained cellulose) and he would complete all
necessary paperwork for them. Carl Stiffler testified Shaw told his family he
would be their "environmental consultant." (R. Vol. IV at 562.)
After closing, the Stifflers began demolishing the refinery and salvaging
the scrap metal for sale. On November 3, 1993, David Branscum from the
Kansas Department of Health and Environment (KDHE) arrived at the refinery to
inspect it. He was approached by Jean Stiffler who refused to allow him on the
property, stating she would have to contact Shaw, "their environmental guy," to
see if she could let him on the property. (Id. at 585.) Branscum left the refinery
and returned to Scott City, where he learned no Notification of Demolition and
Renovation had been filed for the refinery.(7)
Branscum returned to the refinery the next day. This time, Branscum was
met by Lee Stiffler. Branscum requested access to the refinery to photograph and
take samples of suspected asbestos materials.(8) Lee informed Branscum they
needed to contact Shaw before permitting him on the property.(9) Eventually,
Shaw was contacted by telephone; Shaw informed Branscum he could enter the
property escorted by Lee Stiffler. Accompanied by Lee, Branscum inspected the
property and took pictures. After his inspection, Branscum informed Lee there
were some compliance issues, including licensing requirements, which needed to
be addressed, and it would be in the Stifflers' best interests to cease their
demolition activities.
The next day (November 5), pursuant to the Stifflers' request, Shaw
arrived at the refinery. The Stifflers informed Shaw they needed an asbestos
inspection performed and a Notification of Demolition and Renovation submitted
to the Government. They further informed him they could not continue their
demolition of the refinery until the notification was submitted. They asked Shaw
to fill out and submit the notification for them. Based on recent training he had
received in the supervision of asbestos abatement,(10) Shaw agreed to inspect the
property and complete and submit the notification. He did not require the
Stifflers to pay him for these services. While Shaw completed the necessary
paperwork, Shaw arranged for the Stifflers to work on a demolition project in
Texas.(11)
On November 8, 1993, Shaw telephoned Alice Law, NESHAP(12) asbestos
coordinator at the Environmental Protection Agency (EPA), seeking general
information concerning the EPA's regulations. He informed her of his
qualifications and told her there was no asbestos in Area A of the Shallow Water
Refinery, only bear metal tanks and piping.(13) The next day, Law received a
Notification of Demolition and Renovation concerning the Shallow Water
Refinery. The notification, dated November 8, 1993, indicated there was no
asbestos in Area A of the refinery. Specifically, it stated: "Area 'A' consist[s]
of
bare metal carbon steel tanks. No insulation or other material to test. Cut only
bare metal carbon steel piping." (R. Vol. I at 106.) It also stated: "If unexpected
asbestos or suspected asbestos material is encountered, all work will stop and
area secured until properly abated." (Id. at 107.) The notification also indicated
demolition of Area A would begin on November 18, 1993, and end on December
31, 1994. The space designated "Signature of Owner/Operator" was signed by
"Edward A. Shaw, Agent for S.W. Wrecking." (Id.)
Accompanying the notification was a certificate of Shaw's accreditation as
a supervisor of asbestos abatement projects, a map of the refinery and a cover
letter. The cover letter, written by Shaw and dated November 8, 1993, stated in
relevant part:
On November 3, 1993, [the Stifflers] were advised by . . . David
Branscum[] that they had not filed the proper notification with your office
in regards to the demolition. They immediately halted the demolition
effort and commissioned me to conduct the proper inspection and file the
proper notifications.
As we discussed, I have inspected the facility. . . . Area A consist[s] of
only bare steel tanks and bare steel piping. There is no asbestos material in
the area to be removed. There may be asbestos containing materials in
areas B and C.
The attached notice is for demolition of Area A only. No work will be
conducted in Areas B or C at this time. I will be conducting an extensive
survey in Areas B and C, collecting samples of materials that may contain
asbestos, and forwarding them to a laboratory for analysis. After receipt of
the laboratory report, I will provide a completed asbestos survey report and
will submit notification of demolition activities and asbestos removal
abatement activities for Areas B and C.
As we discussed on the telephone, [Southwest] Wrecking is a small family
owned business and [it has] a strong desire to comply with all applicable
regulations. Our company will be working with [the Stifflers] very closely
on the remainder of this project to assist them in their compliance efforts.
(R. Supp. Vol. I at 39.)
Thereafter, Shaw informed the Stifflers they could return to work at the
Shallow Water Refinery. The Stifflers returned to the refinery based solely on
Shaw's representation that they could do so as they never received written
notification from the KDHE that they could resume their work at the refinery.
Before their return to the refinery, Shaw never informed the Stifflers there was
asbestos on the property or that they should only cut bare steel tanks and piping.
He did, however, provide them with a map delineating Areas A, B and C. He
also told them to contact him before moving from Area A to another area.
On December 9, 1993, Branscum returned to the refinery to verify the
information in the November 8, 1993 "Notification of Demolition and
Renovation." He was allowed to enter the refinery, again escorted by Lee
Stiffler. Branscum took several photographs and samples from Area A of the
refinery. Later, he submitted these samples for testing. Test results revealed the
presence of asbestos in Area A.(14)
During this December 9, 1993 visit, Branscum
did not see any evidence that the asbestos was being wetted prior to its removal.(15)
On March 3, 1994, Shaw visited the Shallow Water Refinery to take
samples. At that time, the Stifflers were beginning to move their demolition
activities from Area A to Area B. At Shaw's direction, Lee and Scott Stiffler
obtained forty-eight samples from all three areas of the refinery. Lee testified
that while he and Scott were assisting Shaw, they came across a hole they had
dug to bury insulation.(16) According to
Lee, Shaw told them they could continue
to bury the insulation because it was not asbestos.(17) Carl Stiffler testified Shaw
saw the holes filled with insulation and Jean Stiffler testified Shaw told them
they could bury the insulation. Later, Shaw submitted the samples he had
collected to a laboratory in Gainesville, Florida, for testing. Samples from Areas
B and C showed the presence of asbestos; none of the samples from Area A
tested positive for asbestos.
Based on these results, Shaw completed and filed a revised Notification of
Demolition and Renovation with the EPA. This notification, which was mailed
on June 20, 1994, and received by the EPA on June 23, 1994, indicated there was
asbestos on the property and that it would be removed using the "wet method."
(R. Vol. I at 110); see n.15, supra. This notification contained the
signature of
"C.L. Stiffler"(18) and was dated April 22,
1994. (Id.)
Accompanying the revised notification was a letter from Shaw dated June
17, 1994, stating asbestos was discovered on the property. It further stated:
We have arranged, [on] behalf of [the Stifflers], to have BFI Waste
Management haul the removed [asbestos] and place [it] in [its] landfill in
Fountain, Colorado. [The Stifflers have] indicated that they are receiving
the necessary training from Kansas for Asbestos Removal Operations and
that they will have our personnel on site as Supervisors.
We will be collecting air samples on a regular basis and submitting them
for laboratory analysis. We will also conduct field fiber screening while
the asbestos removal project is in progress.
(Id. at 108.) At trial, the parties stipulated that Shaw "never requested a contract
with BFI pertaining to the disposal of asbestos from the Shallow Water Refinery
on behalf of himself or as an agent of Carl and Jean Stiffler, doing business as
[Southwest] Wrecking, nor did he ever receive or view such a contract." (R. Vol.
III at 257.) However, Shaw did contact BFI inquiring of the cost of removing the
asbestos from the refinery and disposing of it at BFI's landfill. On May 20,
1994, BFI responded by letter to Shaw's inquiry, discussing the cost of its
services.
On September 15, 1994, Russell Brichacek, Branscum's supervisor at the
KDHE, visited the refinery. He met with Lee and Carla Stiffler and informed
them that state law required them to have an asbestos contractor's license to
perform demolition activities at a site involving asbestos. He then toured the
facility with Lee. He observed several violations of the work practice standards
for the removal of asbestos. In particular, he noticed insulation had been bagged
and stored in the bath house without having been properly wetted prior to its
removal. He was informed by Lee Stiffler that this insulation material came from
Area A. He also observed insulation debris on the ground throughout the
refinery. Brichacek took two samples from the bath house; later testing revealed
the presence of asbestos.
On March 6, 1996, Kathryn Wright, a special agent in the Criminal
Investigation Division of the EPA, was asked to investigate the violations taking
place at the Shallow Water Refinery. Shaw was initially the target of her
criminal investigation.(19) In June 1996,
Wright went to the refinery but the gate
was locked and she was unable to locate anyone on the property. Wright returned
to the property in August. Again, the gate was locked and she was unable to
locate anyone to allow her access to the property. Therefore, Wright conducted a
fly-over of the property, observing that demolition activity was being performed
at the refinery. Meanwhile, Wright attempted to contact Shaw. In October 1996,
Shaw telephoned Wright and agreed to be interviewed. Wright testified that
during their conversation, Shaw told her he had instructed the Stifflers not to
allow inspectors on the facility because it "was a refinery and anybody looking
for any violation could find it." (R. Vol. V at 701.)
On November 14, 1996, Wright and her colleague William Absher
interviewed Shaw. During the interview, Wright and Absher informed Shaw they
wished to inspect the refinery. Shaw told them he would make arrangements for
the inspection. Shaw eventually informed Wright that the EPA could inspect the
refinery on December 16, 1996.
On that day, Wright and several other individuals from the EPA arrived at
the refinery with a consent to search form.(20) Wright initially attempted to hand it
to Shaw but Shaw told her she must give it to Carl Stiffler because he owned the
property. Carl Stiffler signed the form and Wright and the other individuals were
allowed to enter and inspect the property. As a result of this inspection, the EPA
issued an emergency cease and desist order to the Stifflers, requiring them to
cease all demolition activity at the refinery.(21)
In May 1997, Brichacek returned to the property. He was met by Carl and
Jean Stiffler who accompanied him as he inspected the property. He observed
demolition activity had occurred since his last visit in September 1994; in
particular, he noticed the catalytic cracker unit (cat cracker),(22) which had been
standing during his last visit, was now laying on its side. He also noticed that
much of the insulation from the cat cracker had been knocked loose and was
scattered on the ground around it. According to Branscum, Carl Stiffler informed
him that the cat cracker had been dropped(23) a week earlier and that Shaw had told
Carl there was no asbestos on the cat cracker.(24) Brichacek took samples from the
insulation material on the cat cracker; later testing revealed the presence of
asbestos. Shortly after his visit, the KDHE issued an order citing the Stifflers
with various state law violations.
On July 9, 1997, in response to the KDHE order, Jean Stiffler wrote the
KDHE a letter requesting a hearing. In this letter, she stated, "[t]he samples we
had from the catcracker were negative." (R. Vol. IV at 427 (quotations omitted).)
Jean testified she made this statement based on a package she received from
Washington, D.C., which stated the samples from the cat cracker were negative.
She testified Shaw took those samples.
After the EPA issued the cease and desist order in December 1996, Wright
visited the refinery in June 1997 to verify whether the order was being complied
with by the Stifflers. Because no one was there to allow her access, Wright again
conducted a fly-over. She observed that the Stifflers' heavy equipment was gone.
Wright also visited the refinery in July, August and October 1997. Again, no
activity was occurring.
On August 1, 1997, an informal meeting was held between several KDHE
representatives and Carl and Jean Stiffler concerning the violations occurring at
the refinery and what the Stifflers could do to come into compliance with state
law. Shaw was present and did most of the talking on behalf of the Stifflers. On
October 31, 1997, the Stifflers received their asbestos control license. In 1998,
the Stifflers hired Dennis Shelton, an accredited asbestos project designer, to
prepare an asbestos abatement plan for the refinery, which was filed with the
KDHE. In June 1998, Brichacek visited the property for the third time.
Although abatement activities had occurred, Brichacek observed that many of the
same illegal conditions were still present.
B. Procedural Background
On June 15, 1999, Shaw and Carl and Jean Stiffler were charged by
indictment with (1) conspiracy to violate the NESHAP pertaining to asbestos in
violation of 18 U.S.C. 371 (Count I) and (2) violation of the NESHAP
pertaining to asbestos in violation of 42 U.S.C. 7413 and 18 U.S.C. 2 (Count
II). Shaw was additionally charged with engaging in a scheme to falsify, conceal
or cover up the presence of asbestos in violation of 18 U.S.C. 1001(a)(1)
(Count III) and making a false statement in violation of 18 U.S.C. 1001(a)(2)
(Count IV). On November 17, 1999, a superseding indictment was issued against
Shaw and Carl and Jean Stiffler. The superseding indictment charged Shaw with
(1) violating the NESHAP pertaining to asbestos in violation of 42 U.S.C. §
7413(c)(1) and 18 U.S.C. 2 (Count I); (2) engaging in a scheme to falsify,
conceal, or cover up the presence of asbestos in violation of 18 U.S.C. §
1001(a)(1) (Count II); (3) making a false statement in violation of 18 U.S.C. §
1001(a)(2) (Count III); and (4) illegally disposing of asbestos in violation of the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA), 42 U.S.C. 9603, and 18 U.S.C. 2 (Count IV). The superseding
indictment charged Carl and Jean Stiffler with removing asbestos without
accreditation in violation of 15 U.S.C. 2646(a)(3) (Count V).
On March 24, 2000, the Government filed a superseding information
against Carl and Jean Stiffler, charging them with failure to notify the EPA about
the storage and disposal of asbestos at the Shallow Water Refinery, a
misdemeanor. The Stifflers entered into a plea agreement with the
Government
whereby they agreed to plead guilty to the superseding information. In exchange
for their guilty pleas and their cooperation in the Government's prosecution of
Shaw, including providing truthful testimony at his trial, the Government agreed
to recommend a two point downward adjustment to their sentences for acceptance
of responsibility and to file a motion for downward departure. It was not until
they received this bargain that the Stifflers admitted they had buried asbestos on
the property. On March 27, 2000, Carl and Jean Stiffler pled guilty; they were
eventually sentenced to one year unsupervised probation.
On March 28, 2000, Shaw proceeded to trial. At trail, he testified that
during the walk-through on July 15, 1993, he informed the Stifflers there was a
possibility the property contained asbestos. He denied ever representing that the
refinery was a clean plant. With regards to the separate agreement between
ESCM and the Stifflers (outlined in Shaw's August 23, 1993 letter to Carla
Stiffler), Shaw testified the agreement pertained to ESCM assisting the Stifflers
in the designing of riggings and the testing of any liquids discovered in the tanks
on the refinery. He stated he never agreed to be their environmental consultant
and indeed, at the time of the August 1993 agreement, he did not have any
training in asbestos abatement. He further testified he told Lee Stiffler to escort
Branscum through the refinery to allow Branscum to relate any concerns directly
to Lee and for Branscum's safety. Shaw also testified that on March 3, 1994, he
did not attempt to collect clean samples from Area A and took samples from
materials containing insulation. Shaw conceded he could have made mistakes in
sampling Area A but stated he never deliberately misled anyone concerning what
he believed was on the property. Lastly, Shaw testified he never instructed any
of the Stifflers to bury insulation.
On April 12, 2000, the jury returned its verdict, finding Shaw guilty on
Count II but not guilty on Counts I and IV. No verdict was returned on Count III
because it was charged and presented to the jury in the alternative to Count II.
During trial and after the jury's verdict, Shaw moved for a judgment of acquittal,
arguing (1) insufficient evidence demonstrating a scheme to conceal, (2) the
statute of limitations barred the prosecution of Count II, and (3) he had no duty
to report the presence of asbestos. The court rejected these arguments and denied
his motion. Shaw also filed a motion to set aside the verdict, arguing the district
court lacked subject matter jurisdiction over his prosecution under 18 U.S.C. §
1001. The court also denied this motion.
C. Discussion
Shaw attacks his conviction on three grounds: (1) the district court lacked
subject matter jurisdiction over his prosecution under 18 U.S.C. 1001 because
42 U.S.C. 7413(c) is the exclusive means by which the Government may
prosecute the making of a false statement on a form required to be filed under the
CAA, (2) his prosecution under 18 U.S.C. 1001 was barred by the five year
statute of limitations, and (3) the Government failed to present sufficient
evidence demonstrating he had a legal duty to disclose the presence of asbestos at
the refinery.
Shaw raised the latter two arguments to the district court in a motion for
judgment of acquittal. "[We] review[] a denial of a motion for judgment of
acquittal de novo, viewing the evidence in the light most favorable to the
government in determining if there is substantial evidence from which a jury
could find the defendant guilty beyond a reasonable doubt." United States v.
Austin, 231 F.3d 1278, 1283 (10th Cir. 2000). We review jurisdictional issues
and a district court's interpretation of the statute of limitations de novo. United
States v. Anderson, 319 F.3d 1218, 1219 (10th Cir. 2003) (statute of limitations);
United States v. Cuch, 79 F.3d 987, 990 (10th Cir. 1996) (jurisdiction).
1. Subject Matter Jurisdiction
The CAA, 42 U.S.C. 7401 et seq., contains a provision entitled
"Federal
Enforcement." See 42 U.S.C. 7413. Within that provision is a subsection
entitled "Criminal penalties" which states in relevant part:
(2) Any person who knowingly--
(A) makes any false material statement, representation, or
certification in, or omits material information from, or knowingly
alters, conceals, or fails to file or maintain any notice, application,
record, report, plan, or other document required pursuant to this
chapter to be either filed or maintained (whether with respect to the
requirements imposed by the Administrator or by a State);
. . .
shall, upon conviction, be punished by a fine pursuant to Title 18, or by
imprisonment for not more than 2 years, or both . . . .
42 U.S.C. 7413(c)(2)(A).
Shaw contends 42 U.S.C. 7413(c)(2)(A) is the sole and exclusive means
by which the Government may prosecute the making a false statement to the EPA
in violation of the CAA. Thus, he argues the district court lacked subject matter
jurisdiction over his prosecution under 18 U.S.C. 1001. Shaw also maintains
that because 42 U.S.C. 7413(c)(2)(A) and 18 U.S.C. 1001 proscribe the same
conduct, § 7413(c)(2)(A), the specific statute, trumps § 1001, the general statute,
unless Congressional intent demonstrates the general statute is to control. He
asserts the language of § 7413(c)(2)(A) and the legislative history of the two
statutes indicate Congress intended § 7413(c)(2)(A) to trump § 1001. Lastly, to
the extent there is any ambiguity as to which statute controls, Shaw contends the
rule of lenity requires application of § 7413(c)(2)(A) because its penalty
provision maximizes punishment at two years as opposed to five years under §
1001.
The Government maintains § 1001(a)(1) and § 7413(c)(2)(A) are two
separate statutes which criminalize different behavior--the former criminalizes a
scheme to conceal a material fact from the Government and the latter prohibits
the making of a false statement within a document required to be filed by the
EPA. It argues it was not required to choose one statute over the other and
Shaw's conduct (knowingly and willfully submitting false and fraudulent
representations to the EPA over a lengthy period of time) was prohibited by §
1001(a)(1). The Government further contends that because § 1001(a)(1) is not
ambiguous, the rule of lenity is inapplicable.
Shaw's jurisdictional argument is without merit. It is well settled that
"when an act violates more than one criminal statute, the Government may
prosecute[] under either so long as it does not discriminate against any class of
defendants." United States v. Batchelder, 442 U.S. 114, 123-24 (1979)
("Whether to prosecute and what charge to file or bring before a grand jury are
decisions that generally rest in the prosecutor's discretion."). This is true even
when one statute provides a harsher penalty. In Batchelder, the Supreme Court
was confronted with two statutes, 18 U.S.C. 922(h) and 18 U.S.C. 1202(a),
which proscribed the same conduct but which carried different statutory
maximums--five years and two years, respectively. Id. at 116-17. The
Government decided to prosecute the defendant under § 922(h) and its attendant
penalty provision, 18 U.S.C. 924(a); the defendant was sentenced to the five
year statutory maximum term of imprisonment. Id. On appeal, the Seventh
Circuit concluded the defendant's sentence was limited to the two year statutory
maximum applicable to violations of § 1202(a). Id. The Supreme Court
reversed. Id. at 118. It concluded nothing in the legislative history of §
1202(a)
(which was enacted after § 922(h) and § 924(a)) revealed Congress intended its
penalty provision to override § 924(a). Id. at 119-21. It also rejected the
application of the rule of lenity, stating § 924(a) unequivocally applies to
convictions under § 922(h). Id. at 121-22. Lastly, the Court found no
constitutional infirmity with the Government's choice to prosecute the defendant
under the statute carrying the harsher punishment. Id. at 124-25.
We addressed a similar issue in United States v. Wiles, 102 F.3d 1043
(10th Cir. 1996). There, the defendant was charged with making a false
statement to the Security and Exchange Commission (SEC) under 18 U.S.C. §
1001. Id. at 1066. On appeal, he alleged that Congress intended the Government
to prosecute the making of a false statement to the SEC under 15 U.S.C. § 78ff, a
specific provision in the Securities Exchange Act of 1934 which criminalizes the
willful making of a false or misleading statement to the SEC. Id. Thus, the
defendant argued that the making of a false statement to the SEC could not
support a conviction under § 1001. Id. We rejected this argument, holding:
"Without any express indication that Congress intended otherwise, we . . .
conclude that both § 78ff and § 1001 proscribe the making of false statements to
the SEC, and the government may prosecute such conduct under either statute."
Id. at 1067. See also United States v. Radetsky, 535 F.2d 556, 567-68
(10th Cir.
1976) (rejecting argument that the defendant should have been prosecuted under
specific statute criminalizing the making of false statements in connection with
medicare claims rather than § 1001 because there was no evidence of an intent to
make the specific statute a substitute for any part of § 1001).
The same reasoning applies here. Despite Shaw's attempt to persuade us
otherwise, we fail to discern from either the language of the CAA or its
legislative history any Congressional intent to foreclose prosecutions under §
1001 where § 7413(c)(2)(A) may also apply. Without such intent, we defer to the
Government's prosecutorial discretion.(25)
Moreover, the Government alleged
Shaw engaged in a scheme to conceal the presence of asbestos. Section
7413(c)(2)(A) of the CAA does not proscribe such conduct. Consequently,
charging Shaw under § 1001(a)(1), which does prohibit such conduct (see n.1,
supra), was proper.
2. Statute of Limitations
A five year statute of limitations applies to prosecutions under 18 U.S.C. §
1001. See 18 U.S.C. 3282 (providing a five year statute of limitations for
noncapital offenses). Shaw contends the statute of limitations began to run in
November 1993, when he submitted the original Notification of Demolition and
Renovation denying the presence of asbestos in Area A of the Shallow Water
Refinery. Because the original indictment was not filed until June 15, 1999, he
argues his prosecution under 18 U.S.C. 1001 was time-barred. He further
maintains that the Government cannot rely on the June 17, 1994 Notification of
Demolition and Renovation and accompanying letter because neither of these
documents contained false information. He alleges that at the time he made the
representations within those documents, he had been negotiating with the
Stifflers to supervise the asbestos abatement project and had made the
preliminary arrangements for BFI to remove and dispose of the asbestos at the
refinery. He also states the evidence at trial did not show he signed Carl
Stiffler's name to the notification. Indeed, he states his undisputed testimony
demonstrated he provided the Stifflers with a blank notification form and they
submitted it to him with Carl Stiffler's signature. Moreover, he argues the
Government cannot rely on the letter Jean Stiffler wrote to the KDHE in 1997
because she never testified that Shaw told her the cat cracker did not contain
asbestos. More importantly, he contends there is nothing in the record
demonstrating that Jean's conduct in 1997 should be imputed to him. Lastly,
Shaw maintains that the superseding indictment charged him with concealing the
presence of asbestos. Because the alleged false statements occurring in 1994 or
1997 concerned the removal of asbestos, not its presence, Shaw asserts the
Government cannot rely on these statements as conduct occurring within the five
years preceding the original indictment.
The Government argues Shaw's prosecution under § 1001 was not time-barred. It
asserts Shaw's ongoing scheme to defraud continued until at least June
20, 1994, but also into 1997. It points to the June 17, 1994 correspondence to
the EPA (which Shaw mailed on June 20, 1994) and the enclosed Notification of
Demolition and Renovation which contained the forged signature of "C.L.
Stiffler." It contends these documents falsely stated that the Stifflers would have
ESCM personnel on site as supervisors and that arrangements had been made
with BFI to remove and dispose of any asbestos. The Government also points to
Shaw's representation to Jean Stiffler in 1997 that the cat cracker had been tested
for asbestos and no asbestos had been found. Relying on this representation,
Jean wrote the KDHE stating the Stifflers had been informed the cat cracker did
not contain asbestos and it could be demolished.
We reject Shaw's statute of limitations argument. In criminal cases, the
statute of limitations normally begins to run when the crime is complete. United
States v. Reitmeyer, 356 F.3d 1313, 1317 (10th Cir. 2004). "A crime is complete
[when] every element in the crime occurs." Id. (quotations omitted). Here, the
superseding indictment charged Shaw with a scheme to conceal the presence of
asbestos from 1993 to 1997.(26)
Therefore, the crime was not completed and the
statute of limitations did not begin to run until this scheme was completed in
1997. United States v. Jensen, 608 F.2d 1349, 1355 (10th Cir. 1979) ("[T]he
statute of limitations is no bar if there is an ongoing scheme continuing into the
[statute of limitations] period.").(27)
Because the scheme continued into the five
years preceding the filing of the original indictment (June 15, 1999), the
indictment was timely. We also reject Shaw's argument that his conduct in 1994
and 1997 cannot be included in the scheme to conceal the presence of asbestos
because it involved the removal/disposal of asbestos, not its presence. Shaw
reads the term "presence of asbestos" in the superseding indictment too narrowly.
It is clear the Government did not seek to limit his scheme only to the
concealment of the physical presence of asbestos but also the concealment of its
improper removal and disposal. Indeed, in the superseding indictment, the
Government alleged Shaw's scheme to conceal included his preparation and
submission of the June 1994 Notification of Demolition and Renovation and
accompanying cover letter to the EPA. The documents indicated the asbestos
discovered at the refinery would be wetted, bagged and removed by BFI to its
landfill in Fountain, Colorado, and ESCM would be supervising the Stifflers'
removal of the asbestos. None of this information was true.(28) Indeed, Shaw
knew the Stifflers were burying insulation.
Even limiting Shaw's scheme to the concealment of the physical presence
of asbestos, we conclude Shaw's activities in 1994 and 1997 involved such
concealment. In November 1993, Shaw informed the EPA via the Notification of
Demolition and Renovation that Area A of the refinery did not contain asbestos,
when in fact it was riddled with asbestos. Continuing that concealment, none of
Shaw's sampling from Area A in March 1994 tested positive for asbestos.
Additionally, Shaw was aware the Stifflers were burying insulation and told Lee
Stiffler they could continue to do so. Shaw also gave the Stifflers permission to
drop the cat cracker in May 1997, which was subsequently discovered to contain
asbestos. Thereafter, the EPA ordered the Stifflers' demolition activities to cease
and the KDHE cited them for various state law violations. As a result, Jean
Stiffler wrote to the KDHE in July 1997 informing them no asbestos was present
on the cat cracker. At trial, Jean testified she based this statement on samples
Shaw took from the refinery. Therefore, contrary to Shaw's arguments, his
activities in 1994 and 1997 concerned the concealment of the presence of
asbestos.
Based on the above, we conclude the statute of limitations did not bar
Shaw's prosecution under 18 U.S.C. 1001(a)(1).
3. Duty to Disclose
Shaw argues that in order to convict him under § 1001, the Government
had to prove he had a duty to disclose the presence of asbestos to the EPA. He
states that under the EPA's regulations, only owners or operators are required to
complete and file a Notification of Demolition and Renovation and therefore only
owners or operators have a duty to disclose. Shaw contends it is undisputed that
he did not own the refinery. As to whether he was an "operator" of the facility,
he alleges the EPA's definition of operator as one who "operates, controls, or
supervises a stationary source" should be declared void for vagueness. See 42 U.S.C. 7412(a)(9). Alternatively, Shaw contends that to be an "operator," one
must be more than a mere consultant and, at a minimum, must actively participate
in the day-to-day activities of the demolition/renovation operation. He asserts the
Government's evidence at trial did not support such a finding. Specifically, he
points out he was not involved in the day-to-day operations at the refinery and
made only a few visits to the refinery over a four year period.
The Government alleges that although Shaw may not have had a duty to
report the presence of asbestos to the EPA, once he did so, he was obligated to
provide truthful information under § 1001. The Government also argues there is
no requirement under § 1001 that there be a separate statute or regulation
requiring the defendant to provide information.
Section 1001 of Title 18 encompasses two distinct offenses -- concealment
of a material fact (18 U.S.C. 1001(a)(1)) and the making of a false statement
(18 U.S.C. 1001(a)(2)).(29) Shaw
was convicted of the former. A conviction
under § 1001(a)(1), unlike that under § 1001(a)(2), requires proof that the
defendant had a legal duty to disclose the fact concealed.(30) The Government
must establish that "the law required disclosure of the information at the time the
defendant allegedly concealed it . . . ." Irwin, 654 F.2d at 679 ("[T]here can be
no criminal conviction for failure to disclose when no duty to disclose is
demonstrated."). Thus, to the extent the Government is arguing that it was not
required to prove that Shaw had a legal duty to disclose the presence of asbestos
to the EPA, it is mistaken. Indeed, the jury instructions required such a showing.
Nevertheless, the Government met its burden in this case. The "duty to
disclose" element of § 1001(a)(1) can be established by demonstrating that an
agency form required such disclosure. Kingston, 971 F.2d at 489 ("A
defendant's duty to disclose is established where a government form required a
disclosure of concealed information."). In this case, the Government presented
the jury with the November 1993 and June 1994 "Notifications of Demolition and
Renovation." These forms required disclosure of whether the demolition or
renovation project involved the removal of asbestos, the approximate amount of
asbestos, the description of the work practices to be used to prevent the emission
of asbestos, and the identity of the waste transporter and waste disposal site.
Thus, these forms created a legal duty on the one completing and submitting them
to disclose the presence of asbestos and if present, the method of abatement. It is
undisputed that Shaw completed and submitted these forms to the EPA.
Consequently, he had a legal duty to disclose the presence of asbestos. This is
true even if Shaw, as a non-owner/operator of the refinery, was not required to
complete or submit these forms to the EPA under the federal regulations. See
demolition activity involving asbestos to the EPA). The notification form itself,
apart from the federal regulations, created a duty to disclose. Additionally,
nothing in the regulations preclude an owner/operator from having an agent
complete and submit the notification on his/her behalf.
D. Conclusion
Based on the above, we affirm Shaw's conviction. We now turn to the
parties' sentencing arguments.
II. Sentence
In Shaw's presentence investigation report (PSR), the probation officer
calculated the base offense level as 6 pursuant to USSG §2F1.1, the guideline
applicable for a violation of 18 U.S.C. 1001(a)(1).(31) The officer enhanced the
base offense level by five based on the EPA's estimate that it would cost $50,000
to clean up the asbestos improperly buried at the Shallow Water Refinery. See
USSG §2F1.1(b)(1)(F) (providing for a five level increase in the base offense
level if the "loss" was more than $40,000 but less than $70,000). The officer
also enhanced the base offense level by two levels because the offense involved
repeated acts and therefore more than minimal planning. See USSG
§2F1.1(b)(2). The probation officer further recommended a two level upward
adjustment because the offense was committed by someone with special skill.
See USSG §3B1.3. Based on a total offense level of 15 and a criminal history
category of I, the probation officer determined the sentencing guideline range
was eighteen to twenty-four months imprisonment.
Shaw filed numerous objections to the PSR. In particular, he opposed the
five level enhancement based on the "loss" exceeding $40,000, the two level
enhancement for more than minimal planning and the two level upward
adjustment because the offense was committed by someone with special skill.
Shaw also filed a motion for downward departure based on aberrant behavior.
Shaw initially appeared for sentencing on June 29, 2001, but the sentencing
hearing was continued to September 5, 2001, to allow the parties to brief the
subject matter jurisdiction issue. Ultimately, the district court imposed the five
level enhancement based on the "loss" exceeding $40,000,(32) denied the two level
enhancement for more than minimal planning, denied the two level upward
adjustment based on the offense being committed by someone with special skill
and denied the motion for downward departure based on aberrant behavior.
Based on these determinations, the district court calculated an offense level of
11. With a Criminal History Category I, the court determined the applicable
guideline range was eight to fourteen months imprisonment. The court sentenced
Shaw to four months imprisonment and two years of supervised release,
recommending that Shaw serve his four month sentence in a halfway house. As a
special condition of supervised release, the court ordered Shaw to serve four
months of home confinement. See 18 U.S.C. 3563(b)(19), 3583(d);
see also
USSG §5F1.2 ("Home detention may be imposed as a condition of probation or
supervised release, but only as a substitute for imprisonment."). The court
further ordered Shaw to pay $50,000 in restitution to the EPA.
On appeal, Shaw challenges the five level enhancement based on the "loss"
exceeding $40,000 under USSG §2F1.1(b)(1)(F) and argues he was sentenced in
violation of the Sixth Amendment under Blakely v. Washington, 542 U.S. 296
(2004). The Government cross-appeals, arguing the district court erred in
denying the two level enhancement for more than minimal planning under USSG
§2F1.1(b)(2). As we discuss next, because we conclude the district court erred in
failing to impose a two level enhancement for more than minimal planning, we
need not reach the other issues.
A. Standard of Review
The Supreme Court recently decided United States v. Booker, 125 S. Ct.
738 (2005). In Booker, the Supreme Court invalidated the mandatory-nature of
the federal sentencing guidelines. Id. at 756-57. It also altered our standard of
review, requiring us to review sentences for unreasonableness. Id. at 765-66.
However, because Shaw was sentenced prior to Booker, we apply the
pre-Booker
standard of appellate review, reviewing legal questions de novo and any factual
findings for clear error. United States v. Souser, 405 F.3d 1162, 1165 (10th Cir.
2005); United States v. Doe, 398 F.3d 1254, 1257 (10th Cir. 2005).
B. Denial of Two Level Enhancement for More than Minimal Planning
Section 2F1.1(b)(2) of the guidelines requires a two level enhancement to
the base offense level if "the offense involved [] more than minimal planning . . .
." The Commentary to §2F1.1 refers to the Commentary to §1B1.1 for the
definition of "more than minimal planning." USSG §2F1.1 comment. (n. 2). The
Commentary to §1B1.1 states:
"More than minimal planning" means more planning than is typical for
commission of the offense in a simple form. "More than minimal
planning" also exists if significant affirmative steps were taken to conceal
the offense. . . . "More than minimal planning" is deemed present in any
case involving repeated acts over a period of time, unless it is clear that
each instance was purely opportune. Consequently, this adjustment will
apply especially frequently in property offenses.
USSG §1B1.1 comment. (n. 1(f)). "[T]he . . . more than minimal planning
enhancement[] [is] designed to target criminals who engage in complicated
criminal activity because their actions are considered more blameworthy and
deserving of greater punishment than a perpetrator of a simple version of the
crime." United States v. Rice, 52 F.3d 843, 851 (10th Cir. 1995).
In its cross-appeal, the Government challenges the district court's denial of
a two level enhancement under USSG §2F1.1(b)(2) for more than minimal
planning. It contends this enhancement was appropriate because Shaw engaged
in repeated acts over a period of time, including: (1) making fraudulent written
and oral representations to the EPA in a telephone call, letter and Notification of
Demolition and Renovation in November 1993; (2) conducting a fraudulent
sampling of the refinery on March 3, 1994; (3) making fraudulent representations
to the EPA in a letter and revised Notification of Demolition and Renovation in
June 1994; (4) obtaining a false signature on the revised "Notification of
Demolition and Renovation;" and (5) representing to the Stifflers that the cat
cracker did not contain asbestos. The Government also alleges Shaw's actions
involved "more planning than is typical for commission of the offense in a simple
form." It points out that in November 1993, rather than simply informing the
EPA that there was no asbestos in Area A, Shaw "took pains" in his
correspondence to (1) include his certification as a licensed supervisor of
asbestos abatement projects, (2) advise that he had personally inspected the
premises, and (3) inform the EPA that demolition activities would stop if any
asbestos was found. (Government's Br. at 29.) The Government also refers to
the fact that Shaw then conducted a sampling of the refinery in such a way as to
confirm that no asbestos was present in Area A. It also points to Shaw's false
assurances to the EPA in 1994 that the Stifflers were complying with the
environmental regulations and ESCM was supervising their activities. Lastly, the
Government points out Shaw informed the Stifflers it was permissible to bury
insulation from Area A, thereby preventing the EPA from discovering it.
Shaw contends the district court properly denied the more than minimal
planning enhancement. He contends the March 1994 sampling, the burial of
asbestos and the June 1994 correspondence were "purely opportune" and not in
furtherance of the offense. He also contends that although his sampling in Area
A did not reveal the presence of asbestos, many of his other samples tested
positive for asbestos. Based on his sampling, he prepared a revised "Notification
of Demolition and Renovation," stating "all areas" of the facility contained
asbestos. (R. Vol. I at 109.) Therefore, he contends he was not trying to deceive
the EPA about the presence of asbestos.
A district court's decision that the defendant engaged in more than minimal
planning is reviewed for clear error. United States v. Orr, 68 F.3d 1247, 1253
(10th Cir. 1995); United States v. Williams, 966 F.2d 555, 558 (10th Cir. 1992).
"Clear error occurs . . . when we are left with the firm conviction a mistake has
been made." United States v. Lin, 410 F.3d 1187, 1192 (10th Cir. 2005).
At the initial sentencing hearing, the district court denied Shaw's objection
to the more than minimal planning enhancement, stating:
In this case it appears to me - and it is accurate - this occurred over
a
period of four years, four and a half years, started in '93 and went
into '97. . . . I am aware, of course, . . . that Mr. Shaw was
acquitted on a couple of counts as well, but the standard that we use
here in terms of whether minimal planning occurred or not is not
whether it's been proved beyond a reasonable doubt or not, but it's a
much lighter standard here. It is my sense, given the number of
contacts that Mr. Shaw had with the Stifflers, with the state and the
other persons who have been involved in this case that -- let me back
up. I think a good case could be made that there wasn't more than
minimal planning or he probably would have done a better job of
trying to cover his tracks than what he did. The more than minimal
planning, seems to me the strongest evidence, is just the period of
time that it went on and the fact that Mr. Shaw did not disengage
himself from this process and made affirmative representations with
respect to the absence of asbestos at the site and that testing had, in
fact, been done when it appears that that clearly was not the case.
I think in the circumstance, while it's a close question, that the two
point increase for more than minimal planning is appropriate, and I
am going to deny that objection . . . .
(R. Vol. VIII at 1087-88.) However, at the final sentencing hearing, the district
court reconsidered this determination and denied the more than minimal planning
enhancement. It stated:
[W]hile I think technically I was correct in dealing with [Shaw's objection
to the more than minimal planning enhancement] and upholding the two-level enhancement last
time, I'm not satisfied that maybe being technically
correct is appropriate in this matter and taking a look at what Mr. Shaw's
responsibilities actually were. I'm planning to change my ruling on that to
grant [Mr. Shaw's] objection with respect to minimal planning.
(Id. at 1123.)
The district court was correct the first time. As the Government argues,
and the district court found during the initial sentencing hearing, Shaw's offense
involved "repeated acts over a period of time." "[T]he notion of repeated acts
refers to a series of acts each of which would be criminal standing alone, rather
than referring to a crime that requires the completion of a series of steps."
United States v. Proffit, 304 F.3d 1001, 1005 (10th Cir. 2002). In order to have
"repeated acts," "there must have been more than two instances of the behavior in
question." United States v. Bridges, 50 F.3d 789, 793 (10th Cir. 1994).
The evidence at trial clearly showed that Shaw engaged in more than two
acts of concealment of the presence of asbestos (each of which would be criminal
standing alone) over a four year time span. In 1993, before Branscum's first visit
to the refinery, Shaw told the Stifflers not to allow any government inspectors on
the property. After Branscum's visit, Shaw telephoned Alice Law of the EPA,
falsely informing her no asbestos was present in Area A of the refinery. The next
day, he filed the first Notification of Demolition and Renovation and cover letter,
falsely stating he had inspected the property, no asbestos was present in Area A
and ESCM would be "working with [the Stifflers] very closely on the remainder
of [the demolition] project to assist them in their compliance efforts." (R. Supp.
Vol. I at 39.) In March 1994, Shaw conducted a fraudulent sampling of the
refinery. He also observed holes where the Stifflers had buried insulation and
told the Stifflers they could continue to bury the insulation.(33) On June 20, 1994,
Shaw submitted another cover letter and the revised Notification of Demolition
and Renovation containing the forged signature of "C.L. Stiffler." These
documents falsely indicated that the Stifflers had arranged for BFI to remove the
asbestos from the refinery and that ESCM personnel would be on site to
supervise the Stifflers' abatement activities. In 1997, the Stifflers received
Shaw's permission to drop the cat cracker. In July 1997, based on Shaw's
sampling of the cat cracker, Jean Stiffler informed the KDHE that the cat cracker
did not contain asbestos. Contrary to Shaw's arguments, we find none of the
above actions "purely opportune," that is, "spur of the moment conduct, intended
to take advantage of a sudden opportunity." See United States v. Rust, 976 F.2d
55, 57 (1st Cir. 1992). Consequently, a more than minimal planning
enhancement was warranted under the "repeated acts" provision of USSG §1B1.1
comment. (n.1(f)). We also find that Shaw's offense involved "more
planning than is typical for commission of the offense in a simple form."(34) The
proper inquiry is whether Shaw's actions "demonstrated a greater amount of
planning than [is] required" to engage in a scheme to conceal the presence of
asbestos from the EPA in its simple form. Proffit, 304 F.3d at 1006. While
Shaw's scheme to conceal the presence of asbestos could have been
accomplished merely by submitting the false "Notifications of Demolition and
Renovation" in 1993 and 1994, Shaw's conduct went beyond that. He also told
the Stifflers not to permit any government inspectors on the property, took a
fraudulent sampling of the refinery, told the Stifflers they could bury insulation
from Area A and gave the Stifflers permission to drop the cat cracker. These
actions demonstrate a level of planning in excess of the amount of planning
required to engage in a scheme to conceal the presence of asbestos in its simple
form.
The district court's reasons are insufficient for reversing its previous
determination that the offense involved more than minimal planning. It did not
explain why "being technically correct" was inappropriate in this case.
Moreover, it is unclear how "taking a look at what Mr. Shaw's responsibilities
actually were" constituted grounds for the district court reversing its prior
decision. Therefore, we conclude the court clearly erred in denying the more
than minimal planning enhancement and a remand for re-sentencing is necessary.
C Imposition of Five Level Enhancement for Loss Exceeding $40,000
and Blakely
Shaw contends the district court erred in imposing the five level
enhancement under § 2F1.1(b)(1) based on the "loss" exceeding $40,000. He
also argues his sentence violates the Sixth Amendment under Blakely. Because
we conclude this case must be remanded for re-sentencing on other grounds, we
need not address these issues. Souser, 405 F.3d at 1163 n.1; United States v.
Cano-Silva, 402 F.3d 1031, 1039 (10th Cir. 2005). However, Shaw's re-sentencing must
be conducted in light of the Supreme Court's recent decision in
Booker.
III. Conclusion
Shaw's conviction is AFFIRMED. We REMAND
this matter to the
district court with instructions to resentence him in accordance with this order
and judgment and Booker.
Entered by the Court:
Terrence L. O'Brien
United States Circuit Judge
FOOTNOTES
Click footnote number to return to corresponding location in the text.
*. This order and judgment is not binding
precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. The court generally disfavors
the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
1. 18 U.S.C. 1001(a)(1) provides:
(a) Except as otherwise provided in this section, whoever, in any matter
within the
jurisdiction of the executive, legislative, or judicial branch of the Government of
the United States, knowingly and willfully--
(1) falsifies, conceals, or covers up by any trick, scheme, or device a
material fact .
. .
shall be fined under this title [and] imprisoned not more than 5 years . . . .
2. The Shallow Water Refinery was
abandoned in the early 1980's. It consists of
approximately eighty acres.
3. Disagreeing with Shaw's representations
concerning the presence of asbestos,
Yaffe and Allred offered EZ Serve a negative bid of $225,000-$250,000 to demolish the
refinery. They believed they could sell the scrap metal on the property for $500,000.
However, they calculated it would require $225,000-$250,000 to demolish the refinery
and $225,000-$250,000 to remove the asbestos and hydrocarbons. Thus, in order to
realize a profit, Yaffe and Allred's bid required EZ Serve to pay for abatement.
4. The Stifflers obtained the $20,000 down
payment with a bank loan. Shaw
assisted them in securing the loan by writing a letter to the bank estimating the value of
the scrap metal on the property at $725,000.
5. The Stifflers have only paid Shaw $1,000
of the $30,000 balance.
6. Jean Stiffler testified she only has an
eighth grade education and usually needs
someone to explain to her what she reads.
7. Federal regulations require an owner or
operator of a demolition or renovation
activity involving the presence of asbestos to provide the Environmental Protection
Agency with written notice of the intent to demolish or renovate and to update this notice
if the amount of asbestos changes by at least twenty percent. 40 C.F.R. § 61.145(a),
(b)(1),(2). This notice must be filed with the EPA at least ten days before asbestos
stripping and removal begins or demolition work commences, depending on the specific
circumstances of each project. 40 C.F.R. § 61.145 (b)(3)(I). This notice is referred to
throughout this opinion as a "Notification of Demolition and Renovation."
8. Branscum testified experience had taught
him that refineries often had asbestos-containing insulating material.
9. Both Lee and Jean Stiffler testified they
denied Branscum access to the refinery
because Shaw had told them not to let any government inspectors on the property without
contacting him first.
10. Shaw obtained accreditation as a
supervisor of asbestos abatement projects from
the Georgia Institute of Technology on October 15, 1993.
11. Lee Stiffler testified that the Texas
project involved the removal of asbestos,
which Shaw supervised. He stated Shaw required the asbestos to be wetted prior to its
removal, bagged and hauled to a landfill. He also testified Shaw required the workers to
be suited properly when handling asbestos. Lee admitted he believed the regulation of
asbestos was "overrated." (R. Vol. III at 364.)
12. NESHAP stands for National
Emissions Standards for Hazardous Air Pollutants.
These standards were established by the Environmental Protection Agency pursuant to the
CAA and specifically regulate any activity which may result in the emission of asbestos
into the atmosphere, including the disposal of asbestos. See 42 U.S.C. 7412
(b), (d)(1);
40 C.F.R. §§ 61.140 et seq.
13. The refinery was divided into three
areas -- A, B and C. Area A was referred to
as the "light product storage area" where the oil was once stored prior to processing. (R.
Vol. VI at 886.) Area B was the hot storage area and Area C was the main process area,
containing heaters and distillate columns.
14. Lee Stiffler testified that despite
numerous calls to the KDHE, his family never
received notice of the results of Branscum's sampling.
15. One asbestos-removing procedure
involves wetting the asbestos-containing
material with a water solution, removing the asbestos, sealing it in plastic bags and
disposing of it in an approved landfill.
16. Lee testified insulation was buried in
three different locations on the property.
He stated over 100 pounds of insulation was dumped in each location.
17. Lee also testified that on other visits to
the refinery, Shaw observed other holes
where insulation material had been dumped. Lee stated Shaw did not "really say a whole
lot, just carry on." (R. Vol. III at 352.)
18. It is unclear who signed "C.L. Stiffler"
to the notification. According to Jean
Stiffler, who testified she was familiar with her husband's signature, it was not Carl's
signature. Shaw also denied forging Carl's signature. According to Shaw, he left several
blank copies of the notification with Carla Stiffler and she informed him she would
ensure that one of them got signed. Apparently, the Stifflers returned two
forms, one
bearing the signature "C.L. Stiffler" and one bearing the signature "Lee Stiffler." Shaw
completed and submitted both forms but filed the form containing the "C.L. Stiffler"
signature with the EPA.
19. Later, in April 1996, Southwest
Wrecking and Carl and Jean Stiffler became
targets of Wright's investigation.
20. Jean Stiffler testified that before these
individuals arrived at the refinery, Shaw
told her and her family that they needed to "stick together," which she interpreted to mean
that they not allow themselves to be separated until they all had the same story to tell. (R.
Vol. IV at 423.)
21. During the EPA's visit, the Stifflers
were interviewed. The Stifflers stated they
had earned $150,000 from the sale of scrap metal from the refinery and estimated another
$35,000 worth of scrap metal remained on the property.
22. A catalytic cracker/cat cracker is "[a]n
oil refinery unit in which the cracking of
petroleum takes place in the presence of a catalyst." The American Heritage
Dictionary of the English Language (4th ed. 2000). The "cracking" of petroleum is
the thermal decomposition of petroleum molecules into shorter molecules to extract low-boiling
fractions such as gasoline. Id.
23. When removing asbestos from a
height, the proper procedure is to lower it, not
drop it, in order to minimize the potential for airborne release of asbestos.
24. Jean Stiffler testified they contacted
Shaw for permission prior to dropping the
cat cracker.
25. Because we find no ambiguity in either
statute, the rule of lenity does not apply.
Callanan v. United States, 364 U.S. 587, 596 (1961) (holding that the rule of lenity,
"as is
true of any guide to statutory construction, only serves as an aid for resolving an
ambiguity; it is not to be used to beget one").
26. Count II of the superseding indictment
stated the following in relevant part:
Commencing in November of 1993 . . . and continuing through September
of 1997
. . .
EDWARD A. SHAW
within the District of Kansas, did knowingly and willfully, in a matter
within the
jurisdiction of the [EPA], [] falsify, conceal or cover[] up, by a scheme, material
facts, to wit the presence of asbestos at various locations within the Shallow Water
Refinery site . . . .
(R. Vol. I at 40.) Thereafter, Count II alleged Shaw's scheme to falsify, conceal and
cover up the presence of asbestos at the Shallow Water Refinery included but was not
limited to the following acts: (1) Shaw advising the Stifflers to deny Branscum access to
the facility, (2) Shaw's November 8, 1993 letter informing the EPA he had inspected the
refinery, that Area A only consisted of bare steel tanks and piping and Area A did not
contain asbestos, (3) Shaw's submission of the November 8, 1993 Notification of
Demolition and Renovation indicating there was no asbestos-containing material in Area
A of the refinery, (4) Shaw's June 17, 1994 letter informing the EPA that ESCM had
arranged for BFI to haul and dispose of the asbestos from the refinery, (5) Shaw's filing
of the revised Notification of Demolition and Renovation bearing the purported signature
of "C.L. Stiffler" and containing false and misleading representations, (6) Shaw's
statement at the August 1, 1997 meeting between the KDHE and the Stifflers indicating
the Stifflers had contacted several environmental firms to address the problems at the
Shallow Water Refinery, and (7) Shaw's August 15, 1997 letter to the EPA and KDHE
advising of the steps the Stifflers were taking to comply with the environmental laws and
regulations.
27. This is not to be confused with the
continuing offense doctrine. In United States
v. Dunne, 324 F.3d 1158, 1166 (10th Cir. 2003), we held § 1001 is not a continuing
offense crime for statute of limitations purposes. However, the fact that § 1001 is not a
continuing offense crime is not dispositive of the statute of limitations issue because the
Government charged Shaw under § 1001's scheme provision. Id.
at 1164 (stating a
continuing offense "is not the same as a scheme or pattern of illegal conduct") (quotations
omitted).
28. Shaw attempts to minimize the falsity
of this information. He states that at the
time he made the representations in the 1994 notification and cover letter, ESCM was in
the process of negotiating with the Stifflers to provide them its services and BFI had been
contacted regarding the removal of asbestos. However, the documents state these
representations as established facts -- that ESCM had arranged for BFI to remove the
asbestos and that its personnel would be on site as supervisors.
29. 18 U.S.C. 1001(a)(2) states in
relevant part:
[W]hoever, in any matter within the jurisdiction of the executive,
legislative, or
judicial branch of the Government of the United States, knowingly and willfully -
. . .
(2) makes any materially false, fictitious, or fraudulent statement or
representation; . . .
shall be fined [or] imprisoned not more than 5 years . . . .
30. Compare United
States v. Kingston, 971 F.2d 481, 489 (10th Cir. 1992) (holding
that under § 1001(a)(1), the Government must prove: "1) the defendant knowingly
concealed a fact by any trick, scheme, or device; 2) the defendant acted willfully; 3) the
fact concealed was material; 4) the subject matter involved was within the jurisdiction of
a department or agency of the United States; and 5) the defendant had a legal duty to
disclose the fact concealed"), with United States v. Irwin, 654 F.2d 671, 675-76
(10th Cir.
1981) (holding that § 1001(a)(2) requires the Government to show: "(1) the defendant
made a statement; (2) the statement was false, fictitious or fraudulent as the defendant
knew; (3) the statement was made knowingly and willfully; (4) the statement was within
the jurisdiction of the federal agency; and (5) the statement was material").
31. Because Shaw was sentenced pursuant
to the 1995 edition of the United States
Sentencing Guidelines Manual, all guideline citations refer to the 1995 edition, unless
noted otherwise.
32. At sentencing, the Government
presented the testimony of Kenneth Rapplean,
the on-scene coordinator in the Super Fund Division of the EPA. He testified
approximately 510 cubic yards of asbestos was buried at the refinery and estimated it
would cost the EPA a total of $247,479 to clean it up. Based on this testimony, the
district court found that the total cost to clean up the refinery was close to a quarter of a
million dollars and therefore, the cost of remediation will "clearly" exceed $50,000. (R.
Vol. VIII at 1075.) Consequently, the court concluded a five level enhancement to the
base offense level was appropriate under USSG §2F1.1(b)(1)(F).
33. Shaw argues that none of the Stifflers
testified he told them they could bury
asbestos; rather, he contends the evidence at most consisted of him telling Jean
Stiffler
they could bury insulation. This argument is disingenuous. The evidence at trial
demonstrated Shaw told the Stifflers they could bury the insulation without any testing as
to whether the insulation contained asbestos. The evidence further showed that the
Stifflers relied on Shaw's advice concerning the removal of the insulation and Shaw
never ensured that the insulation did not contain asbestos prior to its removal. Moreover,
once Shaw learned the refinery contained asbestos, he never advised the Stifflers on how
to properly remove and dispose of it.
34. We recognize that the district court did
not address whether Shaw's offense
involved more than minimal planning based on it requiring "more planning than is typical
for commission of the offense in a simple form." Nevertheless, because the Government
raised it below as a grounds for imposing the more than minimal planning enhancement
and no additional fact-finding need be made, we address it as an additional reason the
court clearly erred in denying a more than minimal planning enhancement in this case.
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This document cites
- U.S. Court of Appeals for the Tenth Circuit - United States of America, Plaintiff-Appellee, v. John Doe, Defendant-Appellant., 398 F.3d 1254 (10th Cir. 2005)
- U.S. Court of Appeals for the Tenth Circuit - United States of America, Plaintiff-Appellee, v. David Dean Austin, Defendant- Appellant., 231 F.3d 1278 (10th Cir. 2000)
- U.S. Court of Appeals for the Tenth Circuit - United States of America, Plaintiff-Appellee, v. Denise Souser, Defendant-Appellant., 405 F.3d 1162 (10th Cir. 2005)
- U.S. Court of Appeals for the Tenth Circuit - United States of America, Plaintiff-Appellee, v. Stephen Ralph Proffit, Defendant-Appellant., 304 F.3d 1001 (10th Cir. 2002)
- U.S. Court of Appeals for the Tenth Circuit - United States of America, Plaintiff-Appellee, v. Larry F. Anderson, Defendant-Appellant., 319 F.3d 1218 (10th Cir. 2003)
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