Loss Amount is Everything: Sixth Circuit Affirms Lengthy Sentence of Corporate Executive in Public Bribery Case

For most white-collar cases, the key issue at sentencing is the calculation of the loss amount. Although not mandatory, the Sentencing Guideline range will unquestionably influence the final sentence. And the Guidelines rely heavily on the loss amount to reach a final sentencing range.

In a bribery case, the Guidelines’ range will be determined by a few factors. The key factors are (1) whether the recipient is a public official and (2) the loss amount. In a case involving a conspiracy to commit bribes, however, the question becomes whether it is appropriate to include the value of bribes paid to (or by) co-conspirators or only the bribes paid to the defendant being sentenced. The Sixth Circuit recently affirmed the inclusion of the value of bribes paid to a co-conspirator in the loss calculation.

Defendant Thomas Greco worked for MetroHealth System, which was a county-owned health care provider in Cleveland, Ohio. He was a project manager and facilities director. (County-owned = bribery of public official.) His boss, John Carroll, was the Vice-President of Facilities and Institutional Management.

Mr. Carroll developed a rather straightforward bribery scheme. According to the jury, Mr. Greco helped facilitate it for several years. Under the scheme, the vice-president of an outside construction company, East-West Construction Company, would bribe Mr. Greco and Mr. Carroll by purchasing them gift cards, lunches, trips and other goods. This vice-president, Nilesh Patel, would then inflate invoices submitted to MetroHealth for construction work done by East-West to cover the amount of the bribes.

Simple, huh? It was simple until Mr. Patel decided to spill his guts.

Discovery of the Scheme

At some point, Patel had second thoughts about the scheme to bribe these public officials. According to the Sixth Circuit’s decision, Patel decided to “contact the government and to confess his participation in the bribery scheme.” He cooperated with the government and received a plea deal with a reduced sentence.

The scheme unraveled. Mr. Greco and Mr. Carroll were indicted for conspiracy to commit bribery, bribery, violating the Hobbs Act, conspiracy, filing false tax returns and conspiring to commit wire fraud.

After a three-week trial, Mr. Greco was found guilty on all counts. He was sentenced to 112 months in prison, three years’ supervised release and $994,734.84 in restitution to MetroHealth.

Competing Loss Amounts

The main issue at sentencing was the loss amount. There were three competing calculations:

  • The government argued that the loss amount should be $2.8 million, based on the profits that East-West had received from the MetroHealth construction projects that Mr. Greco managed. This would have added 18 levels to the Guideline range, under § 2B1.1 (which was cross referenced from § 2C1.1, the guideline for bribery).
  • The probation officer claimed that the loss amount was $628,000, based on the amount that Mr. Patel had admitted providing to both Mr. Carroll and Mr. Greco during the scheme. This would have added 14 levels.
  • Mr. Greco argued that the loss amount was $70,000, based on the amount he claimed the government had proven Mr. Greco received from Mr. Patel. This would have added 6 levels.

The district court rejected all three proposals. It ultimately concluded that the amount was “approximately $200,000,” resulting in a 12-level increase in the sentencing calculation. The Guidelines allow for a 12-level increase when the loss amount is between $200,000 and $400,000.

The district court rejected the government’s proposal because there was insufficient evidence that Mr. Greco—rather than Mr. Carroll—had knowledge or control over the larger construction projects. It rejected the probation officer’s suggestion because it was based solely on Mr. Patel’s testimony, which was suspect. The district court also rejected Mr. Greco’s suggestion because courts never accept a defendant’s suggested loss amount Mr. Greco was liable for the value of benefits his co-conspirator had received as well as for what he received.

Arguments on Appeal

On appeal, the Sixth Circuit affirmed the 112-month sentence. Mr. Greco argued that the district court first erred because it relied on Mr. Patel’s and Mr. Carroll’s testimony about the value of the payments to Mr. Carroll. The Sixth Circuit disagreed, relying on settled law that these credibility judgments by the district court are “basically unassailable” on appeal. In addition, it noted that there was also testimony of Mr. Greco’s family members and documentary evidence to prove the amount of the bribes, not only the testimony of Mr. Patel and Mr. Carroll.

According to the Sixth Circuit, the record showed that the district court “was conservative in its estimation of the loss and benefit that resulted” from the scheme. The evidence showed that Mr. Carroll alone received at least $298,216.  So, the district court’s conclusion that the loss amount for Mr. Greco, based on the amounts received by Mr. Greco and Mr. Carroll together, was “approximately $200,000” was not error.

Mr. Greco also argued that the government did not produce direct evidence of Mr. Greco’s participation in the scheme—even though the government had the opportunity during the investigation to develop this direct evidence—so it should not be permitted to rely on indirect evidence alone. Mr. Greco appeared to want the court to adopt the presumption used in spoliation cases that the jury could presume that the missing evidence would be unfavorable to the party who was responsible for its loss.

Not surprisingly, the Sixth Circuit decline to adopt the spoliation presumption. Mr. Greco could not show that the government had not had a “culpable” state of mind in not collecting the evidence. In addition, the court pointed out that the “district court did not rely upon the missing evidence when making its sentencing calculation.”  Yes, that emphasis is the Court’s, not mine.

Mr. Greco’s final challenge to the loss calculation was to argue that it was procedurally unreasonable. The Sixth Circuit found that the lower court had adequately explained its reasoning.

Not a Surprising Outcome

This decision is not surprising. A defendant in a conspiracy case cannot reasonably expect to be sentenced based on his conduct alone. Sentencing is just one reason why the government loves to tack on conspiracy charge—it allows for the conduct of other co-conspirators to be used to calculate loss amounts and other aspects of the sentence. It can open the floodgates at the sentencing stage. This case is a good example.

I wish I had some good advice about how to avoid a conspiracy charge in the first place, but I don’t. If you have some, feel free to let me know. I’d be happy to have a post entitled “10 Ways to Avoid a Conspiracy Charge.” I’m sure a post like that would greatly improve my SEO.

This entry was posted in Appeal, Bribery, Conspiracy, Conviction After Jury Trial, Sentencing and tagged . Bookmark the permalink.

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