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United States v. Adcock

July 16, 2008


Appeal from the United States District Court for the Central District of Illinois. No. 04-CR-30065-Jeanne E. Scott, Judge.

The opinion of the court was delivered by: Wood, Circuit Judge


Before MANION, WOOD, and SYKES, Circuit Judges.

For at least a decade, Thomas Adcock, Jr., worked for a nonprofit corporation in Pana, Illinois, that provides housing for persons of low income and senior citizens. His company, the Housing Authority of Christian County ("HACC"), received most of its funds from the federal government. Adcock ran into trouble when, in his capacity as Maintenance Supervisor for one facility, he orchestrated a contract for painting the individual units and failed to disclose his own substantial economic interest in that contract. When his involvement in the company to which the contract had been awarded came to light, he was indicted and charged with six counts of wire fraud, three counts of theft of government funds, three counts of embezzlement of government funds, two counts of submitting false documents, and one count of making a false statement. See 18 U.S.C. §§ 1343, 666A, 641, and 1001. The government dismissed the embezzlement counts, but a jury found Adcock guilty on the remaining 12 charges. The district court sentenced him to 21 months in prison and ordered him to pay $41,174.09 in restitution. We affirm.


HACC operates housing facilities throughout Christian County, Illinois; it relies primarily on funds from the U.S. Department of Housing and Urban Development ("HUD"), some of which come in the form of a monthly subsidy and others as particular grants. Among its funding sources is a capital grant that requires it to create a five-year plan for the maintenance of its facilities. Like other federal grantees, HACC must follow certain federal rules about spending. Of particular importance for this case are HUD's conflict-of-interest regulations, which require grantees to avoid conflicts in the award and administration of contracts. No employee, officer, or agent of a grantee may participate in the selection, the award, or the administration of a contract supported by federal funds if a conflict of interest (either direct or indirect) would be involved. These rules appeared, among other places, in a series of employee handbooks that HACC published in 1993, 1996, and 2000. HACC gave copies of these handbooks to its employees.

Adcock first began working for HACC in 1994, when he was hired to be the live-in custodian for a facility called Pana Towers. In 1997, he was promoted to the position of Maintenance Supervisor for HACC. In this new job, he worked with HACC's Executive Director, Reva Woolard, her successor, Richard Deere, and the Board of Commissioners of HACC. As Maintenance Supervisor, Adcock was responsible for deciding which maintenance projects needed to be included in the five-year plan. The plan itself was revised every year and was subject to HUD approval. After a plan received HUD approval, HUD funded it by allocating accounts on which HACC was authorized to draw to pay invoices. The payments were accomplished through wire transfers of funds from the United States Treasury to HACC's bank account in Pana, Illinois.

From time to time, HUD evaluated the condition of the apartment units that it was subsidizing. In the course of these evaluations, it criticized HACC for failing to keep up with painting its occupied units. Adcock passed this criticism along to Woolard and told her that his staff was too busy to undertake the painting. He recommended that the project should be awarded to an outside contractor, after a bidding process. Woolard agreed to do so.

When HACC opened the bids in March of 1999, one of the lowest that it found was from a company then called "A-1 Maintenance." (Later, the company changed its name to A Maintenance, but we refer to it as A-1.) Adcock told Woolard and the Assistant Executive Director that A-1 had been created by Naidean Miller, a person who had done other community service projects for HACC. Adcock did not mention that he was actually the person who had written and submitted the bid in the name of A-1 Maintenance. He also made no mention of the fact that he had signed the name of his son, Justin, to the contract before he showed it to Miller. The bid from A-1 listed three references: Adcock himself, Dale Myers (Adcock's father-in-law), and Jim Dressen, an employee in HACC's maintenance department who was not aware that his name was being used. Indeed, Dressen and a few other employees had asked Adcock if they could bid on the project, but he told them that, as employees, they were ineligible.

When the A-1 contract was presented to the Board of Commissioners for its approval on March 30, 1999, Woolard recommended that it be accepted. Adcock was present at that meeting. In response to a question from a Board Member, he falsely represented that Miller was the owner of A-1. He said nothing about the fact that either he or any of his family members might have an interest in the arrangement. Under the contract, A-1 agreed to the following schedule of payments: $190 for painting an efficiency apartment; $390 for painting a one-bedroom apartment; and $490 for painting a two-bedroom apartment.

After the Board awarded the contract to A-1, Adcock told Miller that his son, Justin, had won the contract, and that Justin wanted to hire her to perform the actual painting. She signed a paper agreeing to work as a subcon-tractor for Justin. Under that agreement, Miller agreed to accept $190 for painting a one-bedroom apartment (giving "Justin" a nice $200 profit for that work) and $240 for a two-bedroom apartment ($250 less than the amount specified in the A-1 contract). Over the next two years, Miller painted approximately 132 units for HACC. Adcock told her which ones to do, and she then reported back to him, listing the units she had completed. She was paid by checks signed in the name of Justin Adcock, although she dealt only with defendant Thomas Adcock. Justin was vaguely aware of what was going on. He painted a few units; he opened a bank account in the name of A-1 at his father's request; but otherwise he paid no attention to the company, since he was away at college. Woolard at one point wondered what Justin was doing, because Justin's name appeared on the contract and the insurance certificate. Adcock told her that Justin was just helping out Miller, who could not obtain insurance in her own name.

Adcock personally typed and submitted all of the invoices for A-1's work to HACC. When he submitted an invoice, HACC's bookkeeper first ensured that it was approved, and then took the necessary steps to draw the funds from HUD. After the funds were wire-transferred from HUD to HACC's bank account, the bookkeeper cut a check payable to A-1. Adcock would then pick up that check and deposit it in the bank account that Justin had opened for A-1 (to which only Adcock had access). From April 1999 through March 2001, HACC paid A-1 $73,060; out of that total, Adcock paid Miller $27,500. The remaining $45,000 represented his profits from the deal, although he urges us to recall that he was performing some administrative functions for A-1 and thus some of that money was remunerative.

Near the end of 2000, all of HACC's contractors had to submit a certificate to the U.S. Department of Labor attesting that they were complying with all applicable regulations. Adcock prepared and signed each certificate on file for A-1; his forms did not reflect that he or any of his family members were involved with the contract. Instead, the forms continued the fiction that Miller was the owner of A-1. Miller never saw those forms.

In March 2001, the Board of Commissioners learned from some anonymous letters that Adcock was the true owner of A-1. The Board called him in to address both a double-billing issue and the alleged conflict during an executive session, but he denied having any financial interest in the business. Deere, by then Executive Director, instructed the bookkeeper to make future payments to "Naidean Miller Painting." Shortly thereafter, Adcock presented an invoice for $6,660, dated March 30, 2001, in the name of A-1 Maintenance. The bookkeeper processed the invoice, but as instructed she made the check payable to "Naidean Miller Painting." Knowing that Miller was in the building that day, she took it personally to Miller. Miller was surprised in every way: she knew nothing of the invoice, thought that the amount was very high, and refused to accept the check. Minutes later, Adcock picked up the check and asked Miller to come to his office. There he asked her if she would sign the check over to him, ...

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