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United States v. Webber

July 29, 2008

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
VICKIE L. WEBBER, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Western Division. No. 06 CR 50015-Philip G. Reinhard, Judge.

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

ARGUED NOVEMBER 2, 2007

Before EASTERBROOK, Chief Judge, and POSNER and RIPPLE, Circuit Judges.

Vickie L. Webber was charged with seven counts of making false statements to obtain federal employees' compensation benefits, in violation of 18 U.S.C. § 1920. A jury convicted her on all seven counts. The district court then sentenced Ms. Webber to five-months' imprisonment followed by three years of supervised release, the first five months of which are to be served under home confinement. The court also ordered Ms. Webber to pay $62,226.36 in restitution. Ms. Webber timely appeals her conviction and sentence.

For the reasons set forth in this opinion, we affirm Ms. Webber's conviction; we reverse that portion of the sentence requiring her to pay restitution in the amount of $62,226.36 and remand the case to the district court for further proceedings consistent with this opinion.*fn1

I. BACKGROUND

A. The Facts Presented at Trial and Ms. Webber's Conviction

Ms. Webber began working as a rural letter carrier for the United States Postal Service ("USPS") in 1986. In 2000, Ms. Webber submitted a claim for benefits under the Federal Employees' Compensation Act ("FECA"). Her claim for benefits was based on problems that she began having with her hands and wrists due to the repetitive nature of her mail sorting duties prior to beginning her mail route.

FECA provides compensation to federal employees for injuries sustained during the performance of their duties. Under FECA, federal employees who are totally disabled and have at least one dependent receive 75% of their federal salary. An employee is totally disabled if she has no capacity to earn any wages or work in any position. Partially disabled employees receive 75% of their federal salaries minus their wage-earning capacity. An employee is classified as partially disabled if she is unable to return to the position held at the time of the injury but nevertheless has limited ability to perform other work.

FECA claims are administered by the Office of Workers' Compensation Programs ("OWCP") in the Department of Labor. To receive FECA benefits, a disabled federal employee must submit a "Claim for Compensation," Form CA-7, for each period during which the employee seeks benefits. If OWCP determines that an employee is likely to remain disabled for a considerable period of time, OWCP places the person on the "periodic rolls." Such employees are relieved of the obligation to file CA-7 forms; however, they are required to submit Form 1032 on an annual basis. OWCP uses these forms to determine an employee's wage-earning capacity and the amount of benefits to which an employee is entitled, to reevaluate an employee's disability determination and to ascertain whether an employee would benefit from vocational rehabilitation counseling.

Form CA-7 contains the following question: "Have you worked outside your federal job during the period(s) claimed in Section 2? (Include salaried, self-employed, commissioned, volunteer, etc.)." R.94, Ex. 1. If an employee answers "yes" to this question, she is directed to provide additional information, such as the name and address of the business at which she was employed, the dates worked and the type of work performed.

Form 1032 contains the following questions: (1) "Did you work for any employer during the past 15 months?"; (2) "Were you self-employed or involved in any business enterprise in the past 15 months?"; and (3) "If you answered 'No' to both questions 1 and 2, state whether you were unemployed for all periods during the past 15 months?" R.94, Ex. 5. Again, an employee who answered questions (1) or (2) affirmatively is directed to provide supplemental information about where she worked and what type of work she did. Immediately preceding these questions is an instructions section, explaining in detail the type of work that triggers the reporting requirement. Two paragraphs in this instruction area explain:

Report ALL self-employment or involvement in business enterprises. These include but are not limited to: farming, sales work, operating a business, including a store or a restaurant. . . . Report activities such as keeping books and records, or managing and/or overseeing a business of any kind, including a family business. Even if your activities were part-time or intermittent, you must report them.

Report ANY work or ownership interest in any business enterprise, even if the business lost money or if profits or income were reinvested or paid to others. If you performed any duties in any business enterprise for which you were not paid, you must show as rate of pay what it would have cost the employer or organization to hire someone to perform the work or duties you did, even if your work was for yourself or a family member or relative. . . .

R.94, Ex. 5 at 1 (emphasis in original).

On December 14, 2000, OWCP accepted Ms. Webber's FECA claim regarding her condition of carpal-tunnel syndrome. OWCP paid Ms. Webber a total of $12,043.58 in FECA lost wages benefits from January 17, 2001 through June 8, 2001. During this period, Ms. Webber submitted to OWCP eleven CA-7 forms. On each of these eleven forms, Ms. Webber answered "no" to the question, "Have you worked outside your federal job during the period(s) claimed?" R.83 at 81-82. In June 2001, Ms. Webber's physician authorized her to return to work. The USPS gave her a limited duty assignment to accommodate her medical condition.

On June 5, 2002, Ms. Webber submitted another claim for FECA benefits. Ms. Webber stated that she had reflex sympathetic disorder, as well as carpal-tunnel syndrome; she further stated that she was unable to perform her duties without assistance due to extreme pain and limited ability to move her hands.*fn2 On November 18, 2002, OWCP again accepted Ms. Webber's claim and determined that she was totally disabled. OWCP paid Ms. Webber FECA lost wages benefits for the periods between June 10, 2002 and June 26, 2002 and between December 6, 2002 and the start of trial. Ms. Webber received a total of $127,986.78 in benefits. From January 25, 2003 through April 25, 2003, Ms. Webber submitted to OWCP four CA-7 forms, again answering "no" to the outside work question. R.94, Ex. 1-4. On April 20, OWCP placed her on the periodic rolls. Thereafter, Ms. Webber submitted to OWCP three 1032 forms; Ms. Webber answered "no" to questions (1) and (2) on each of those forms. R.94, Ex. 5-7.

On April 17, 2000, about seven months before the OWCP accepted her claim for FECA benefits for carpal-tunnel syndrome, Ms. Webber obtained a county business ownership certificate for a business known as Clearview Pond and Garden ("Clearview"). Clearview was a retail business that sold plants, pond supplies and Koi fish. The business was located on a rural, five-acre tract of land in Byron, Illinois, where Ms. Webber resided with her family. Ms. Webber also registered Clearview in her own name with the Illinois Department of Revenue and received a special-use permit from the Ogle County Zoning Commission authorizing her to conduct a business on her property.

In 2001, a fifty-foot-long greenhouse was constructed on Ms. Webber's property, which was used for Clearview's business operations. Plants with price tags were placed in three long rows running down the middle and sides of the greenhouse; plants with price tags also were placed on tables outside of the greenhouse. There was a cash register inside the greenhouse, and two large tubs of Koi fish were positioned outside.

On January 29, 2001, Ms. Webber submitted on behalf of Clearview an application to International Pond Supply, Inc. ("IPS"), in Sante Fe, New Mexico. The application was for a contract with IPS to purchase pond supplies at wholesale prices and then resell those products at retail prices. On April 2, 2001, Ms. Webber submitted an application to the Ogle County Zoning Commission requesting permission to erect signs for Clearview on two other properties in Byron, Illinois. A few months later, in June 2001, she purchased ten advertising spots for Clearview on WFEN radio in Rockford, Illinois. On July 2, 2003, Ms. Webber submitted to a corporation an application to be treated as a wholesaler. In that application, Ms. Webber stated that Clearview's sales for 2002 totaled $40,000 and projected that Clearview's total sales for 2003 would reach $50,000.

Ms. Webber had business cards stating that Clearview was open Tuesday through Saturday from 9:00 a.m. to 5:00 p.m. and Sunday from 9:00 a.m. to 4:00 p.m. The Government introduced evidence at trial showing that, during 2003 and 2004, Ms. Webber managed Clearview's finances. During the months of May, June and July of 2003, Ms. Webber wrote and signed all sixty-four checks drawn on Clearview's business account; she wrote and signed all but one of the fifty checks drawn on that account from April through October of 2004. Also during this period, Ms. Webber ordered a substantial portion of Clearview's plant and Koi fish inventory. IPS records indicate that Ms. Webber placed fourteen of seventeen orders made by the business in 2003 and 2004. Ms. Webber also placed several fish orders with another distributor during the same period.

In 2003, Ms. Webber met with Linda Rosquist, the owner of Goldigger Perennials, a plant wholesaler. During this meeting, Ms. Webber, Rosquist and Julie Keller, a Clear-view employee, discussed prebooking Clearview's plant order for the following year. Ms. Webber made the final decisions about which plants Clearview would order. Ms. Webber made seven trips to Arkansas in 2003 and 2004 to pick up plant and other inventory, as well as several trips to O'Hare airport in Chicago to pick up fish inventory.

In August 2003, USPS Injury Compensation Specialist Jim Johnson called Ms. Webber's telephone number and heard an answering machine greeting for Clearview. Johnson informed the USPS Inspection Service and, on August 25, 2003, Postal Inspector James Husarik went to Clearview.*fn3 Ms. Webber approached Inspector Husarik and asked if she could help him. He stated that he was interested in purchasing some plants for his yard. Ms. Webber walked with Inspector Husarik around Clearview, showed him various plants and answered his questions. Ms. Webber told Inspector Husarik, whom she believed was a customer, that she was usually at Clearview during its normal business hours and that she recently had hired a new employee named Julie Keller. Ms. Webber suggested that Inspector Husarik give her a diagram of his backyard so that she could help him with his landscaping. Once the Inspector agreed to purchase a plant, Ms. Webber picked up the plant, carried it to the cash register, rang up the sale, bagged the plant and handed it to him. He explained that he would return with his cousin, who knew more about plants.

On August 26, 2003, Inspector Husarik returned with Inspector Kurt Kamradt. Ms. Webber was not present. The Inspectors returned later in the day, and, this time, Ms. Webber and her husband, Tom Webber, were present. Inspector Husarik gave Ms. Webber the diagram that she had requested. Ms. Webber took the Inspectors around Clearview, and she suggested various plants. While she did so, Ms. Webber told the Inspectors that she handled the plant portion of the business and that her husband handled the ponds. Ms. Webber also stated that, in wintertime, she buys most of the plants that were sold at Clearview, starts them out as plugs in her basement and then transfers them to the greenhouse. She mentioned that she frequently traveled to Arkansas to pick up Koi fish. Ms. Webber and her husband collected the plants that the Inspectors had agreed to purchase and brought them back to the cash register. Ms. Webber rang up the sale.

On October 6, 2004, Postal Inspectors Eileen Roberts and Alvin Dvorak went to Clearview posing as husband and wife. Ms. Webber met with them and asked them to return with a diagram of their property. On October 14, Inspector Roberts returned, and Ms. Webber directed her to Keller, the employee Ms. Webber had hired.

On February 17, 2005, Inspectors Kamradt and Husarik returned to Clearview, identified themselves as Postal Inspectors and told Ms. Webber that they wanted to interview her about her injury compensation claim. Ms. Webber, who did not recognize the Inspectors from their previous undercover visits, initially told the Inspectors that she was unable to work at Clearview because of her condition and that her husband was the sole owner of Clearview. She explained that her husband ordered all of the plants and fish sold at Clearview, although she sometimes would offer her opinion as to which flowers he should purchase. The Inspectors told Ms. Webber that they thought she was being untruthful about her involvement in Clearview. As this point, Ms. Webber's husband, Tom Webber, walked into the room; the Inspectors asked him who owned Clearview. Tom said that Ms. Webber owned the business. Ms. Webber corrected him and told him that the business was in his name. The Inspectors asked Ms. Webber what Keller would say if they were to ask her about Ms. Webber's involvement in the business; she conceded that Keller probably would say that Ms. Webber was active in and ran the business.

At trial, Ms. Webber testified that she believed that she had answered accurately the questions on the CA-7 and 1032 forms. She stated that she had not considered her involvement in Clearview to be self-employment because no one would have paid her for her work there. Ms. Webber also testified that, prior to filling out the forms, she had called Jim Johnson and explained that she had a family business. According to Ms. Webber, Johnson asked her whether she received a wage, to which she answered, "no"; he told her "not to worry about it." R.87 at 851. Johnson denied ever saying this.

Ms. Webber testified about her physical condition. She explained that her pain medication made her drowsy and prevented her from doing much of anything. According to Ms. Webber, her friend, Julie Keller, volunteered to run the operation for her. Ms. Webber also testified that her boss at the Byron Post Office, Jeff Engestrom, and other USPS employees knew of the existence of Clearview and that she never had tried to conceal her involvement in, or the existence of, Clearview. Finally, Ms. Webber's daughter and two of her former neighbors testified that, from their personal observation, Ms. Webber was unable to perform any physical activity and was often confused as a result of her illness and medication.

A jury convicted her of seven counts of making false statements to obtain federal employees' compensation benefits in ...


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