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U.S. v. CATONE, JR., NO. 13-4663

Decided: October 15, 2014

The Fourth Circuit upheld Defendant’s (“Catone”) conviction for making a false statement in connection with his receipt of federal worker’s compensation benefits, but vacated his sentence and the restitution order, and remanded for further proceedings.

In 2006, Catone, a former United States Postal Service employee, began receiving payments under the Federal Employees Compensation Act based on injuries arising from extended periods of driving. To verify his continued eligibility for benefits, Catone was required to submit a form each year, which disclosed whether he had been employed, or earned any compensation, during the past fifteen months. From March 2007 to September 2009, Catone reported that he was unemployed for all periods and had not earned any compensation. Catone, however, had received $635 for custodial services. As a result, Catone was convicted by a jury for violating 18 U.S.C. § 1920. The district court sentenced Catone to a sixteen-month term of imprisonment, and imposed restitution in the amount of $106,411.83.

On appeal, Catone challenged his conviction, imprisonment, and the imposed restitution amount. First, Catone argued that the Government should have produced a form that he had submitted to the Department of Labor in March 2007, which disclosed the $ 635 compensation. Catone claimed that the Government’s failure to produce the form as part of discovery constituted a Brady violation. See Brady v. Maryland, 373 U.S. 83 (1963). Reviewing the claim for plain error, the Court rejected Catone’s argument because the material was known to Catone; the form was publicly available and could have been uncovered by Catone; and, because Catone was unable to show that had the form been disclosed, it would have likely changed the verdict.

The Court, however, citing 18 U.S.C. § 1920, did conclude that the imposition of Catone’s sixteenth months’ felony sentence violated his Sixth Amendment right to trial by jury. Section 1920 establishes two levels of sentencing depending on the amount of benefits “falsely obtained.” If the amount of loss does not exceed $1,000, the defendant may be convicted of a misdemeanor, but if the amount received is more than $1,000, the defendant may be convicted of a felony. Thus, the Court adopted the Eleventh Circuit’s interpretation of § 1920, and held that the amount of benefits falsely obtained constitutes a substantive element for a felony offense, which must be submitted to the jury and proven beyond a reasonable doubt. The Court further rejected the Government’s claim that the error was harmless. Rather, the Court concluded that the jury made no finding that the amount of benefits obtained exceeded $1,000, which would support a felony sentence. Accordingly, the Court vacated Catone’s felony conviction, and instructed the district court to impose a misdemeanor sentence on remand.

Finally, the Court held that the district court erred in calculating the loss amount for purposes of sentencing enhancement and restitution. The district court failed to use the correct formula, as established in United States v. Dawkins, 202 F.3d 711, 715 (4th Cir. 2000), when calculating the loss amount. Thus, the Court vacated the restitution order and remanded to the district court for calculation under the correct formula.

Full Opinion

Abigail Forrister