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explaining that the regulations require a plaintiff to raise his entire case "before either the MSPB or the EEOC, 'but not both'"
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Editorial Note:
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted, Feb. 11, 1997.
Appeal from the United States District Court for the Eastern District of California, David F. Levi, District Judge, Presiding.
Before HUG, THOMPSON, and KLEINFELD, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.
Aiello was convicted after trial by jury of 28 counts of various kinds of fraudulent conduct relating to a nursing care facility he operated. The district court sentenced Aiello to 135 months in prison and ordered him to make restitution of over $3 million.
Aiello argues that the court erroneously instructed the jury that the private company that paid him on behalf of Medicare and audited him was an agency of the government for purposes of one of the statutes he was convicted of violating. He argues that under United States v. Gaudin, the court should have submitted this question to the jury. In this argument, he is probably correct, and we assume that the instruction was erroneous for purposes of this decision.
See 18 U.S.C. § 287.
United States v. Gaudin, 515 U.S. 506, 522-23 (1995).
But Aiello did not object to the erroneous instruction. The error therefore was "forfeited" under United States v. Olano, and this court cannot take account of unless it "affect[ed] substantial rights" as Rule 52 requires. The error did not affect substantial rights, because Aiello had already conceded the point at issue. Aiello himself testified that he knew when he acted that Mutual of Omaha was acting as an intermediary on behalf of the federal government, and his attorney conceded that whether Mutual of Omaha was a federal intermediary was not at issue.
United States v. Olano, 507 U.S. 725, 733-35 (1993).
See United States v. Keys, 133 F.3d 1282, 1286-87 (9th Cir.1998).
Aiello next argues that the court improperly instructed the jury on the false statement crime by telling the jury that "a statement is material if it could have influenced the agency's decisions or activities." He claims no error in that statement. But the court also instructed that the government had to prove that "the statement was material to the defendant's activities or decisions" (emphasis added). He argues that the jurors might have been confused because the judge told them first that the government had to prove materiality to Aiello's decisions, then that "materiality" meant that it could have influenced the agency's decisions.
See 18 U.S.C. § 1001.
But again, Aiello did not object. He forfeited his chance to have this typographical error corrected when he did not bring it to the judge's attention. He has not demonstrated that any injustice would be done by letting the conviction stand despite this error, because the definition of "materiality" immediately following it was correct, and the facts allowed for no serious argument of immateriality. He submitted charges for people not treated, submitted expenses for his ranch as nursing home expenses, and even submitted a bill for care of a person after the body was shipped to the morgue. Bills were created with whiteout and fake invoice paper. Bills are sent to an agency in order to get it to pay money. Materiality of the falsehoods to the agency paying the bills was exceedingly unlikely to be the issue that might hang the jury up. Significantly, Aiello's defense was that his employee, Sharon Harris, who was stealing hundreds of thousands of dollars from Aiello, committed the fraud on the government on her own initiative and that Aiello was her stooge, receiving the unearned pile of money from which she stole.
See United States v. Keys, 133 F.3d 1282, 1286 (9th Cir.1998).
See United States v. Keys, 133 F.3d 1282, 1287 (9th Cir.1998).
Aiello argues that in the instruction relating to transportation of stolen money in interstate commerce, the court erroneously instructed that "it is not necessary to prove who stole the money." He concedes that ordinarily the government does not have to prove who stole the money in order to convict someone of transporting stolen money across state lines, but argues that in the factual circumstances here, it was confusing to tell the jury that, without further elaboration. Again, Aiello did not object, and if there is any error in this instruction, it was not (and is not) "plain" in the sense required to have us notice forfeited error.
See 18 U.S.C. § 2314.
See United States v. Turman, 122 F.3d 1167, 1170 (9th Cir.1997).
Aiello argues that the district court erred by instructing the jury that, regarding the "knowingly" element of two crimes, "[t]he government is not required to prove that the defendant knew his acts or omissions were unlawful." In the instruction on money laundering, the court told the jury correctly that the government had to prove that the defendant knew that the transaction involved criminally derived property. The money laundering instruction was, because of the inconsistency, perhaps erroneous under United States v. Stein. Yet again, Aiello did not object to it. The Stein error was not "plain," as defined in Turman.
United States v. Stein, 37 F.3d 1407 (9th Cir.1994).
See Turman, 122 F.3d at 1170.
Finally, Aiello argues that the restitution amount was excessive, because it did not take account of the money he was legitimately owed for medical care his nursing home provided. But Aiello was not owed any money at all; his corporation was. The court required Aiello, personally, to make restitution for what he stole, and did not credit him for what his victim owed to an independently cognizable legal person, his corporation. True, the government was permitted to disregard the corporation in recovering what he stole, but the equitable doctrine allowing the corporate veil to be pierced is always a sword for creditors, not a shield for the owner who has misused the corporate form. The distinction sometimes matters in fraud cases, because money owed to the corporation may, after bankruptcy, go to its trustee on behalf of its creditors, while a setoff would benefit the thief rather than the creditors.
See generally McLaren v. Plastic Indus., Inc., 97 F.3d 347, 358 (9th Cir.) ("Piercing the corporate veil is an equitable remedy that is resorted to where respecting the corporate form would work injustice."); Ellenburg v. Brockway, Inc., 763 F.2d 1091, 1097 (9th Cir.1985)(stating that doctrine of unclean hands "closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief").
Aiello has cited no case directly on point with his argument. Also, Aiello had a fair chance to prove how much money should be subtracted, and was unable to establish any concrete number for the offset. The district judge did not abuse his discretion in setting the amount of restitution without a deduction for the uncertain amount that the government might properly owe the corporation Aiello owned.
AFFIRMED.