Free Response - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona DANIEL R. DRAKE Assistant U.S. Attorney Arizona State Bar No. 003781 [email protected] Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone: (602) 514-7500

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America, CR-04-1018-PHX-JAT Plaintiff, v. Bella Ben-Henry, Defendant. The United States will respond to defendant's objections to the pre-sentence report in the GOVERNMENT'S RESPONSE TO DEFENDANT'S OBJECTIONS TO PRESENTENCE REPORT

15 order presented. 1. Objection 1, Page 5 - Paragraph 18. Defendant asserts that all modular units at issue 16 17 in paragraph 18 were on site. Paragraph 18 reflects that only one unit had been delivered to the 18 site prior to September 29, 1999. 19 Defendant's assertion is without foundation and is contradicted by the discovery in this 20 case. Defendant asserts the modular units were on site, but she provides no basis for her 21 knowledge of that fact. She had not visited any of the eight sites to make her own personal 22 inspection prior to submitting the payment request. She mentions a construction inspector by 23 the name of Bob Wilson who was supposed to inspect the work, but she offers no report from 24 him confirming the completion. More importantly, her assertion is contrary to the admitted 25 factual basis for her plea. She admitted on page 6, lines 27 and 28 of her plea agreement that 26 she knew the work called for under the contract had not been completed. Her assertion is also discredited by the discovery in this case. By letter dated August 16, 27 28 1999, Bob Wilson, the construction inspector on this project, asked Pat Chee Miller to provide

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1 a delivery schedule for the modular units (Discovery document #0638; herein after #0638). 2 (Copies of all documents referenced in this portion of the response are in Attachment 1.) Miller 3 responded four days later with a fax to Bella Ben-Henry, attention Robert Wilson, enclosing a 4 delivery schedule for the modular units (##0631-2). Miller's schedule showed that only one unit 5 was scheduled for delivery in the month of September. All remaining deliveries were 6 anticipated to occur in October and November. Later schedules confirm the failure to meet the 7 contract requirement in that no units were set up and ready for occupancy prior to September 30, 8 1999, let alone delivered to job site at the designated locations by that date (##0607 and 0609; 9 0608 and 0610). Only one unit had completed final inspection by February 28, 2000, according 10 to these schedules, and several units had not even been delivered. 11 Another document called defendant's attention to the fact the modular units were not

12 arriving in a timely fashion. On August 17, 1999, the Acting Director of the Fort Defiance 13 Agency, Department of Head-Start, advised defendant by memo that his office had been 14 receiving telephone calls from Ft. Defiance, Lower Greasewood, Houck, and Oak Spring 15 Chapter officials requesting specifics on the actual buildings and their delivery (#0095). 16 17 2. Objection 2, Page 6 - Paragraph 19. Defendant contends she was not the one who

18 asked co-defendant Marianito for his signature on the payment "receiving requests." That, 19 however, is contrary to Marianito's description of events in his interview. Marianito specifically 20 said in interview that defendant was the one who brought the forms to him and explained that 21 the work had been done and that he should sign the form so the payments could be processed. 22 The discovery also shows that the false payment request submitted by defendant on

23 September 30, 1999, was not her first attempt to force a payment to now-deceased co-defendant 24 Pat Chee Miller. On August 24, 1999, based on two invoices from Miller (##0052 and 0861), 25 defendant submitted two payment or "receiving requests." (Copies of all documents first 26 referenced in this portion of the response are in Attachment 2.) The receiving requests, numbers 27 185715 (##0053 and 0060) and 185716 (##0051 and 0055), request payment of the second and 28
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1 third installments on account #99303. Under the contract terms, these payments were due only 2 when the factory units were 70% completed (the second payment) and when the units had 3 arrived at the job site/chapter (the third payment). Given Miller's August 20 schedule showing 4 delivery of the first unit set for September 13, and some units in November, there is no feasible 5 way all eight (8) of the units could have been on site by August 24, as required for the third 6 payment. Because of delays in processing his August 24 request, Miller sent defendant a letter 7 attaching cancelled checks on September 8, 1999 (#0092). He also sent two invoices to replace 8 the earlier invoices (##0047 and 0862). 9 By a September 10, 1999, memo to defendant, accounting supervisor Valerie M. Hubbard

10 returned the two receiving records for payments to PCM on account #99303 un-processed 11 (##0091, 0090, and 0089). Hubbard pointed out to defendant that this was a "construction 12 contract. Payments are based on completion of the job, not reimbursement of cost" the vendor 13 had paid. Hubbard also advised that for progress payments to be made, an application and 14 certification for payment must be submitted and bear a notarized signature of the contractor and 15 a certification by an architect­"your consultant" as Hubbard termed it parenthetically(#0091). 16 Defendant's signature would not be accepted, Hubbard explained. Hubbard marked the two 17 receiving records VOID when she returned them to defendant( ##0090 and 0089). 18 Ben-Henry then wrote Miller on September 15, 1999, to advise him of the rejection and

19 the form needed for payment, and that the form should be completed and signed by his company 20 and "certified by an architect (Benham Group) to process any payments." (#0617). She also 21 advised Miller that the contract ended on September 15, 1999, and therefore it was "important 22 to request for an extension of the contract period to end on September 28, 1999, in order to 23 complete the order of modular units." (#0617). Although defendant knew enough to advise 24 Miller the architect's certification should be obtained from Benham Group, she later signed off 25 on the payment request based on forms not approved by her consultant, Benham Group, but 26 instead approved by Fred Marianito and Ed Preston, who had nothing to do with this project 27 (##0850, 0851, and 0852). 28
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3. Objection 3, Page 7 - Paragraph 25. Defendant objects to a reported assertion by

2 the case agent that she asked Marianito for his signature because the architects of her division 3 would not sign off on the forms. If defendant is quibbling about whether she had any architects 4 in her division, that only goes to emphasize the irregularity of forms signed by Marianito and 5 Preston, not the Benham Group. At the outset, it was Marianito, not the agent, who said he 6 signed the form at defendant's request. Marianito freely acknowledged that he knew nothing 7 of the status of the project as his office had no oversight or any other responsibility with respect 8 to the project. Marianito explained that he relied upon his superior, defendant, for information 9 indicating the project was at the required stage of completion before signing the form. 10 11 4. Objection 4, Page 8 - Paragraph 33. This is the most difficult of the objections, in

12 that there are a wide range of figures available, depending on the method used to calculate loss 13 used. See Guideline Section 2B1.1, Application Notes 2 and 3, and Section 2F1.1, Application 14 Notes 8 through 11. The loss need not be determined with precision. The court need only make 15 a reasonable estimate of the loss, given the available information. 16 One method, perhaps most favorable to defendant, is the cost of completion or the

17 replacement cost. In other words, the measure of damages or loss would be the amount required 18 to complete the work called for in the contract when defendant falsely represented the contract 19 work was complete. No one has made such calculations, however. The party in the best position 20 to do so is the Navajo Nation, but it has not fixed such an amount. 21 A second method would be to use the amount at issue in the count of conviction. Count

22 Three pertains to a payment request for $102,430.50. Of course there were other documents 23 falsified and submitted on the September 29 and 30, and under Section 1B.1.3, Relevant 24 Conduct, the amount of the total overpayments could be used. That figure is closer $750,000, 25 and does not take into account work actually done. Nor could one reconstruct at this point the 26 relative progress on each the 17 modular units on September 29 and 30, 1999, especially since 27 many of the units were still on the factory assembly line. 28
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Still another method could include actual and consequential damages that were

2 reasonably foreseeable. Following the misconduct with respect to the two contracts involved 3 in the indictment in this case, as well as other federally financed contracts referred to in 4 paragraphs 11 through 16 of the Presentence Report, the Department of Health and Human 5 Services ("HHS") refused to fund additional child-care development projects for the Navajo 6 Nation until accounts could be straightened out on the contracts in question. Thus, when 7 defendant suggests "she did it for the children" she actually "did it to the children" by causing 8 them to go without funding for child care facilities that otherwise would have been available. 9 One final method is the amount of the offender's gain. However, here defendant received

10 none of the money wrongfully paid. Taken most charitably, she might have been trying to avoid 11 losing her job or facing the embarrassment of not spending all funds allocated during a given 12 period. Tribal resolutions recommending approval of the contracts required all funds to be 13 liquidated on or before September 15, 1999 (##0383-4, resolution paragraph 2), and set up a 14 schedule whereby the appropriate tribal committee could be briefed quarterly to ensure the funds 15 were liquidated and did not revert back to HHS (##0347-8, resolution paragraph 3). (Copies 16 of all documents first referenced in this portion of the response are in Attachment 3.) 17 Some of these measure of loss may overstate the seriousness of the conduct, and some

18 understate. Given all the above factors, the government believes the floor on the loss figure 19 should be at least $102,430.50, the amount of the payment request in Count 3. The loss is more 20 likely two or three times that amount, given the other documents falsified on September 29 and 21 30, 1999. 22 23 5. Objection, Page 8 - Paragraph 34. Defendant objects to the assessment of two levels

24 for "more than minimal planning." The objection is not well taken. As the Application Note 25 1(f) to Section 1B1.1 reflects, a single taking accomplished by a false entry would constitute 26 only minimal planning. On the other hand, several instances of taking money, each accompanies 27 by a false entries would constitute more than minimal planning. 28
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Here, defendant made repeated attempts to force payment on construction contracts which

2 she admittedly knew had not been completed. She started the process on August 24, 1999, with 3 the first requests for progress payments. When that failed, signatures had to be affixed to 4 multiple documents and justifying paperwork had to be obtained. Defendant knew that Benham 5 Group should have signed off as the architect, but instead requested signatures from architects 6 who had nothing to do with the project and had no knowledge of its status. Any auditor looking 7 at the false documents only would believe that the work was done and the funds properly 8 expended. Then, after the fact, she attempted to enter into a contract modification when the 9 payor's performance had been completed (#0601-2.) (Copies of all documents first referenced 10 in this portion of the response are in Attachment 4). She had no consideration to offer in support 11 of the belated "modification," and no way to enforce compliance. She is entitled to the two level 12 assessment for more than minimal planning. 13 14 6. Objection 6, Pages 8 and 13 - Paragraphs 37, 40 and 71. The government adopts

15 its previous response to objection 4. 16 17 7. Objection 7, Page 9 - Paragraph 43. Defendant's failure of recollection is not a

18 basis to discredit or disbelieve information obtained from fingerprint based computerized 19 records. 20 21 //// 22 //// 23 //// 24 25 26 27 28
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8. Objection 8, Page 10 - Paragraphs 46, 47 and 50. Again, defendant's failure of

2 recollection is not sufficient to discredit the fingerprint computerized records. 3 4 5 6 7 8 9 10 11 12 13 14 15 CERTIFICATE OF MAILING I hereby certify that on October 26, 2006, I electronically transmitted the attached /s/ Daniel R. Drake DANIEL R. DRAKE Assistant U.S. Attorney Respectfully submitted this 26th day of October, 2006. PAUL K. CHARLTON United States Attorney District of Arizona

16 document to the Clerk's Office using the ECF system for filing and transmittal of a Notice of 17 Electronic Filing to the following ECF registrants: 18 19 20 21 22 23 24 25 26 27 28
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Milagros Cisneros Assistant Federal Public Defender

_/s/Daniel R. Drake_ DANIEL R. DRAKE

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