Appendix — Weaver v. United States

App. 1

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Nos. 00-15142 & 00-15751

D. C. Docket No. 99-00204-CR-J-21C

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

JUDY WEAVER,

Defendant-Appellant.

Appeals from the United States District Court

for the Middle District of Florida

(Filed December 18, 2001)

Before ANDERSON, Chief Judge, HULL and FAY,

Circuit Judges.

HULL, Circuit Judge:

The Court hereby vacates its prior opinion, filed

November 13, 2001, and substitutes this corrected opinion.

Defendant Judy Weaver appeals her conviction and

sentence for knowingly and willfully aiding and abetting

the failure of Flagler Career Institute to make refunds of

App. 2

student loans and Pell Grant funds, in violation of 20

U.S.C. § 1097(a) and 18 U.S.C. § 2. After review and oral

argument, we affirm.

I. BACKGROUND

This appeal primarily concerns the district court’s

denial of Weaver’s motion to withdraw her guilty plea.

We first review (a) Weaver’s plea agreement, (b) her

plea colloquy, and (c) the evidentiary hearing before the

district court.

A. Plea Agreement

For about 10 years, Judy Weaver was the Director of

Finance of Flagler Career Institute (“Flagler”), a proprie-

tary school." When students dropped out or withdrew,

Flagler was required to refund the proceeds of Pell Grants

and student loans guaranteed by the Department of

Education. Weaver’s duties included writing those refund

checks. On July 14, 1999, the government filed a one-count

information charging that, beginning in early 1996 and

continuing through February 1998, Weaver “did know-

ingly and willfully aid and abet Flagler’s failure to make

refunds on behalf of approximately 165 students in the

amount of more than $120,000 but less than $200,000,” in

violation of 20 U.S.C. § 1097(a) and 18 U.S.C. § 2.

Weaver entered into a plea agreement (“Agreement”)

wherein she acknowledged understanding the nature and

* Flagler was a wholly-owned subsidiary of Wangberg Enterprises,

Inc., a corporation owned solely by Louis Wangberg.

App. 3

elements of her offense. The Agreement listed these

elements as (1) “[t]hat the defendant failed to refund

student loans insured by the Department of Education and

Pell Grant funds provided by the Department of Educa-

tion,” and (2) “[t]hat the defendant did so knowingly and

willfully.”’ In her Agreement, Weaver also admitted that

she was “in fact guilty” and these facts:

Flagler ..., a proprietary school in Jackson-

ville, Florida, which closed in February 1998, of-

fered associate degrees to its students in various

medical related programs. Flagler was eligible

for and participated in the Title IV Federal Stu-

dent Financial Assistant Programs which pro-

vide various types of grants and loans to eligible

schools. The loans are insured or guaranteed by

the Department of Education and the grants are

provided by the Department of Education. Par-

ticipating schools are required to make a refund

within 30 days after the student withdraws; the

ending of a quarter or semester or trimester; or

the date the institution determines that the stu-

dent withdraws, whichever is earliest. The school

is responsible for making student refunds in ac-

cordance with the distribution formula set forth

under 34 C.F.R. 668.22. Schools participating in

the federal student financial assistance programs

must document student attendance, properly cal-

culate refunds for students who drop out of or

withdraw from school, and promptly refund the

amount to the Department of Education or the

appropriate lender.

* Although the Agreement did not list “aiding and abetting” in this

section, “aiding and abetting” was covered during the Rule 11 colloquy.

App. 4

The defendant was employed as Flagler’s

Director of Finance from Fall 1989 until the

school closed in February 1998. As Director of

Finance, the defendant helped develop corporate \

strategies, policies, and budgets. Beginning in

about 1991, she was responsible for writing the

checks for Flagler, including refund checks. The

defendant worked at various offices including

Lighthouse Point, Florida, but her duties in-

cluded handling refund issues for the Jackson-

ville-based Flagler.

When a student dropped out of or withdrew

from Flagler, a drop computation form was pre-

pared at the school and sent to the defendant

with the amount of the refund due. Refund re-

quest packets were sent from Flagler in Jackson-

ville to the defendant weekly. The defendant

reviewed the paperwork and changed the refund

amount if she came up with a different calcula-

tion than the school’s calculation. The defendant

then sent the packet back to Jacksonville so the

school could make the calculation changes and

return the packet back to the defendant.

The defendant sent monthly accounts pay-

able reports to Mr. Wangberg, which included

the aggregate amount of the student refunds

due. The defendant also spoke with Mr. Wang-

berg via telephone a number of times per month

and discussed with him, among other things, the

refund issue and Flagler’s need to make refund

payments. Mr. Wangberg was aware of the re-

fund problem but he did not consider making re-

funds a priority.

In or about February 1997, Mr. Wangberg

himself took over as the School Director of

Flagler. As noted above, Mr. Wangberg was well

Fl a a areal

App. 5

aware that Flagler owed a substantial amount of

refund monies. When Mr. Wangberg ran the

school, he took complete control of the funds and

the defendant could not write any checks without

his approval. During Mr. Wangberg’s tenure as

School Director, the amount of refund payments

due continued to grow.

Mr. Wangberg and the defendant both knew

that Flagler owed refunds and that they had a

requirement to make the refunds. From in or

about early 1996, Flagler, including Wangberg

and the defendant, failed to refund student loans

guaranteed by the Department of Education and

Pell Grants provided by the Department of Edu-

cation in the amount of more than $120,000 but

less than $200,000, on behalf of approximately

165 students. To date, these refunds have not

been made.

B. Rule 11 Colloquy

On August 16, 1999, the magistrate judge reviewed

the elements of her offense with Weaver as part of both

her waiver of indictment and plea colloquy. Weaver had no

questions about them, had read and understood “every

page and every word” of her Agreement, and knew “every

word and every provision” was binding on her. The judge

questioned Weaver: (1) whether she was pleading guilty

because she was “in fact guilty”; (2) whether she commit-

ted the act charged in the information; (3) whether she

understood that her guilty plea admitted the truth of the

charge; and (4) whether she understood what she was

doing by pleading guilty. Weaver responded affirmatively

each time.

App. 6

During the Rule 11 colloquy, the prosecutor read the

above facts from the Agreement and Weaver agreed with

them. Weaver also responded affirmatively to these

questions:

THE COURT: ... Did you from in or about

early 1996 to in or about Febru-

ary 1998 at Jacksonville in the

Middle District of Florida and

elsewhere aid and abet Louis

Weinberg [sic] in Flagler’s fail-

ure to make refunds of student

loans and Pell grant funds?

DEFENDANT: Yes, sir.

THE COURT: Were the Pell grant [sic] funds

provided by the Department of

Education?

DEFENDANT: Yes, sir.

THE COURT: Did you knowingly and willfully

aid and abet Louis Weinberg

[sic] in Flagler’s failure to make

P these refunds?

DEFENDANT: Yes, sir.

The magistrate judge found that a factual basis existed for

Weaver’s plea, that those facts stated the elements of the

offense, and that Weaver’s guilty plea was freely, voluntar-

ily, knowingly, and intelligently made. Weaver agreed

with these findings and indicated her satisfaction with her

attorney. The magistrate judge then issued a Report and

Recommendation outlining these findings. Weaver did not

object.

App. 7

Thereafter, on September 8, the district court ac-

cepted Weaver’s guilty plea, adjudged Weaver guilty, and

set sentencing for December 2, 1999. The court later

rescheduled it to February 3, 2000. During the interim,

Weaver replaced her attorney, Mark Perry, with her

current attorney, Curtis Fallgatter. The court continued

sentencing to June 15, 2000.

C. Evidentiary Hearing on Motion to Withdraw

On May 31, 2000, Weaver moved to withdraw her

guilty plea. Weaver’s motion asserted that (1) she was

under the mistaken impression that the crime to which

she pled guilty was a strict liability crime, (2) she was

misinformed as to the elements of the crime charged, (3)

the facts outlined in the Agreement did not constitute the

crime charged, (4) she was misinformed as to the testi-

mony of key witnesses, (5) the Agreement had an internal

inconsistency, and (6) she was innocent. During an

evidentiary hearing on Weaver’s motion, the district court

heard testimony from both Weaver and Perry.

1. Weaver’s Testimony’

Weaver testified that she understood the govern-

ment’s witnesses were “going to criminally implicate me”

and “basically say it was my fault that the refunds were

not paid,” but later learned they were supporting her

position that a crime had never been committed. At the

time of her plea, Weaver had understood “that I simply

> Weaver also had filed an affidavit with her motion to withdraw. .

Her hearing testimony essentially covers her affidavit testimony.

App. 8

had to have knowledge that the refunds ... were due and

not paid — and that that made me guilty of a crime.”

Regarding the factual statement in her Agreement

identifying Weaver as “helpling to] develop corporate

strategies, policies, and budgets,” Weaver did not under-

stand this statement to mean that she was involved in

developing a strategy for refunds. According to Weaver,

Wangberg established the priorities for refund payments

before she came to work for Flagler. Weaver’s understand-

ing of the mens rea required to violate § 1097(a) was as

follows:

At that time I fully understood that the willful

issue was the fact, simply the fact that I had to

have knowledge that the refunds were due and

not paid and that made me guilty. That was it,

that the government did not have to prove intent.

Weaver indicated that her attorney “did some research

with case law” and said “there was no real case law and

that the Bates case was the case law on this matter.” This

reference was to the Supreme Court’s decision in Bates v.

United States, 522 U.S. 23, 33 (1997), which held that a

specific intent to defraud the government is not an

essential element of criminal misapplication under §

1097(a).

In response to the court’s questions, Weaver elabo-

rated that she believed “the intent of never paying the

refunds back” was a necessary element of a § 1097(a)

violation, and that she never had this intent. Weaver

explained that “nobody ever even conceived that not

paying refunds was a crime.” Weaver further indicated

that “[mly whole reason for withdrawing the plea is that

App. 9

had I known and understood the facts and the law in

August of ‘99, I would have never said I was guilty.”

Weaver had not seen the pattern jury instructions

defining “knowingly” and “willfully” until Fallgatter

reviewed them with her. When she entered her plea,

Weaver did not know that the definition of “willfulness”

meant “that the act was committed voluntarily and

purposefully, with the specific intent to do something the

law forbids, that is with bad purpose, either to disobey or

disregard the law.”

Weaver testified that the loan funds were not used for

any personal use by either her or Louis Wangberg, as

follows:

A. [sic] Did any of them get diverted by you for

some personal use of yours or some com-

pany or bought a house or a car or some

personal use?

A. No.

Q. To your knowledge did that get diverted to

Mr. Wangberg for his personal use, cars or

houses or entertainment or anything other

than school business?

A. No.

Q. Did you exercise any control or dominion

over those funds so they could be used for

someone’s benefit other than paying school

bills?

A. No. I had no authority. Dr. Wangberg was

responsible for setting the priorities, and in

the last year of the school establishing all

approvals for all disbursements.

App. 10

During cross-examination, Weaver admitted that

(1) she understood a regulation existed which required

Flagler to refund student loans on a timely basis, (2) she

understood that rules existed which indicated how to

make the refunds, and (3) she discussed these rules with

Wangberg. Weaver further acknowledged that around

June 1996 she, along with Roth and Wangberg, made a

collective decision to bring the refunds current. Weaver

sent refund checks to the school to have them held there

and not mailed out until the cash was received in the

bank. Weaver testified that “we did that with other bills

too.” She acknowledged that the checks “were cut” and

“entered into the books as having been paid,” and that to

the auditors, it would have appeared that the refunds had

been made. Weaver further testified that “[w]e had signed

a letter to our auditor stating that our refunds were

current” when they were not, that when she wrote the

checks “we considered them paid,” and that the checks

were going to sit in a drawer “(flor a very short time until

we got the money in the bank.”

Weaver acknowledged her signatory authority over

Flagler’s operating account, that the operating account

was the account from which refunds were paid, and that

when refunds were made she would process them. Weaver

denied, however, that she was the one who signed the

checks, stating that she only “processed them and sent

them to the school.”

Weaver met with Perry more than five times and was

provided a draft of a plea agreement in 98 and another

one in March of ’99. She reviewed the plea agreement

“exhaustively” with Perry and her husband. Perry ex-

plained to her that the government’s position was “that I

simply had to have knowledge that the refunds were due

App. 11

and not paid, period,” and that the government had no

burden to prove “intent to defraud.” Perry did not discuss

what “knowingly” and “willfully” meant, but advised her

that the government’s position was that “they did not have

to prove intent” and that Weaver “simply had to know that

refunds were due and not paid.”

2. “Perry’s Testimony

On direct examination, Perry testified as to the truth

and accuracy of his affidavit. Perry’s affidavit stated that

Bates and § 1097(a) “was [sic] the only case or law ad-

dressing the issue of intent that fhe] discussed with

[Weaver].” Perry’s affidavit also indicated that the terms

“willfully” and “aid and abet” were not defined in the

Agreement or during the Rule 11 hearing and that Weaver

“could easily have been confused regarding whether or not

her conduct was such as to satisfy the element of willful-

ness under [the] statute.”

On cross-examination, however, when asked about his

affidavit statement that Weaver “could easily have been

confused,” Perry testified that he did not prepare the

affidavit, that he “did not put any of the words in fit],” that

“[s]he did understand,” and that “she didn’t indicate to me

in anyway [sic] that she was confused.” Perry’s testimony

on cross-examination also contradicted Weaver's assertion

that Perry believed that § 1097(a) was a strict liability

crime. Specifically, Perry stated that after reading Bates

he understood that “you still had to establish that [the

failure to refund was] willful and voluntary and a knowing

violation of the law . . . [b]ut you did not have to establish,

upon reading that case, that [Weaver] had a fraudulent

intent.”

App. 12

Perry also testified that in his representation of

Weaver he was “convinced” that she knowingly failed to

make refunds, that Weaver told him that she participated

with Wangberg in decisions involving the refunds, and

that Weaver told him that she wrote checks for refunds,

kept them in a drawer, and the books showed that the

checks had been written.*

Perry further testified that Weaver told him that she

paid herself a bonus and that he and Weaver discussed the

implications of this in deciding whether to plead guilty.’

Perry’s understanding was that Weaver “paid herself and

she may have paid Mr. Wangberg a bonus based upon

funds that were in the account and the refunds had not

been paid.” Perry gave the Bates decision to Weaver,

discussed it with her, and thought she had a full under-

standing of criminal intent. Weaver made no indication

that she did not understand the elements of the offense.

Perry admitted, however, that he couldn’t say that he

“pulled out the pattern jury instructions and went through

willfully and knowingly [with Weaver].”°

* On redirect, Perry was asked, “Would it be a surprise to you if

indeed the facts were that all the checks were sent to the school and

- maintained by the Director, and that if it was in a drawer, it was in a

drawer at the school, not in [Weaver’s] personal drawer ... ?” In

response, Perry testified that it was his understanding the checks were

kept in Weaver’s drawer.

* On redirect, Perry testified that the bonus was “[iJn the

thousands” but that he could not remember the exact amount.

* The district court also heard testimony from George Wisnovsky, a

private investigator who testified as to the accuracy of his two affidavits

recounting what Charles Roth, Flagler’s Executive Director, and Joyce

Byrd, Flagler’s Director of Administration and Financial Aid, had told

(Continued on following page)

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App. 13

D. Order Denying Motion to Withdraw

On September 22, 2000, the district court denied

Weaver’s motion to withdraw. The district court found (1)

that Weaver was not misinformed as to what the words

“knowingly” and “willfully” meant, (2) that there was no

evidence of misrepresentation by the government as to any

witnesses, (3) that any “inconsistency” in the Agreement

was adequately addressed during the Rule 11 colloquy,

and (4) that Weaver’s assertion of innocence alone did not

entitle Weaver to withdraw her plea. Although during

closing arguments Weaver’s counsel had argued that

conversion of the loan proceeds for Weaver’s own use or

benefit of another was also a required element of a §

1097(a) violation, the district court did not expressly

address that issue.

The district court ultimately sentenced Weaver to four

months’ imprisonment and four months’ home detention.

him during interviews. Although the district court admitted Wis-

novsky’s affidavits into evidence, it ultimately decided not to consider

this hearsay testimony because Roth and Byrd did not sign affidavits

and did not testify during the hearing. The district court also found the

statements unreliable based on other testimony during the hearing.

Contrary to Weaver’s contentions, the district court did not err in not

considering Wisnovsky’s testimony and affidavits about what Roth and

Byrd had told him.

Michelle Frigola, Flagler’s corporate counsel, also testified as to the

accuracy of her affidavit. This affidavit, along with her testimony,

revealed Frigola’s opinion that Weaver was innocent. Frigola also

testified about the process by which she prepared her affidavit and her

general knowledge about Flagler’s failure to make refunds. Frigola’s

testimony revealed that she knew little about the refund issue, in part,

because her legal representation of Flagler was limited to reviewing

leases, reviewing contracts, and pursuing payment from students who

failed to pay tuition.

App. 14

Weaver timely appealed both the denial of her motion to

withdraw and her sentence.’

II. DISCUSSION

A. Rule 32(e): Motion to Withdraw

Weaver filed her motion to withdraw her plea pursu-

ant to Federal Rule of Criminal Procedure 32(e), which

provides that “[i]f.a motion to withdraw a plea of guilty...

is made before sentence is imposed, ... the court may

permit the plea to be withdrawn if the defendant shows

any fair and just reason.” Fed.R.Crim.P. 32(e).* The factors

to be considered in evaluating whether a guilty plea may

be withdrawn include the following: “(1) whether close

assistance of counsel was available; (2) whether the plea

was knowing and voluntary; (3) whether judicial resources

would be conserved; and (4) whether the government

would be prejudiced if the defendant were allowed to

withdraw his plea.” United States v. Buckles, 843 F.2d 469,

471 (11th Cir. 1988) (internal citation omitted).

" On September 29, 2000, Weaver timely filed a Notice of Appeal

from the district court’s order denying her motion to withdraw. On

October 20, 2000, Weaver timely filed a Notice of Appeal from her

sentence. This Court consolidated Weaver’s appeals.

* Although this portion of Fed.R.Crim.P. 32(e) “is to be liberally

construed ... [, i]t is well settled ... that there is no absolute right to

withdraw a guilty plea prior to imposition of a sentence.” United States

v. Buckles, 843 F.2d 469, 471 (11th Cir. 1988). Instead, “[t]he decision to

allow withdrawal is left to the sound discretion of the trial court.” Id.

The district court’s denial of Weaver’s pre-sentencing motion to

withdraw is reviewed for an abuse of discretion and will not be reversed

unless the court’s decision is “arbitrary or unreasonable.” Id.

Salsa SPI

App. 15

Weaver contends, inter alia, that her plea was not

knowing or voluntary because (1) conversion is an essential

element of her § 1097(a) violation, and (2) she was not

advised about the conversion element before entering her

plea.” Section 1097(a) provides that “[aJny person who

knowingly and willfully embezzles, misapplies, steals,

obtains by fraud, false statement, or forgery, or fails

to refund” financial aid funds provided or insured by the

federal government is subject to criminal liability.

20 U.S.C. § 1097(a) (emphasis added). A 1992 amend

ment added “or fails to refund” to § 1097(a).” This Court

previously concluded that conversion is an element of

criminal misapplication under § 1097(a). See United States

v. Kammer, 1 F.3d 1161 (11th Cir. 1993). In this case,-

however, Weaver was charged with only “fails to refund”

|

* On appeal, Weaver also claims that the district court erred in

denying her motion because (1) she misunderstood the elements of

“knowingly,” “willfully,” and “aiding and abetting,” (2) she was

innocent, (3) the government misrepresented the strength of its case to

Weaver during plea negotiations, (4) the government failed to carry its

burden of establishing that prejudice would result if Weaver were

allowed to withdraw her plea, and (5) the factual basis for her plea

failed to show that she acted “knowingly” and “willfully,” or that she

“aided and abetted” Flagler’s failure to make refunds. After review and

oral argument, we conclude that these claims lack merit and do not

warrant further discussion. Because we conclude conversion is not an

element of Weaver’s offense, we need not reach Weaver’s claim that the

factual basis for her plea failed to show a conversion.

° Weaver was charged with aiding and abetting a § 1097(a)

violation under 18 U.S.C. § 2, which provides that “[w]hoever commits

an offense against the United States or aids, abets, counsels, com-

mands, induces or procures its commission, is punishable as a

principal.” Because § 1097(a) is the underlying substantive crime, we

focus primarily on § 1097(a).

App. 16

and not criminal misapplication. Thus, her appeal pre-

sents the issue of whether “fails to refund” is an independ-

ent ground upon which criminal liability attaches under §

1097(a), and, if so, whether conversion is an element for

that separate crime. To answer these issues, we review

relevant precedent and then the 1992 amendment to §

1097(a).”

B. Misapplication Under § 1097(a)

Our circuit’s principal decision discussing § 1097(a) is

United States v. Kammer, 1 F.3d 1161 (11th Cir. 1993).

The indictment charged Kammer with “embezzling,

misapplying, and stealing” federal financial aid funds in

violation of 20 U.S.C. § 1097(a) and 18 U.S.C. § 2.”

Kammer, 1 F.3d at 1163. Reversing Kammer’s misapplica-

tion convictions, this Court concluded that “[t]o establish a

criminal misapplication {under § 1097(a)] the government

must prove (1) a conversion of the property to the use of

the defendant or a third party, and (2) fraudulent intent.”

saa Id. at 1165. We defined conversion as “‘an act of dominion

or control over the property that seriously interferes with

the owner’s rights.’” Jd. (quoting United States v. Jakeway,

783 F. Supp. 590, 597 (M.D. Fla. 1992)).

This Court determined that the government’s evi-

dence did not show either a conversion or an intent to

“ Whether conversion is a required element for a § 1097(a)

violation is a question of law subject to de novo review. See United

States v. Gray, 206 F.3d 1267, 1271 (11th Cir. 2001).

“ Kammer was indicted in 1991, before the 1992 amendment

which added “or fails to refund” to § 1097(a).

en a

”

3

3

4

Z

App. 17

defraud. Jd. at 1165-66. Kammer owned a school whose

financial condition deteriorated; Kammer failed to refund

loan payments and the withdrawn students’ files con-

tained copies of non-negotiated refund checks. Jd. at

1162-63. Kammer explained that she was “aging debts,”

including refunds, so that “the most necessary and

immediate debts” could be paid first. Jd. at 1163. These

included Kammer’s “salary, campus renovations, consult-

ing fees, loan repayment to her husband, and her private

housekeeper.” Jd. at n. 5.

Because federal regulations allowed the school to

“commingle” its own money with federal financial aid

funds, this Court concluded that “[t]he fact that [the

school] may have paid operating expenses before a student

withdrew, and thus did not have money to refund [the

Department of Education] is not a conversion.” Jd. at

1166. The fact that Kammer may have paid other operat-

ing expenses before making the refunds also did not

establish a conversion because “[w]hat happened in this

case is exactly what the program anticipated: a commin-

gling of funds with grant funds being used for operating

expenses.” Id. This Court concluded that “[u]nder these

circumstances, we cannot find that the government

” Specifically, the school was allowed to deposit Pell Grant funds

and student loans into its corporate operating account. Kammer, 1 F.3d

at 1165. The school paid its debts, operating expenses, and refunds for

withdrawn students out of its corporate account. Jd. Given this

permissible procedure, this Court noted that “when a student withdrew,

[the school] may not have had sufficient funds in its operating account

to reimburse [the Department of Education] because it had expended

monies for other obligations. After all, [the school] could not control the

timing of a student’s withdrawal.” Jd. at 1166.

App. 18

intended to maintain supervision and control over the

funds after the point of the commingling of the funds.” Jd.

In addition, this Court held that “the government has not

demonstrated that Kammer had the requisite intent to

defraud the government.” Jd. We stressed, however, that

“we do not hold that a failure to refund federal monies will

never constitute a crime.... We reverse in this case

strictly on the facts of this case.” Id.

After our Kammer decision, the Supreme Court

decided Bates v. United States, 522 U.S. 23 (1997). As we

now explain, Kammer’s conclusions about conversion

survive Bates but its holding regarding intent to defraud

does not.”

Similar to Kammer, the indictment in Bates charged a

school’s officer with “‘knowingly and willfully misap-

plyling]’” federally insured student loan funds in violation

of § 1097(a) and 18 U.S.C. § 2.” Id. at 28. The defendant

had “initiated a pattern and practice of not making

refunds,” permitted management fee and salary payments

to take priority over refunds, instructed others to not

make refunds, and failed to make the required refunds.”

“ The Supreme Court had granted certiorari in Bates to resolve the

conflict between the Seventh Circuit’s Bates decision and our Kammer

decision regarding whether a specific intent to defraud was required for

the crime of misapplication under § 1097(a). Bates, 522 U.S. at 29.

* The defendant officer was indicted in 1994 based on his actions

during 1990.

* The management fees which took priority over refunds were

allegedly “‘upstreamjed]’” to Education America, Inc., of which the

defendant was vice president. Bates, 522 U.S. at 28.

App. 19

Id. at 27-28. The district court dismissed the indictment

for failure to allege intent to injure or defraud. Jd. at 28.

Reversing the dismissal, the Seventh Circuit concluded

that intent to defraud or injure the government is not an

element of criminal misapplication, which requires only

that “the defendant misapplied — i.e., converted — Title IV

funds and that he did so knowingly and willfully.” United

States v. Bates, 96 F.3d 964, 970 (7th Cir. 1996). Affirming

the Seventh Circuit, the Supreme Court held expressly

that the specific intent to injure or defraud the govern-

ment or another is not an element of the misapplication of

funds proscribed by § 1097(a). Bates, 522 U.S. at 29.

Although Bates did not address directly whether

conversion is an element of criminal misapplication under

§ 1097(a), such a conclusion is implicit in its holding that a

specific intent to defraud is not a required element of

criminal misapplication. Specifically, the Supreme Court

quoted and relied on the Seventh Circuit’s “working

definition” of willful misapplication under § 1097(a),

which, in essence, requires a conversion, as follows:

[Willful misapplication under § 1097(a) requires

the government to allege and prove that the de-

fendant consciously, voluntarily, and intention-

ally exercised unauthorized control or dominion

over federally provided or guaranteed Title IV

funds that interfered with the rights of the funds’

true owner(s), for the use and benefit of the de-

fendant or a third person, while knowing that

such an exercise or dominion over the funds was

a violation of the law.

Id. at 31 n. 7 (quoting United States v. Bates, 96 F.3d at

970). The Supreme Court relied on this “working defini-

tion” to refute the defendant’s argument that if intent to

App. 20

defraud is not an element, “innocent maladministration of

a business enterprise” or “unwise” use of funds, as the

defendant put it, would fall within criminal misapplication

under § 1097(a). Bates, 552 U.S. at 31. The Supreme Court

noted that the Seventh Circuit’s construction of criminal

misapplication under § 1097(a) reaches “only the trans-

gressor who intentionally exercises unauthorized domin-

ion over federally insured student loan funds for his own

benefit or for the benefit of a third party.” Jd. Thus,

_ Kammer’s determination that conversion is an element of

a § 1097(a) misapplication survives Bates even though its

intent-to-defraud holding does not.

C. “Fails to Refund” Under § 1097(a)

Although conversion remains an element of mis-

application under § 1097(a), the more difficult issue is

whether “fails to refund” is an independent ground upon

which criminal liability attaches under § 1097(a), and, if

so, whether conversion is an element of that offense as

well.

In 1992, Congress specifically added “or fails to

refund” to § 1097(a). See Higher Education Amendments

of 1992, Pub. L. 102-235, § 495, 106 Stat. 631. Signifi-

cantly, the act of failing to refund is listed separately from

the criminal act of misapplication and is connected by

“or.” There is no indication on the face of § 1097(a) that

Congress intended “misapplies” and “fails to refund” to be

” See Garcia v. United States, 469 U.S. 70, 73 (1984) (“Canons of

construction indicate that terms connected in the disjunctive in this

manner be given separate meanings.”).

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App. 21

the same thing or interchangeable. For example, Congress

did not amend § 1097(a) to provide criminal penalties for

“lajny person who knowingly and willfully ... misapplies

by failing to refund.” Furthermore, if this language does

not create a ground upon which criminal liability attaches,

separate from misapplication, then “or fails to refund”

would be mere surplusage. We decline to read § 1097(a) in

this way.” Instead, the text of § 1097(a) is clear and,

therefore, we conclude that “fails to refund” is an inde-

pendent activity which is criminalized under § 1097(a).

Despite the plain language of “or fails to refund” in §

1097(a), Weaver argues that the legislative history of the

1992 amendment supports the conclusion that “fails to

refund” is not a separate ground upon which criminal

liability attaches but is merely interchangeable with

misapplication. Weaver relies on a House Conference

Report which states that the “failure to pay refunds does

constitute criminal misapplication under current law.

Language is added in this bill merely as a clarification.”

* See Bailey v. United States, 516 U.S. 137, 145-46 (1995)

(disagreeing with the argument that a federal criminal statute which

prohibits both using and carrying a firearm should be read in a way

that would make the terms “use” and “carry” redundant, in part,

because “Congress has specified two types of conduct [which are

prohibited and] . . . [w]e assume that Congress used two terms because

it intended each term to have a particular, nonsuperfluous meaning”);

United States v. Canals-Jimenez, 943 F.2d 1284, 1286-87 (11th Cir.

1991) (concluding that the term “found in,” as used in a federal criminal

statute that imposes liability upon an alien who “enter(s),” “attempts to

enter,” or is “found in” the United States, “must have a different

meaning from ‘enters’ and ‘attempts to enter’” in part because “[a] basic

premise of statutory construction is that a statute is to be interpreted

so that no words shall be discarded as being meaningless, redundant, or

mere surplusage”).

App. 22

H.R. Conf. Rep. No. 102-630, at 513 (1992), reprinted in

1992 U.S.C.C.A.N. 334, 628. Weaver contends that “or

fails to refund” was added only to clarify that a misappli-

cation may encompass the failure to refund and that it is

not an independent ground for criminal liability.

We decline, however, to look beyond the plain lan-

guage of § 1097(a). In our circuit, “[w]hen the import of the

words Congress has used is clear, as it is here, we need not

resort to legislative history, and we certainly should not do

so to undermine the plain meaning of the statutory

language.” Harris v. Garner, 216 F.3d 970, 976 (11th Cir.

2000) (en banc); CBS Inc. v. PrimeTime 24 Joint Venture,

245 F.3d 1217, 1227 (11th Cir. 2001). In our circuit, there

is only “one recognized exception to the plain meaning rule

— absurdity of results.” CBS Inc., 245 F.3d at 1228; Merritt

v. Dillard Paper Co., 120 F.3d 1181, 1188 (11th Cir. 1997).

Applying our circuit’s precedent, we find no reason to

look beyond the plain language of § 1097(a). First, as

noted, the language of § 1097(a) is unambiguous: the

“knowing and willful” failure to make refunds is a criminal

act. Second, applying § 1097(a) according to its plain

language, and imposing criminal liability for the “knowing

and willful” failure to make refunds, does not lead

to “absurd” results. See United States v. Williams, 121

F.3d 615, 621 (llth Cir. 1997) (noting that the

“(clriminalization of the willful failure to pay is not new to

the criminal code; it appears frequently in the tax stat-

utes”).

Notwithstanding this recognized plain meaning rule,

judges sometimes have not resisted the temptation to set

out and discuss legislative history. See Harris, 216 F.3d at

&

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App. 23

976-79; United States v. Gilbert, 198 F.3d 1293, 1299 (11th

Cir. 1999). We equally succumb and point out that the

relevant legislative history is ambiguous here. Weaver's

interpretation is that the amendment clarified that

misapplication may encompass a failure to refund but did

not eliminate the conversion requirement for a misapplica-

tion, even when the conduct is the failure to refund.

Another interpretation, however, is that Congress recog-

nized that it had created a separate crime with its “or fails

to refund” language and added this legislative history to

foreclose the obvious post-amendment argument that

failure to refund only became a crime under § 1097(a)

after the 1992 amendment. More specifically, under this

interpretation, the legislative history only makes clear

that an individual who failed to refund could always have

been charged with criminal misapplication under the pre-

amendment § 1097(a), and that the addition of “fails to

refund” as a separate crime does not change this.” Even if,

as Weaver argues, the legislative history were clear and

!

* Although Kammer and Bates discussed this legislative history,

neither addressed it in this context. In Kammer, this Court noted the

legislative history as follows: “[t]he government submitted legislative

history on the Higher Education Act of 1965, indicating that ‘failure to

pay refunds does constitute crimmal misapplication under current law.’

Thus, Congress indicated that persons who failed to refund grant funds

to the government could be charged with criminal misapplication.” 1

F.3d at 1166 (internal citation omitted). As already discussed, the issue

in Kammer was whether the failure to make refunds was a criminal

misapplication under § 1097(a). Because Kammer was indicted for

“misapplication,” and not “fails to refund,” Kammer did not address

whether “or fails to refund” creates an independent ground of liability.

Similarly, the defendant in Bates was charged with criminal misappli-

cation, not “fails to refund,” and, thus, the Supreme Court also did not

address that issue. See Bates, 522 U.S. at 32.

App. 24

contrary, in our circuit we do not “give even clear legisla-

tive history more weight than clear statutory language.”

CBS Inc., 245 F.3d at 1227.

In any event, we decline to look beyond the plain

language of § 1097(a) and conclude that, according to its

plain language, “fails to refund” is an independent ground

upon which criminal liability attaches.

D. Elements of “Fails to Refund”

We next examine whether to engraft an element of

conversion onto the offense of “fails to refund” as courts

have done for a misapplication violation under § 1097(a).

For several reasons, we decline to do so.

First, it is well established that “we ordinarily resist

reading words or elements into-a statute that do not

appear on its face.” Bates, 522 U.S. at 29 (concluding that

the specific intent to defraud is not an element of the

crime of misapplication under § 1097(a), in part, because §

1097(a) does not state that the specific intent to defraud is

an element). Second, there is no basis upon which we can

conclude that Congress intended conversion to be an

element of the failure to refund federal financial aid funds

under § 1097(a). In contrast, the term “misapplies” implies

that a conversion must exist. The Supreme Court long ago

construed the language “willfully misapplies” in the

context of another federal criminal statute to require an

additional, unstated element of “a conversion to [the

defendant’s] own use or the use of some one else.” United

States v. Britton, 107 U.S. 665, 666-67 (1883). Thus,

because we “presume that Congress expects its statutes to

be read in conformity with thle] [Supreme] Court’s

precedents,” United States v. Wells, 519 U.S. 482, 495

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App. 25

(1997), there is at least some argument that Congress

intended conversion to be an element of misapplication

under § 1097(a) when it used the misapplication language.

Unlike “misapplies,” however, the term “fails to

refund” does not imply that a conversion must exist.

Weaver does not cite any precedent in which any court has

construed the language “fails to refund” in § 1097(a), or

similar language in other statutes, to demand a showing of

conversion. Thus, we have no reason to believe that

Congress intended conversion to be an additional, unex-

pressed element of the criminal act of “knowingly and

willfully” failing to refund federal financial aid funds.” As

such, we decline to read this element into § 1097(a).

E. Weaver’s Sentence

Weaver also appeals her sentence contending that the

district court erroneously determined the amount of loss.

We do not address that issue because Weaver knowingly

and voluntarily waived her right to appeal her sentence

except under certain circumstances not relevant to this

appeal.”

* Even Weaver seems to agree with this conclusion. More

specifically, Weaver states in her brief that “misapplication ... is a

term of art that ... means conversion.... The term ‘fails to refund’

carries no such inherent definition.”

” Specifically, the provision provides that Weaver had “expressly

waiveld] the right to appeal [her] sentence, directly or collaterally, on

any ground except for an upward departure by the sentencing judge or

a sentence above the statutory maximum or a sentence in violation of

the law apart from the sentencing guidelines.” We review de novo the

(Continued on following page)

App. 26

An appeal-of-sentence waiver provision is enforceable

if the waiver is made knowingly and voluntarily. United

States v. Bushert, 997 F.2d 1343, 1350-51 (11th Cir. 1993).

To establish the waiver’s validity, the government must

show either that (1) the district court specifically ques-

tioned the defendant about the provision during the plea

colloquy, or (2) it is manifestly clear from the record that

the defendant fully understood the significance of the

waiver. Jd. Here, the waiver provision was referenced

during Weaver’s Rule 11 plea colloquy and Weaver agreed

that she understood the provision aiid that she entered

into it freely and voluntarily. Thus, her waiver is valid.

The exceptions to her waiver do not apply because there

was no upward departure by the district court, her

sentence is not above the statutory maximum, and her

sentence does not violate the law apart from the sentenc-

ing guidelines.

IV. [sic] CONCLUSION

For the foregoing reasons, we conclude that the

district court did not err in accepting Weaver’s guilty plea

or in denying Weaver’s motion to withdraw her plea. We

further conclude that Weaver waived the right to appeal

her sentence except under certain circumstances not

validity of an appeal-of-sentence waiver provision. United States v.

Bushert, 997 F.2d 1343, 1352 (11th Cir. 1993).

App. 27

implicated by her appeal. Thus, we affirm Weaver's

conviction and sentence.

AFFIRMED.

App. 28

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 00-15142 & 00-15751

UNITED STATES OF AMERICA, ;

Plaintiff-Appellee, ,

versus |

JUDY WEAVER, |

| Defendant-Appellant. |

On Appeal from the United States District Court

for the Middle District of Florida

(Filed Feb. 26, 2002)

ON PETITION(S) FOR REHEARING AND PETITION(S)

FOR REHEARING EN BANC (Opinion

lith Cir, 19 _, __. F.2d __.

Before: ANDERSON, Chief Judge, HULL and FAY,

Circuit Judges. !

PER CURIAM:

The Petition(s) for Rehearing are DENIED and no Judge

in regular active service on the Court having requested

that the Court be polled on rehearing en banc (Rule 35,

App. 29

Federal Rules of Appellate Procedure), the Petition(s) for

Rehearing En Banc are DENIED.

ENTERED FOR THE COURT:

/s/ Frank M. Hull

UNITED STATES CIRCUIT JUDGE

App. 30

United States Court of Appeals

For the Eleventh Circuit

No. 00-15142 & 00-15751

District Court Docket No.

99-00204-CR-J-21C

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

JUDY WEAVER,

Defendant-Appellant.

Appeal from the United States District Court

for the Middle District of Florida

JUDGMENT

(Filed Dec. 18, 2001)

It is hereby ordered, adjudged, and decreed that the

attached opinion included herein by reference, is entered

as the judgment of this Court.

Entered: December 18, 2001

For the Court: Thomas K. Kahn, Clerk

By: McCombs, Elaine

(Issued Mar. 14, 2002)