United States v. Johnson

79 F.4th 684

UNITED STATES of America, Plaintiff-Appellee, v. Kenneth JOHNSON (21-3979); Garnell Jamison (21-4013), Defendants-Appellants.

Nos. 21-3979/4013

United States Court of Appeals, Sixth Circuit

Argued: December 7, 2022

Decided and Filed: August 18, 2023

Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:21-cr-00123—John R. Adams, District Judge.

ARGUED: Myron P. Watson, Cleveland, Ohio, for Appellant in 21-3979. David L. Doughten, Cleveland, Ohio, for Appellant in 21-4013. Matthew B. Kall, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee. ON BRIEF: Myron P. Watson, Gina A. Kuhlman, Cleveland, Ohio, for Appellant in 21-3979. David L. Doughten, Cleveland, Ohio, for Appellant in 21-4013. Matthew B. Kall, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee.

Before: SILER, GILMAN, and NALBANDIAN, Circuit Judges.

OPINION

NALBANDIAN, Circuit Judge.

Kenneth Johnson was the councilman in Cleveland's Buckeye-Shaker neighborhood, and Garnell Jamison was his executive assistant. For years, Johnson used his position to fraudulently claim federal reimbursements for payments he never made. He also secured employment for his children in federally funded programs, even though they were not legally eligible to work in such positions. And Johnson deposited their earnings into his own account. In addition, Johnson fraudulently claimed a series of tax deductions. He also encouraged and assisted his son Elijah in submitting falsified records for Elijah's grand-jury testimony. Garnell Jamison assisted Johnson in these crimes.

Johnson and Jamison were tried and convicted on 15 charges. Both now appeal their convictions and sentences, raising a number of issues. Because none of them has merit, we affirm.

I. BACKGROUND

Kenneth Johnson was an institution in Cleveland politics. A councilman for the Buckeye-Shaker Square neighborhood for 41 years, he held one of the longest tenures as a municipal leader in the country. But that career ended in 2021 when Johnson, along with his executive assistant and co-conspirator Garnell Jamison, was convicted on 15 charges in this case. Johnson was sentenced to 72 months in prison and three years of supervised release. Jamison was sentenced to 60 months' imprisonment and three years of supervised release.

A. The Fraud Schemes

The fraud charges against Johnson stemmed from two different fraud schemes: (1) collecting reimbursements from the City of Cleveland ("the City") employee Robert Fitzpatrick, and (2) accessing funds appropriated to a city-development corporation.

1. The Reimbursement Scheme

The City had a program that reimbursed councilmembers up to $1,200 per month for certain expenses associated with the wards they represented. To receive reimbursement, a councilman's actions had to benefit the ward—that is, to serve a "proper public purpose"—and not just the councilman personally.

From 2010 to 2018, Johnson claimed $1,200 in reimbursements every month. This began when Johnson approached Fitzpatrick to perform ward services. Fitzpatrick, who worked for the City in a recreation center, had a long history with both Johnson and Jamison. Johnson had mentored Fitzpatrick as a boy, and Fitzpatrick had even lived with Johnson. Fitzpatrick credited Johnson with his career advancement at the recreation center. Around 2010, Johnson offered Fitzpatrick a job.¹ Fitzpatrick would drive through Johnson's ward each day looking for properties that needed maintenance and report the locations of those properties to Jamison. Fitzpatrick never established what his payment would be but trusted that Johnson and Jamison would pay him.

Fitzpatrick performed these duties for about two months, filling out timesheets to keep track of his hours worked. But he was never paid. Eventually, Fitzpatrick stopped working. But he continued to fill out the timesheets, stating that he had performed ward services for Johnson. A receipt from Johnson's office stated that Fitzpatrick had received a $1,200 payment in cash. But Fitzpatrick testified that he never received the money. Even so, Jamison insisted that Fitzpatrick sign IRS Form 1099s that reported this monthly income. So Fitzpatrick's tax liabilities increased, even though he received no additional income.

Despite not paying Fitzpatrick, Johnson requested and received a $1,200 reimbursement from the City each month, matching the payment that he was supposedly making to Fitzpatrick. The Government alleged that Johnson received about $127,200 in reimbursements through this conduct. The FBI eventually contacted Fitzpatrick about these reimbursements, and Fitzpatrick initially did not testify truthfully. Johnson and Jamison instructed Fitzpatrick at different times not to speak to the authorities or to falsely tell them that Fitzpatrick was being paid $300 per week.

Based on this scheme, Johnson and Jamison were indicted and convicted on one count of conspiring to commit federal-program theft under 18 U.S.C. § 371 (Count 1) and three counts of federal-program theft under 18 U.S.C. §§ 666(a)(1)(A) and (2) (Counts 6-8).

2. The Buckeye-Shaker Square Development Scheme

The second scheme involved an entity known as the Buckeye Shaker Square Development Corporation ("BSSDC"), which administered services to residents in Johnson's ward under the direction of John Hopkins. Development corporations, including BSSDC, receive federal block-grant funding from the United States Department of Housing and Urban Development ("HUD"). These grants aim to revitalize low- to moderate-income neighborhoods.

Councilmembers can't just spend these funds however they want. Restrictions apply. In particular, councilmembers and their families cannot benefit financially from federal funds. And councilmembers must use the funds for specified purposes.

Johnson was aware of these restrictions. Still, he benefited from the federal funds—funds he described as "his money." (R. 112, Menesse Trans., Page ID 805; R. 112, Montagner-Hull Trans., 923.) To begin, BSSDC hired several of Johnson's adopted children to work in its programs. And BSSDC used the federal funds to pay for his sons' employment. In fact, Johnson's sons, as well as Jamison and Hopkins, were given bonuses even when other employees were not paid at all. In some cases, BSSDC paid the sons for work they hadn't done. But the benefits of nepotism for Johnson's sons were limited, since he often deposited their paychecks in his personal account.²

Johnson also repurposed funds in other ways. At Johnson's direction, BSSDC gave his son Kevin a house, ostensibly as a reward for housesitting and minor maintenance work. BSSDC also reimbursed Fitzpatrick for trips that he made with a youth sports team at the recreation center that he led.

BSSDC's bookkeeper, Joanne Montagner-Hull, informed Johnson that she could not seek reimbursement for Jamison and Johnson's sons through block-grant funds. And when Johnson and Jamison pressured her to seek the reimbursement, she resigned.

The shifting of funds ultimately led BSSDC to ruin. From 2015 to 2018, BSSDC failed to complete the financial audits required to receive federal block-grant funds and began to experience serious financial decline. Even worse, it lost access to all sources of funding.

Based on this scheme, Johnson was indicted and convicted on one count of conspiring to commit federal-program theft under 18 U.S.C. § 371 (Count 2) and three counts of federal-program theft under 18 U.S.C. §§ 666(a)(1)(A) and (2) (Counts 3-5).³

B. Tax Offenses

Johnson and Jamison were also convicted of filing false tax returns, in violation of 26 U.S.C. § 7206(2),⁴ as well as of failing to report income. As proof of this failure to report income, the Government pointed to the $1,200 checks that Johnson didn't give Fitzpatrick (but instead deposited in his own account) and the payments made out to his children (but instead deposited in his own account).

Johnson also fraudulently claimed a series of false tax deductions. These included charitable deductions based on donating two cars to the charity "Our Lady of the Wayside."⁵ He provided a tax preparer with documents that supported a deduction much higher than the amount the cars actually sold for.⁶ Employees of the charity later testified that the documents were fabricated.

And that's not all. Johnson claimed charitable donations to BSSDC based on funds that were loaned to BSSDC by Jamison. Johnson also claimed charitable deductions for items and services purportedly donated to a recreation center located within his ward. But strong evidence suggested that no such donations were made. Next, Johnson claimed deductions for unreimbursed work expenses. He claimed $14,400 in employee expenses per year from the money that he allegedly paid Fitzpatrick (and that the City had paid Johnson). And he claimed deductions for office rent and utilities for which he didn't pay.

C. Obstruction of Justice

Johnson and Jamison were also convicted on two counts of obstruction of justice: one for tampering with a witness in violation of 18 U.S.C. §§ 1512(b)(1) and (2), and another for falsifying records in a federal investigation in violation of 18 U.S.C. § 1519. Johnson and Jamison learned in September 2020 that Johnson's son Elijah, the manager and records custodian of the recreation center, had been subpoenaed to testify before a grand jury and to provide documents pertaining to donations.

Because of his own health struggles, Elijah had not kept full records of the recreation center. Elijah didn't have the records requested by the subpoena, so he contacted Johnson and Jamison for help. Elijah testified at trial that they prepared a dossier of receipts and documents showing that Johnson made each disputed donation to the recreation center. Elijah relied on their representations of the donations when signing and backdating receipts. Prior to his grand jury testimony, Elijah met with Jamison to discuss the documents....