ELR Citation: ELR 20298
No(s). 98-6609 et al (6th Cir. Oct 29, 2001)

The court affirms in part and reverses and remands in part a district court's sentencing of two individuals convicted for making materially false statements in violation of 18 U.S.C. §1001 by submitting reports containing falsified turbidity measurements to a state water district. Under 18 U.S.C. §1001, it is unlawful to make materially false statements in matters within the jurisdiction of the U.S. government. The court first holds that for purposes of prosecution under 18 U.S.C. §1001, the false statements made by one of the individuals came within the U.S. Environmental Protection Agency's (EPA's) jurisdiction under the Safe Drinking Water Act (SDWA). Although EPA's enforcement authority is secondary to the state's, its enforcement actions evince a federal interest in what reasonably must be considered an official function of EPA—ensuring safe drinking water for all persons. The court next holds that because the individual's statements influenced the course of an investigation, which still could result in an agency enforcement action, they were materially false for purposes of her prosecution under 18 U.S.C. §1001. The court then holds that the district court did not err in refusing to enhance the individuals' sentences under U.S. Sentencing Guidelines (USSG) §2Q1.3(b)(1) because their recordkeeping offense cannot be said to reflect an effort to conceal a substantive environmental offense under the SDWA or any other federal statute. The only substantive offense involved in this case was the violation of 18 U.S.C. §1001, and under either the USSG used by the district court or the one proposed by the government, the individuals' base offense level for this criminal conduct would be the same. However, the court holds that the district court did err by not enhancing the second individual's sentence under an abuse of trust provision. Customers of the water district placed a high degree of trust in the district to provide them with potable drinking water and granted the district substantial discretion as to how to provide such a service. The district in turn placed its trust in the second individual. Therefore, the quasi-fiduciary trust relationship between the district and its customers should be imputed to the second individual, and, thus, an abuse-of-trust enhancement is appropriate. On remand the court should correct the error. The court also holds that the district court correctly applied a special skill enhancement to the first individual's sentence because her training and experience in water treatment plant operation made it significantly easier for her to falsify turbidity readings and to conceal the falsifications from the regulators.

Counsel for Plaintiff
Ronald M. Spritzer
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Stewart B. Elliott
Law Offices of Stewart B. Elliott
111 Frederica St., Owensboro KY 42301
(270) 926-1396

Daughtrey, J. Before Keith and Gilman, JJ.