USCA11 Case: 17-15721 Date Filed: 10/26/2020 Page: 1 of 47 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _____________________ No. 17-15721 ________________________ D.C. Docket No. 1:15-cr-00277-SCJ-JFK-2 UNITED STATES OF AMERICA, Plaintiff - Appellee, versus JUAN CARLOS BAZANTES, CESAR ARBELAEZ TABARES, Defendants - Appellants. ________________________ Appeals from the United States District Court for the Northern District of Georgia ________________________ (October 26, 2020) Before BRANCH, TJOFLAT, and ED CARNES, Circuit Judges. ED CARNES, Circuit Judge: USCA11 Case: 17-15721 Date Filed: 10/26/2020 Page: 2 of 47 Two men owned a company that was a second-tier subcontractor on a project to construct a building for a federal agency. They submitted to the agency certified payroll forms containing false, fictitious, and fraudulent statements and entries within the meaning of 18 U.S.C. § 1001(a)(3). That provision is part of the False Statements Act. The men were convicted of conspiring to violate, and of knowingly and willfully violating, the Act. This is their appeal. Given the elements of the crime, the facts of the case, and the contentions of the defendants, there are two primary questions about the validity of the convictions. One is whether the payroll forms containing the false statements were made or used in a matter within the jurisdiction of the federal agency. The other question is whether the false statements were material. If the answer to either question is no, the convictions must be reversed. If the answer to both questions is yes, the convictions must be affirmed. The answers are “yes” and “yes.” Arbelaez and Bazantes also challenge their sentences, questioning whether the district court in determining their guidelines ranges properly calculated the loss caused by their crimes. Because the answer to that question is “no,” their sentences must be vacated and their cases remanded for resentencing. I. THE FACTUAL, STATUTORY, AND REGULATORY BACKGROUND 2 USCA11 Case: 17-15721 Date Filed: 10/26/2020 Page: 3 of 47 Construing the evidence in the light most favorable to the verdict, as we are required to do, the facts are these. See United States v. Hansen, 262 F.3d 1217, 1236 (11th Cir. 2001). Cesar Arbelaez Tabares and Juan Carlos Bazantes founded, owned, and managed IWES Contractors, Inc., a drywall contracting company. It acted as a “labor broker,” providing skilled drywall installation workers to construction companies. One of the construction projects IWES provided workers for was a $63 million office building in Atlanta for the Centers for Disease Control and Prevention (CDC), a federal agency. The Beck Group was the prime contractor on that federal construction project. Beck contracted with Mulkey Enterprises as a first-tier subcontractor that would, among other things, install the drywall. And Mulkey hired IWES as a second-tier subcontractor to provide Mulkey with drywall workers for the job. So IWES was a subcontractor for Mulkey, Mulkey was a subcontractor for Beck, and Beck was the prime contractor for the CDC. A. The Statutory and Regulatory Background Federal construction projects are, of course, heavily regulated by a web of statutes and regulations. ...
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