## Facts

- The U.S. Army Corps of Engineers contracted with a private contractor to sandblast and paint locks and dams; after the contractor defaulted, sureties Thomas Rhoades and Stephen Schluneger assumed responsibility under a Takeover Agreement limiting reimbursement to “actual costs and expenses.”
- Before the Takeover Agreement was executed, Rhoades and Schluneger entered undisclosed side agreements drafted by attorney T. Robert Hughes that were designed to capture the difference between the contract balance and a lower completion bid from Skyline Painting, Inc.
- The side agreements used sham “finder” and “engineering consulting” fees (services not actually provided) that were included in submissions supporting payment by the Corps, resulting in government payments beyond actual completion costs.
- Funds flowed from the Corps to Rhoades, then to Skyline for work, and then, via agreed percentage payments, from Skyline to ARCO Business Services and to ARCO Properties (entities controlled by Hughes), which distributed money back to Rhoades and Schluneger; Hughes benefitted in part through discharge of a debt to Rhoades.
- After Skyline encountered financial problems and abandoned the project, ARCO Business Services sent a June 27, 1992 letter (prepared and signed by Hughes as trustee) stating it considered its contract canceled and requesting that position be conveyed to other involved parties.
- A federal grand jury charged Hughes and ARCO Properties (among others) with a single count of conspiracy to defraud the United States based on the billing scheme.

## Issues

1. Whether Hughes and ARCO Properties proved they withdrew from the conspiracy outside the five-year limitations period, thereby barring prosecution.
2. Whether the district court erred in permitting Hughes to represent himself at trial, including whether his waiver of counsel was knowing, voluntary, and intelligent.

## Decision

- The Tenth Circuit affirmed the convictions of Hughes and ARCO Properties.
- The court held the evidence did not compel a finding that Hughes or ARCO Properties withdrew from the conspiracy before the limitations period, despite a special verdict finding withdrawal by ARCO Business Services as of June 1992.
- The court held the district court did not commit reversible error by allowing Hughes to proceed pro se because the waiver of counsel was valid.

## Legal Principles

- Conspiracy is a continuing offense; a conspirator remains liable for acts in furtherance of the conspiracy until the conspiracy ends or the defendant withdraws.
- Once participation is shown, the defendant bears the burden to prove withdrawal through affirmative acts inconsistent with the conspiracy’s objectives, reasonably communicated to co-conspirators or authorities.
- A jury may find withdrawal by one conspirator or entity without being required to find withdrawal by related individuals or affiliated entities; fact-finders may distinguish roles and conduct.
- On sufficiency review of a denial of acquittal, appellate courts view the evidence in the light most favorable to the government and affirm if a rational juror could find guilt beyond a reasonable doubt.
- A defendant has a constitutional right to self-representation if the waiver of counsel is knowing, voluntary, and intelligent; a trial court must ensure the defendant understands the charges and risks of proceeding without counsel.

## Conclusion

The court upheld the conspiracy convictions because the record permitted the jury to find that Hughes and ARCO Properties did not take affirmative, communicated steps to withdraw within the limitations period, and it also upheld Hughes’s choice to proceed pro se where the trial court secured a valid waiver of counsel.


United States v. Hughes, 191 F.3d 1317 (10th Cir. 1999)