Circuit Court: Spreadsheets OK as evidence

A Terre Haute company and its president lost an appeal of their convictions and sentence for making materially false statement reports under the Clean Water Act.

In United States of America v. Derrik Hagerman and Wabash Environmental Technologies, LLC, Nos. 07-3874, 07-3875, Derrik Hagerman argued the District Court erred in admitting into evidence copies of certain electronic spreadsheets that recorded test results of waste liquid that weren't charged in indictment. Hagerman believed the test results are evidence of prior bad acts that should have been excluded under Fed. Rule of Evid. 404(b).

Wabash Environmental treated industrial liquid waste and discharged the treated liquid into the Wabash River. The company was required to make monthly reports disclosing the test results of the waste using EPA-approved procedures.

The spreadsheets in question in the appeal cover the same period of time that Hagerman and his company were charged with misrepresenting results of tests. It would have been infeasible to separate out the evidence to eliminate any hint that Hagerman had also falsified other test results, wrote the 7th Circuit in the per curium opinion. The judges also dismissed Hagerman's argument that by admitting those spreadsheets, which showed misconduct not charged in the indictment, the District Court allowed the indictment to be "constructively amended."

The 7th Circuit affirmed the District Court judge's jury instruction on the requirement Hagerman was to certify each report was accurate and complete by using language from Wabash Environmental's discharge permit. Hagerman believed it should be up to the jury to determine whether Wabash Environmental had a system in place to ensure the test results were properly gathered and evaluated.

"The judge's instruction that the testing methods must 'conform to applicable federal regulations' was a correct interpretation of the permit, and the meaning of the permit presented an issue of law that the judge was entitled to determine, rather than leave to the jury," wrote the court.

The 7th Circuit also upheld Hagerman's 60-month prison sentence over Hagerman's arguments that imprisonment will make paying restitution difficult and that he's made considerable contributions to his community.

In September 2008, Hagerman's appeal of the District Court's dismissal of the government's petition for relief after Wabash agreed to start paying restitution and furnish specific financial information was dismissed because Hagerman and Wabash Environmental weren't represented by an attorney. The 7th Circuit ruled owners of limited liability companies must have an attorney to appeal a decision in federal court.