Fraudulent Credentialing as Property Fraud: Salaries and Benefits Paid to Unqualified Nurses Are “Money or Property” (Not “Right-to-Control”)

Introduction

In United States v. Gail Russ (11th Cir. Jan. 16, 2026) (per curiam) (not for publication), the Eleventh Circuit affirmed the convictions and sentences of Gail Russ, Vilaire Duroseau, and Cassandre Jean for wire fraud and conspiracy to commit wire fraud. The prosecution arose from an alleged multi-year scheme (2016–2021) to create and distribute fraudulent nursing diplomas and transcripts used by co-conspirators to obtain nursing licensure and, crucially, employment, pay, and benefits from health care providers.

The appeal presented three central issues:

Scope of “property” in wire fraud: whether the case was an impermissible “right-to-control” prosecution under Ciminelli v. United States, and whether salaries paid to fraudulently credentialed nurses qualify as “money or property.”
Juror replacement: whether the district court violated constitutional rights by excusing a juror (reported to have slept in court) without on-the-record questioning or a separate hearing.
Loss calculation: whether the district court erred in applying U.S.S.G. § 2B1.1(b)(1), and whether it properly used a “gain” proxy.

Summary of the Opinion

The court affirmed across the board. First, it held the Government pursued a classic property-fraud theory: the object of the deception was money (wages/benefits paid by employers), not the employers’ “right to control” economic decisions through truthful information. Second, it held the salaries and benefits were not merely incidental costs (as in Kelly v. United States) but rather a purpose of the conspiracy. Third, the court rejected challenges to the sentencing loss determination because the district court used a gain method and the appellants did not properly contest that methodology on appeal.

On juror replacement, the court held that excusing a juror who was sleeping and distracting others—without a separate hearing—fell within the district court’s discretion and did not violate the Fifth or Sixth Amendments.

Analysis

Precedents Cited

1) Defining “Money or Property” and rejecting “Right-to-Control”

Ciminelli v. United States: The opinion treats Ciminelli as a boundary marker. Ciminelli rejects prosecutions that treat deprivation of “valuable economic information” (used to make discretionary decisions) as the “property” at issue. The Eleventh Circuit distinguished the present case by emphasizing that the object was employer money (pay/benefits), not merely an informational entitlement.
Cleveland v. United States: Cited to underscore that federal fraud statutes protect “traditional concepts of property,” and that certain government-issued interests (e.g., licenses) may not qualify as “property” in the relevant sense. The court used Cleveland to frame why it mattered that the Government did not base the case on deprivation of a nursing license or regulatory interest.
Kousisis v. United States: The opinion relies heavily on Kousisis to validate a “fraudulent-inducement” theory even where the victim receives goods/services of arguable value. The court quoted Kousisis for the proposition that it does not matter if the defendant provides something “of equal value in return,” so long as the scheme aimed to obtain the victim’s “money or property.” The Eleventh Circuit treats the employment relationship as a bargain induced by misrepresentation about a core attribute: professional qualification.
United States v. Takhalov: Used as an Eleventh Circuit articulation of the “nature of the bargain” concept (lying about a core characteristic like “diamond vs cubic zirconium”). Although acknowledged as “overruled in part” by Kousisis, Takhalov still functions in the opinion as an intuitive illustration: employers paid for qualified nurses but received “counterfeit nurses” in exchange for salaries.
United States v. Estepa: Cited for the elements of wire fraud and conspiracy to commit wire fraud, providing the doctrinal frame for sufficiency and the Government’s burden.

2) “Incidental costs” vs “object of the scheme”

Kelly v. United States: The court used Kelly to draw a limiting distinction: wages paid to government employees may fail the “money or property” element when they are merely incidental to a regulatory/political scheme. Here, by contrast, wages and benefits were not byproducts; they were the scheme’s purpose. The court’s key move is characterizing the fraudulent diplomas as instruments designed to unlock employment compensation—placing wages at the center of the fraud.

3) Conspiracy attribution and foreseeability

Smith v. United States: Cited for the proposition that conspiracy is a continuing offense and a conspirator is responsible for co-conspirators’ acts in pursuit of the common plan. This supported rejecting the argument that certain appellants did not personally interact with employers.
United States v. Alvarez: Cited for the “reasonably foreseeable consequence” test in attributing co-conspirator conduct to a defendant, further supporting employer-wage harms as within the conspiracy’s scope and predictability.

4) Juror replacement discretion and constitutional constraints

Fed. R. Crim. P. 24(c) (via case law) and United States v. Fajardo: Fajardo supplied the operational standard: a juror may be replaced before deliberations if “unable” or “disqualified,” and a separate hearing is unnecessary where inability is obvious (including sleeping in open court).
United States v. Puche: Cited for the prejudice/bias concept, including that prejudice can exist if a juror is dismissed without factual support or for a legally irrelevant reason.
United States v. Smith (550 F.2d 277): Cited to support removal of jurors who “napped regularly,” emphasizing that persistent sleeping is incompatible with the duty to evaluate evidence. The opinion notes its precedential status through Bonner v. City of Prichard.
United States v. Brown (996 F.3d 1171) (en banc): Used to distinguish post-deliberation juror dismissal concerns; it recognized Sixth Amendment unanimity implications where a juror is removed after deliberations begin without an unambiguous record of misconduct. Here, dismissal occurred before deliberations and on an evidentiary basis (sleeping/distraction).
United States v. Augustin and United States v. Brown (364 F.3d 1266): Cited for standards of review (abuse of discretion vs de novo for constitutional questions), anchoring the appellate posture.

5) Sentencing loss, gain proxies, and forfeiture

United States v. Campbell (765 F.3d 1291): Cited for the principle that district courts have “considerable leeway” in estimating loss and need only make a “reasonable estimate.”
United States v. Bracciale: Cited for the rule that gain may substitute for loss where loss is not feasible, but not where a reasonable estimate of victim loss is available. The opinion treated the gain method used by the district court as permissible.
United States v. Campbell (26 F.4th 860) (en banc): Cited for forfeiture/abandonment principles on appeal; because no party properly challenged the gain method or its factual predicates, the court declined to revisit them.
United States v. Noriega, United States v. Chafin, and United States v. Brown (934 F.3d 1278): Cited primarily for standards of review governing motions to dismiss, acquittal, and new trial.

Legal Reasoning

A) Why this is “property fraud,” not “right-to-control”

The court framed the indictment and trial proof as targeting a traditional property interest: employer money paid as salaries, wages, and benefits. It emphasized multiple record markers:

The indictment explicitly described the conspiracy’s purpose as obtaining “employment, pay, and other benefits” through false credentials.
At trial, employers testified they would not have hired/promoted/paid (or would have paid less) had they known the truth.
The Government disclaimed any theory that employers were defrauded out of licenses; it argued employers lost “cold hard cash.”
No jury instructions sought or reflected a “right-to-control” framework.

On this record, the court treated the misrepresentation as going to “the nature of the bargain” (qualification to perform regulated clinical work), not merely to information that could influence discretionary decisionmaking. The opinion’s core move is to characterize credential falsification as a direct mechanism for transferring employer funds, thereby satisfying the “money or property” requirement as articulated in Ciminelli v. United States.

B) Why wages were the object of the scheme (distinguishing Kelly)

The court’s response to Kelly v. United States is categorical: in Kelly, employee wages were “incidental costs” of a regulatory abuse (lane closures), whereas here wages were a purpose of the fraud. The opinion reasoned that the “point” of counterfeit diplomas is to obtain nursing employment and compensation. That is, the scheme’s success condition was receipt of employer money.

The court further relied on Kousisis v. United States to reject the defense argument that employers received value (nursing services) and therefore suffered no property deprivation. Under Kousisis, the fraud inquiry does not turn on whether the victim received some value; it turns on whether the defendant schemed to obtain the victim’s money or property through deception.

C) Conspiracy responsibility without direct employer contact

Responding to claims that particular appellants did not personally interact with employers, the court invoked conspiracy principles: under Smith v. United States and United States v. Alvarez, conspirators are responsible for foreseeable acts in furtherance of the common plan. Because the indictment alleged—and the evidence showed—that employment compensation was a purpose of the conspiracy, the flow of wages to fraudulently credentialed nurses was not merely foreseeable; it was integral.

D) Juror replacement without a separate hearing

The Eleventh Circuit treated the sleeping juror as a straightforward Rule 24(c) scenario. Under United States v. Fajardo, a hearing is unnecessary where inability is clear, and sleeping in open court is specifically identified as an example. The court also cited additional factual bases (distraction to others and odor) and noted that the judge had repeatedly raised concerns with the parties. The court rejected Sixth Amendment arguments (including those linked to the juror’s race) because the record reflected an adequate factual basis and because another black juror had been agreed upon during voir dire.

The court distinguished United States v. Brown (996 F.3d 1171) (en banc) as involving post-deliberation removal, which carries heightened risk to unanimity; here, the removal occurred before deliberations and was supported by an observable inability to perform.

E) Loss calculation and reliance on gain

Although appellants attempted to tie the Guidelines loss calculation to their statutory “money or property” arguments, the court found a decisive factual point: the district court did not enhance based on employer wage loss; it used a gain method. Under United States v. Campbell (765 F.3d 1291) and United States v. Bracciale, that approach can be permissible. The panel further held that because the appellants did not properly contest the gain methodology or underlying factual basis on appeal, forfeiture principles under United States v. Campbell (26 F.4th 860) (en banc) foreclosed relief.

Impact

1) Credential fraud and compensation as “property” after Ciminelli

The opinion provides a practical template for post-Ciminelli v. United States fraud prosecutions: to avoid “right-to-control” vulnerability, the Government should clearly plead and prove that the scheme’s object is a transfer of money (or other traditional property), not merely interference with informed decisionmaking. Here, the prosecution’s repeated “money-not-information” framing—paired with employer testimony about hiring and pay decisions—was central to affirmance.

2) The centrality of Kousisis to employment-and-services fraud

By leaning on Kousisis v. United States, the court reinforced that fraud liability can attach even where some services are rendered. For employment obtained by deception about a core qualification, the “services rendered” defense becomes weaker because the deception is tied to the bargain’s essence (and to wage payments as the property obtained). Future cases involving resumes, licenses, certifications, or other eligibility representations are likely to cite this reasoning when the misstatement is core to employability or compensation level.

3) “Incidental cost” arguments under Kelly narrowed in wage-centric schemes

The opinion illustrates how Kelly v. United States is cabined: when wages are paid to effectuate a regulatory/political scheme, they may be incidental; when wages are the intended payoff of deception, they are “money or property.” This wage-object vs wage-byproduct distinction will matter in fraud cases where payroll is part of the factual narrative but not necessarily the scheme’s objective.

4) Trial management: sleeping jurors and the necessity of hearings

On juror replacement, the opinion endorses a pragmatic approach under United States v. Fajardo: where inability is evident (e.g., sleeping), a separate hearing is not constitutionally required, especially before deliberations. That said, the decision also signals that trial judges should build a record—here, the judge’s repeated discussions with counsel about attentiveness and distraction helped validate the exercise of discretion.

5) Sentencing practice: gain proxies and appellate preservation

The loss discussion underscores two recurring sentencing lessons: (i) courts retain flexibility to estimate loss and may use gain in appropriate circumstances (United States v. Campbell (765 F.3d 1291); United States v. Bracciale), and (ii) parties must precisely preserve and brief objections to methodology and factual predicates, or forfeiture may bar review (United States v. Campbell (26 F.4th 860) (en banc)).

Complex Concepts Simplified

Wire fraud (“money or property”): The statute targets schemes using deception to obtain traditional property (like money). After Ciminelli v. United States, “property” does not include a victim’s mere interest in making decisions with perfect information (“right to control”).
Right-to-control theory: A disallowed theory that treats the withholding of valuable decisionmaking information as the property stolen. The opinion says this case is different because the defendants (through co-conspirators) obtained paychecks, not just influenced decisions.
Fraudulent inducement: A classic fraud model: the victim parts with money because they were tricked into the transaction. Under Kousisis v. United States, it does not defeat fraud that the victim received some services or that the exchange might look “equal” in hindsight; the question is whether money was obtained by deception.
“Incidental cost”: Some schemes cause expenditures that are merely side effects. Under Kelly v. United States, such side-effect wages may not satisfy the property requirement. Here, the wages were the intended payoff, not a side effect.
Conspiracy attribution: Even if one conspirator never speaks to the victim, they can be responsible for foreseeable acts of co-conspirators done to further the plan (Smith v. United States; United States v. Alvarez).
Juror replacement: Before deliberations, a juror can be replaced if unable to perform duties. If the inability is obvious (like repeatedly sleeping), a separate evidentiary hearing may be unnecessary (United States v. Fajardo).
Loss vs gain at sentencing: The Guidelines often increase punishment based on loss. If loss is hard to quantify, courts may use the defendant’s gain as a proxy, but disputes about this choice must be properly raised and briefed.

Conclusion

United States v. Gail Russ situates fraudulent professional credentialing within a traditional property-fraud framework when the scheme’s purpose is to obtain salaries and benefits from employers. By distinguishing Ciminelli v. United States and applying Kousisis v. United States, the Eleventh Circuit reinforced that deception about core qualifications can support wire fraud even if services are rendered—because the employer’s money remains the object. The decision also reaffirms broad trial-court discretion to replace an obviously inattentive juror under United States v. Fajardo and highlights the practical importance of preserving sentencing methodology challenges on appeal.