Case: 21-1756 Document: 85 Page: 1 Filed: 01/24/2024
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
DENNIS ERB,
Petitioner
v.
DEPARTMENT OF THE TREASURY,
Respondent
______________________
2021-1756
______________________
Petition for review of the Merit Systems Protection
Board in No. DC-0752-20-0468-I-1.
______________________
Decided: January 24, 2024
______________________
JENNIE CATHRYNE BLAINE WATSON, Alan Lescht and
Associates, PC, Washington, DC, argued for petitioner.
Also represented by CONOR DANIEL AHERN.
KRISTIN ELAINE OLSON, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, DC, argued for respondent. Also represented by
BRIAN M. BOYNTON, TARA K. HOGAN, PATRICIA M.
MCCARTHY.
______________________
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2 ERB v. TREASURY
Before DYK, TARANTO, and CHEN, Circuit Judges.
CHEN, Circuit Judge.
Dennis Erb was removed from his position in the Department of the Treasury (Treasury) for repeatedly falsifying information on his timecard and for failing to comply
with instructions from his supervisor. Mr. Erb appealed to
the Merit Systems Protection Board (Board), and an administrative judge affirmed Treasury’s removal decision.
Erb v. Dep’t of Treasury, No. DC-0752-20-0468-I-1, 2021
WL 76034 (M.S.P.B. Jan. 6, 2021), J.A. 1–37. This initial
decision of the administrative judge became the final decision of the Board. Because substantial evidence supports
the Board’s determination that Mr. Erb repeatedly falsified information on his timecard and because we sustain
the Board’s affirmance of both the overall falsification and
failure-to-follow-instructions charges, we affirm.
BACKGROUND
Prior to his removal, Mr. Erb held the position of Intelligence Research Specialist with Treasury’s Financial
Crimes Enforcement Network (FinCEN), Intelligence Division. J.A. 2. On March 4, 2020, Treasury notified Mr. Erb
that he would be removed from his position, charging him
with (1) falsifying government records for allegedly reporting false information on his timecard over several days in
2018 and (2) failing to follow supervisory instructions in
2018 in which Mr. Erb did not comply with a directive from
his supervisor to serve as acting director.
Issues with Mr. Erb’s conduct arose well before these
2018 incidents. Ryan Crosby, Mr. Erb’s supervisor of several years, offered testimony directed to these issues at a
hearing before the administrative judge. Id. at 6. In
Mr. Crosby’s recounting, he had concerns with Mr. Erb’s
timecard submissions “[a]lmost from the first day that
[Mr. Crosby] came to know that [Mr. Erb] would be on [his]
team.” J.A. 75. Before Mr. Erb joined Mr. Crosby’s team,
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ERB v. TREASURY 3
Mr. Erb’s prior supervisor had warned Mr. Crosby “that
there [were] indications that [Mr. Erb] may be involved in
time card fraud.” Id.; see J.A. 8.
Mr. Crosby testified that, while supervising Mr. Erb,
he (1) frequently noticed errors and omissions in Mr. Erb’s
submitted timecards, (2) repeatedly admonished Mr. Erb
to resolve these inaccuracies, and (3) conducted multiple
timecard audits because Mr. Erb had exhausted his leave.
J.A. 7; J.A. 75. Despite having been provided policies and
procedures for timecard submissions, Mr. Erb routinely
miscoded his timecards, for example, using sick leave when
he should have used annual leave or recording more hours
worked than he was entitled to record. J.A. 7; J.A. 71–72.
In one instance, Mr. Crosby confronted Mr. Erb about a
day in which Mr. Erb claimed sick leave but was seen in a
social media post to be on vacation. J.A. 7; J.A. 72. On
other occasions, Mr. Erb booked vacations even though he
had no annual leave available and had to request advances
on his annual leave. J.A. 7–8; J.A. 72. Mr. Crosby recalled
that in Mr. Erb’s evaluation for fiscal year 2017,
Mr. Crosby initially included a comment that Mr. Erb
needed to pay closer attention to his timecard submissions.
J.A. 8; J.A. 74. Mr. Erb entreated Mr. Crosby to strike this
comment, and Mr. Crosby agreed to remove it to help
Mr. Erb improve his image at the agency. J.A. 8; J.A. 74.
In response to concerns about Mr. Erb’s time and attendance, the Treasury Inspector General (TIG) began investigating Mr. Erb’s time and attendance records and
facility access records from October 15, 2017 to October 13,
2018. J.A. 211. The resulting report documented numerous instances where (1) Mr. Erb submitted and validated
in-office work time but never accessed a FinCEN facility
and (2) telework login records indicated that Mr. Erb engaged in little or no telework activity. Id.
Based in part on the investigation and the TIG’s report,
on October 17, 2019, Treasury proposed removing Mr. Erb
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4 ERB v. TREASURY
from his position based on two charges: (1) falsification of
a government record and (2) failure to follow supervisory
instruction. Id. at 209–12. The evidence that Treasury
considered included, in addition to the TIG’s report, seven
exhibits cited in that report, six memoranda encompassing
interviews with witnesses and Mr. Erb, Mr. Erb’s timecard
and facility access records, and a spreadsheet documenting
the times that Mr. Erb remotely logged into the telework
system. Id. at 211.
The notice of proposed removal lodged eleven specifications 1 for the falsification charge. Id. at 209–11. For each
specification, Mr. Erb submitted a timecard indicating that
he worked in the office or, in one specification, engaged in
a full day of telework. Id. But for each of these specifications, Treasury found that he did not physically report to
the FinCEN facility and engaged in little or no telework.
Id. As for the second charge, the notice of proposed removal
put forth a single specification in which Mr. Erb’s immediate supervisor had assigned him the role of acting director
for two days and Mr. Erb immediately reassigned the role
to another colleague without his supervisor’s approval and
departed the office on an unexcused absence. Id. at 211.
On March 4, 2020, after Mr. Erb provided written and
oral responses to the proposed removal, Treasury issued a
decision removing Mr. Erb from his position. J.A. 2. The
decision determined that a preponderance of the evidence
supported ten of the eleven specifications (Specifications 2
through 11) of the falsification charge and the sole specification of the failure-to-follow-instruction charge articulated in the notice of proposed removal. J.A. 215.
1 “Each independent ‘specification’ constitutes a separate act or event that supports a charge.” Tartaglia v.
Dep’t of Veterans Affs., 858 F.3d 1405, 1407 n.2 (Fed. Cir.
2017).
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ERB v. TREASURY 5
In determining the appropriate penalty, Treasury’s decision considered the nature and seriousness of the offenses, concluding that both charges were “inimical to
[Mr. Erb’s] position and the FinCEN mission” and that
“[his] behavior towards [his] supervisor undermined management’s capacity to maintain employee efficiency and
discipline.” Id. Emphasizing the gravity of Mr. Erb’s offenses, the decision explained that “[his] misconduct went
to the very core of [his] responsibilities as an Intelligence
Research Specialist and called into question [his] reliability, veracity, trustworthiness, and willingness to perform
[his] duties.”
Id. Mr. Erb, as Treasury noted, was “on notice about the conduct in question” and “on notice about
how to properly code and validate [his] time card.”
Id. at
215–16. According to Treasury, a lesser sanction would not
be appropriate because “the seriousness of the conduct underlying the charges and the repetitive nature of [his] conduct (including multiple specifications for one charge
alone) support a penalty of removal.” Id. at 216. Treasury
further highlighted “that the penalty of removal under the
circumstances outlined in this decision [wa]s consistent
with the FinCEN Table of Penalties” and that “a sanction
less than removal would have no effect in changing
[Mr. Erb’s] behavior and would not promote the efficiency
of the federal service.” Id.
Mr. Erb appealed Treasury’s removal action to the
Board, and the administrative judge issued an initial decision that became the Board’s final decision on February 10,
2021. J.A. 29. This final decision sustained each of the
charges and declined to mitigate Treasury’s selected penalty of removal. Id. at 21, 25, 29. Mr. Erb, Mr. Crosby, and
several other former colleagues offered testimony in a hearing. Id. at 1, 6–13, 22, 26. The Board’s decision made adverse credibility determinations against Mr. Erb, crediting
the other witnesses’ testimonies over his testimony. Id. at
12–13. According to the decision, Mr. Erb’s testimony was
not “direct or straightforward,” “contained
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6 ERB v. TREASURY
improbabilities,” and was inconsistent with his deposition
testimony. Id. at 13. By comparison, the other witnesses’
testimonies were clear, direct, straightforward, and consistent with documentary evidence. Id. at 12–13. For these
reasons, the decision accorded “very little weight” to
Mr. Erb’s testimony and “significant weight” to the other
witnesses’ testimonies. Id.
Sustaining the falsification charge, the Board found
that Treasury had demonstrated that Mr. Erb (1) had incorrectly entered information into his timecards for Specifications 2 through 11 of the falsification charge, and
(2) had done so with the intent to deceive or mislead Treasury for his own material gain. Id. at 15–21. The Board
likewise sustained the failure-to-follow-instructions
charge, finding that Mr. Erb’s explanation as to why he
could not comply with his supervisor’s instructions lacked
credibility. Id. at 24–25.
Turning to nexus and penalty, the Board determined
that Treasury established a nexus between Mr. Erb’s misconduct and the efficiency of the service and found no error
in Treasury’s considerations in selecting removal as the
penalty. Id. at 25, 28–29. As the Board observed, “[t]he
Board has long recognized that removal for falsification
and dishonest activity promotes the efficiency of the service
since such behavior raises serious doubts regarding the appellant’s reliability, trustworthiness, and continued fitness
for employment[,]” and “the Board has also held that removal for failure to follow instructions is not an unreasonable penalty despite an appellant’s superior performance.”
Id. at 28–29 (citations omitted). The Board accordingly affirmed Treasury’s removal action. Id. at 29.
Mr. Erb timely appealed. We have jurisdiction under
28 U.S.C. § 1295(a)(9) and
5 U.S.C. § 7703(b)(1)(A).
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ERB v. TREASURY 7
STANDARD OF REVIEW
We may set aside a Board decision if it is “(1) arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence.” 5 U.S.C.
§ 7703(c). “The petitioner bears the burden of establishing
error in the Board’s decision.” Harris v. Dep’t of Veterans
Affs.,
142 F.3d 1463, 1467 (Fed. Cir. 1998).
DISCUSSION
On appeal, Mr. Erb alleges that (1) the Board acted arbitrarily in determining that his testimony lacked credibility, (2) substantial evidence does not support the Board’s
decision to sustain the falsification charge, (3) substantial
evidence does not support the Board’s decision to sustain
the failure-to-follow-instructions charge, and (4) the penalty of removal was unreasonable. As discussed below, we
disagree on each count.
I. Credibility Determinations
Mr. Erb alleges that the Board misapplied the factors
for determining credibility outlined in the Board’s precedential decision in Hillen v. Department of the Army, 35
M.S.P.R. 453, 458 (M.S.P.B. 1987). Appellant’s Br. 34–38.
The Hillen factors are “general internal procedural requirements that the [Board] has established for its adjudicative processes, and our review of the [Board]’s fulfillment
of these procedural processes is in that light.” Haebe v.
Dep’t of Just.,
288 F.3d 1288, 1302 n.32 (Fed. Cir. 2002).
However, we reiterate that credibility “determinations are
virtually unreviewable.” Hambsch v. Dep’t of Treasury,
796 F.2d 430, 436 (Fed. Cir. 1986). Here, the Board provided sufficient reasoning for generally giving little weight
to Mr. Erb’s testimony by referring to his demeanor during
the hearing, citing discrepancies in his testimony, and explaining why his testimony “contained improbabilities.”
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8 ERB v. TREASURY
J.A. 12–13. The Board also repeatedly compared Mr. Erb’s
specific version of events with contrary evidence of record
and found his version of events to not be credible. See, e.g.,
Id. at 15–18, 25–26. Mr. Erb has failed to show how the
Board’s credibility determinations were arbitrary.
II. Charge of Falsification of Government Records
Mr. Erb challenges the Board’s sustainment of Treasury’s falsification charge. Appellant’s Br. 14–31. To establish a charge of falsification, an agency must prove by a
preponderance of the evidence that the employee knowingly supplied wrong information with the intent of defrauding the agency. Leatherbury v. Dep’t of Army, 524
F.3d 1293, 1300 (Fed. Cir. 2008). We find substantial evidence supports at least four of the ten specifications for the
falsification charge and therefore supports the overall
charge.
To start, the Board did not err in determining that
Mr. Erb supplied wrong information for Specifications 2, 9,
10, and 11. With respect to Specifications 2 and 11, the
Board found that Mr. Erb submitted timecards for two
days reflecting a full tour of duty in the office and that
Mr. Erb admitted these submissions were false. J.A. 15–
16, 18. With respect to Specifications 9 and 10, the Board
found that Mr. Erb submitted timecards for two days reflecting five hours of in-office work and four hours of sick
leave. Id. at 18. The Board found that, on both days,
Mr. Erb (1) did not work in a FinCEN facility and
(2) “claimed sick hours when he was not ill, seeking medical assistance, or attending a routine medical appointment.” Id. at 18–19. While Mr. Erb testified that he
teleworked both days, the Board did not find this testimony
credible and gave it little weight. Id. at 11–13. Instead,
the Board found that Mr. Erb had not remotely logged into
the FinCEN network on these days and credited testimony
from Mr. Erb’s former colleagues that “to justify a full day
of work, an employee must be logged into the network” and
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ERB v. TREASURY 9
that “substantive work require[d] system access.” Id. at 19.
These findings, we conclude, amount to substantial evidence in support of the Board’s determination that Treasury proved Mr. Erb supplied wrong information on his
timecard for the days corresponding to Specifications 2, 9,
10, and 11.
Next, we do not find merit to Mr. Erb’s challenges to
the Board’s findings of intent for these specifications. The
intent element of falsification requires the agency to show
that the employee (a) “intended to deceive or mislead the
agency” and (b) “intended to defraud the agency for his own
private material gain.” Leatherbury, 524 F.3d at 1300.
As to the first prong of intent, the Board found that
Mr. Erb intended to deceive or mislead Treasury because
he (1) was repeatedly told not to submit inaccurate time
and attendance records, (2) had coded his time properly numerous times and thus knew how to properly code his time,
and (3) could not offer any plausible explanation for his errors with respect to Specifications 2, 9, 10, and 11. J.A. 19.
For Specifications 2 and 11, the Board did not find credible
Mr. Erb’s claims that internal system errors or another
person changed his submission or that he unintentionally
miscoded his time. 2 Id. at 15–16, 19. For Specifications 9
and 10, Mr. Erb offered no explanation for the timecard errors. Id. at 18. Substantial evidence accordingly supports
the Board’s determination that Mr. Erb intended to mislead or deceive Treasury.
2 On appeal, Mr. Erb requests that we take judicial
notice of the fact that the federal government was shut
down on the day corresponding to Specification 2. ECF
No. 83. We do not see this fact as a basis for disturbing the
Board’s finding that Mr. Erb submitted a false time report
with intent.
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10 ERB v. TREASURY
As to the second prong of intent, the Board did not err
in finding that Treasury proved Mr. Erb engaged in timecard falsification for his own material gain. We are unpersuaded by Mr. Erb’s argument that salaried employees
with good performance reviews cannot gain any material
benefit from falsifying their timecards. Appellant’s Reply
Br. 15–18. As the Board explained, as a result of Mr. Erb’s
misconduct, he “received pay for hours he performed minimal, if any work” and “was being paid for working in the
office while he was not working, which allowed him to receive pay instead of tap[p]ing into or depleting his scarce
annual leave hours.” J.A. 20. We conclude that substantial
evidence supports the Board’s determination that Mr. Erb
engaged in this misconduct for his own material gain.
In sum, we sustain Specifications 2, 9, 10, and 11 and
thus sustain the overall falsification charge. We do not
reach Mr. Erb’s challenges to Specifications 3 through 8 because, as discussed below, we may uphold the penalty of
removal on the basis of the overall sustained falsification
charge supported by the four sustained specifications.
III. Charge of Failure to Follow Supervisory Instructions
Under the Board’s standard for proving a charge of failure to follow instructions—which Mr. Erb does not challenge—“an agency must establish that the
employee: (1) was given proper instructions, and (2) failed
to follow the instructions, without regard to whether the
failure was intentional or unintentional.” Powell v. U.S.
Postal Serv., 122 M.S.P.R. 60, ¶ 5 (M.S.P.B. 2014). Mr. Erb
alleges the Board erred in sustaining this charge because
Mr. Erb acted reasonably when he, in response to being assigned to serve as acting director by his immediate supervisor, reassigned a colleague to that role without notifying
his immediate supervisor. Appellant’s Br. 31–34. The
Board found that Mr. Erb: (1) improperly delegated his
acting supervisory responsibility, (2) provided an unreasonable justification for this delegation (that he was
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ERB v. TREASURY 11
teleworking), and (3) failed to communicate with his direct
supervisor despite being expressly told to do so. J.A. 24–
25. Substantial evidence supports the Board’s determination that Mr. Erb failed to comply with his supervisor’s instructions, and we thus sustain the Board’s ruling as to this
charge.
IV. Penalty Determination
Finally, the Board did not err in sustaining Treasury’s
selected penalty of removal. “It is well-established that selecting the penalty for employee misconduct is left to the
agency’s discretion.” Webster v. Dep’t of Army, 911 F.2d
679, 685 (Fed. Cir. 1990). “This court will not disturb the
agency’s choice unless the severity of its action appears totally unwarranted in light of the relevant factors.” DeWitt
v. Dep’t of Navy,
747 F.2d 1442, 1445 (Fed. Cir. 1984), cert.
denied,
470 U.S. 1054 (1985). On appeal, Mr. Erb critiques
Treasury’s application of the Douglas v. Veterans Administration factors, twelve non-exhaustive factors an agency
may use to determine the appropriateness of a penalty.
5
M.S.P.R. 280, 305–06 (M.S.P.B. 1981); see Appellant’s
Br. 38–46. In Mr. Erb’s view, Treasury “failed to provide
adequate evidence to support the severe penalty of removal
and communicate why it is the appropriate penalty in this
circumstance.” Appellant’s Br. 45. Mr. Erb does not allege
that Treasury or the Board failed to consider any specific
factor and, instead, seeks to have us reweigh the facts and
make our own determination as to the penalty that should
have been imposed. We decline to do so. See Tartaglia, 858
F.3d at 1408–09 (explaining that “we may not” reweigh evidence in determining the appropriate penalty for a case).
We likewise find no abuse of discretion in the Board’s
decision to affirm Treasury’s penalty. In its removal decision, Treasury expressly referred to the twelve Douglas factors, noted that certain Douglas factors were inapplicable
or neutral, and analyzed each relevant and aggravating
factor to determine that removal was the appropriate
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12 ERB v. TREASURY
penalty. J.A. 215–16, 215 n.1. And the Board acknowledged the detailed analysis that Treasury underwent in deciding to remove Mr. Erb. See J.A. 28. We are
unpersuaded that removal was an unreasonable penalty.
This case, we note, does not present a scenario in which
remand would be appropriate because we have “upheld
fewer than all the charges against an employee.” Guise v.
Dep’t of Just., 330 F.3d 1376, 1381 (Fed. Cir. 2003). Our
decision in Guise teaches that in such a situation, the
agency’s selected penalty may be called into question.
Hathaway v. Dep’t of Just.,
384 F.3d 1342, 1353 (Fed. Cir.
2004). Here, having sustained all charges, we do not understand the Guise rule to be controlling.
To the extent the Guise rule applies in equal force to
the present case, where we have sustained fewer than all
specifications of the falsification charge, “when the agency
makes . . . clear before the Board” that “the agency itself
would have imposed the same penalty on the basis of the
sustained charges that it chose on the basis of the combined
charges,” the agency’s chosen penalty is entitled to deference. Lachance v. Devall, 178 F.3d 1246, 1259 (Fed. Cir.
1999). Treasury’s removal decision viewed as aggravating
factors that Mr. Erb “had been specifically advised in the
past on the need for proper timecard entry” and was “on
notice about how to properly code and validate [his] time
card.” J.A. 215–16. The removal decision emphasized that
the seriousness of Mr. Erb’s misconduct, and, in particular,
“the repetitive nature of [his] conduct (including multiple
specifications for [the falsification] charge []) support[ed] a
penalty of removal.” Id. at 216. Treasury additionally determined removal to be consistent with the FinCEN Table
of Penalties, id. at 216, and Mr. Erb on appeal does not dispute that the Table of Penalties deems removal to be
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ERB v. TREASURY 13
reasonable for even a single falsification offense. 3 Consistent with the reasoning for declining to mitigate the penalty articulated in Treasury’s decision, our opinion today
leaves undisturbed Treasury’s findings with respect to earlier concerns with Mr. Erb’s conduct, sustains both
charges, and, in sustaining multiple specifications of the
falsification charge, confirms the repetitive nature of
Mr. Erb’s misconduct. Mr. Erb on appeal identifies nothing suggesting that Treasury would have reached a different result absent the six other specifications underlying the
falsification charge. We thus see no basis for overturning
Treasury’s selected penalty of removal.
CONCLUSION
We have considered Mr. Erb’s remaining arguments
and find them unpersuasive. For the foregoing reasons, we
affirm the Board’s decision to affirm Treasury’s removal of
Mr. Erb.
AFFIRMED
3 Oral Arg. at 45:48–47:18 (available at
https://oralarguments.cafc.uscourts.gov/default.aspx?fl=21
-1756_12042023.mp3) (describing that FinCEN’s Table of
Penalties indicated removal was within the appropriate
range of penalties for first, second, and third offenses of falsification of government records).
