Case: 22-2045 Document: 47 Page: 1 Filed: 04/03/2024
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`NOTE: This disposition is nonprecedential.
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`United States Court of Appeals
`for the Federal Circuit
`______________________
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`MICHAEL E. SHEIMAN,
`Petitioner
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`v.
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`DEPARTMENT OF THE TREASURY,
`Respondent
`______________________
`
`2022-2045
`______________________
`
`Petition for review of the Merit Systems Protection
`Board in No. SF-0752-15-0372-I-2.
`______________________
`
`Decided: April 3, 2024
`______________________
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`GEORGE CHUZI, Kalijarvi, Chuzi, Newman & Fitch, PC,
`Washington, DC, argued for petitioner. Also represented
`by AARON H. SZOT.
`
` STEPHANIE FLEMING, Commercial Litigation Branch,
`Civil Division, United States Department of Justice, Wash-
`ington, DC, argued for respondent. Also represented by
`REGINALD THOMAS BLADES, JR., BRIAN M. BOYNTON,
`PATRICIA M. MCCARTHY.
` ______________________
`
`
`

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`SHEIMAN v. TREASURY
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`Before PROST, SCHALL, and REYNA, Circuit Judges.
`SCHALL, Circuit Judge.
`
`DECISION
`Michael E. Sheiman petitions for review of the May 24,
`2022 Final Order of the Merit Systems Protection Board
`(“Board”) that sustained the action of the Internal Revenue
`Service (“IRS” or “agency”) that removed Mr. Sheiman from
`his position as a GS-13 Senior Appraiser in Honolulu, Ha-
`waii. Sheiman v. Dep’t of the Treasury, No. SF-0752-15-
`0372-I-2, 2022 WL 1667885 (M.S.P.B. May 24, 2022); J.A.
`1–23.1 We have jurisdiction pursuant to 28 U.S.C.
`§ 1295(a)(9). For the reasons stated below, we affirm.
`DISCUSSION
`I
`The events resulting in Mr. Sheiman’s removal began
`when the agency received an anonymous letter dated Sep-
`tember 16, 2011. The writer alleged that Mr. Sheiman was
`abusing his work time by, among other things, “golfing in
`the early afternoons during the work week.” J.A. 2 (cita-
`tion omitted). From September 26, 2011, to February 18,
`2014, the Treasury Inspector General for Tax Administra-
`tion (“TIGTA”) conducted an investigation regarding the
`allegations in the letter. Id.
` Based upon the TIGTA investigation, the agency is-
`sued an October 24, 2014 notice proposing to remove
`Mr. Sheiman from his position. The notice was based on
`two charges. The first charge was providing false infor-
`mation regarding official time and attendance records. The
`second charge was providing misleading information re-
`garding official time and attendance records. Charge 1
`
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`1 We refer to the Board’s Final Order as its “final de-
`cision.”
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`SHEIMAN v. TREASURY
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`contained 168 specifications, each specifying a date when
`the agency alleged Mr. Sheiman played golf during his duty
`hours, during the time period August 4, 2006, through Au-
`gust 9, 2013. J.A. 26. Charge 2 contained 29 specifications,
`each specifying a date during the time period May 23, 2007,
`through July 18, 2013. On these dates, the agency charged,
`Mr. Sheiman played golf when he had requested, and had
`taken, sick leave. Id.
`On February 3, 2015, Stephen C. Whiteaker, the
`agency’s deciding official for the proposed removal, issued
`a notice sustaining all of the specifications in both Charge
`1 and Charge 2. In addition, Mr. Whiteaker found that re-
`moval was the appropriate penalty for each of the charges.
`J.A. 133–34. Mr. Sheiman was removed from the agency
`effective February 6, 2015. Thereafter, he timely appealed
`to the Board.
`
`II
`to whom
`(“AJ”)
`judge
`administrative
`The
`Mr. Sheiman’s appeal was assigned conducted a hearing on
`October 1–2, 2015. Subsequently, on August 1, 2016, the
`AJ issued an initial decision. Sheiman v. Dep’t of the Treas-
`ury, No. SF-0752-15-0372-I-2, 2016 WL 4161767 (M.S.P.B.
`Aug. 1, 2016); J.A. 24–55. In her initial decision, the AJ
`ruled (1) that Charge 1 was not sustained; (2) that eight of
`the 29 specifications of providing misleading information
`in Charge 2 were sustained; and (3) that Mr. Sheiman’s re-
`moval should be mitigated to a 30-day suspension. J.A. 36–
`37, 40–42, 48.
`Regarding Charge 1, the AJ stated:
`Based on the totality of the circumstances, consid-
`ering the appellant’s plausible explanation of his
`misunderstanding [regarding time and attendance
`reporting], the other record evidence corroborating
`his understanding, and the lack of circumstantial
`evidence from which an intent to defraud could be
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`SHEIMAN v. TREASURY
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`inferred, I find the agency did not show he intended
`to defraud or deceive the government when he com-
`pleted his time and attendance records.
`Id. at 36.
`Considering Charge 2, the AJ found, with respect to
`each of the eight specifications she sustained, that
`Mr. Sheiman took sick leave on days when he was not seek-
`ing medical treatment and was not medically incapaci-
`tated. She also found that, in doing so, he “knowingly
`provided inaccurate information on his time and attend-
`ance records.” Id. at 42. The AJ stated that Mr. Sheiman
`“knew or should have known that paid sick leave was for
`illness or medical treatment, not for engaging in a recrea-
`tional activity or sport such as golfing” and that, “as a fed-
`eral employee, he knew or should have known that he
`needed to take annual leave for recreational activities or a
`sport such as playing golf.” Id. at 41–42.
`As noted, though, the AJ mitigated the agency’s pen-
`alty of removal to a 30-day suspension. She did so because
`she determined that the penalty of removal was not within
`the parameters of reasonableness. Id. at 46. The AJ began
`by stating that she agreed with Mr. Whiteaker that
`Mr. Sheiman had committed a serious offense when he
`took sick leave and played golf, especially given the nature
`of his position, which involved a great deal of trust due to
`the lack of on-site supervision. Id. at 47. “However,” she
`continued, “there are strong mitigating factors here, in-
`cluding the appellant’s potential for rehabilitation.” Id. In
`addition, the AJ noted that Mr. Sheiman “was remorseful
`and acknowledged that he made mistakes in his time and
`attendance practices.” Id. The AJ also noted that, imme-
`diately following his interview with the TIGTA investiga-
`tor
`in February 2014, Mr. Sheiman contacted his
`supervisor for instructions regarding how to accrue, use,
`and properly record his hours and that he complied with all
`time and attendance requirements from that time until his
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`removal. Further, the AJ observed that most of the in-
`stances of Mr. Sheiman requesting sick leave to golf oc-
`curred about four years before his removal. Id. And
`finally, the AJ noted that Mr. Sheiman had faced no other
`disciplinary actions during his nine years of federal service.
`Id. Taking these several factors into account, the AJ con-
`cluded:
`I find that the penalty of removal exceeds the tol-
`erable limits of reasonableness. Based on the mit-
`igating
`factors[,]
`including
`[the appellant’s]
`potential for rehabilitation, 9 years of service with
`the agency, record of good performance, and lack of
`prior discipline, I find that the agency’s penalty is
`outside the bounds of reasonableness. I find that a
`30-day suspension without pay is the maximum
`reasonable penalty under the circumstances of this
`case.
`Id. at 48 (footnote omitted).
`III
`The agency and Mr. Sheiman, respectively, petitioned
`and cross-petitioned for review. In its petition, the agency
`advanced two grounds. First, it contended that, contrary
`to the AJ’s finding, it proved Charge 1. J.A. 5. Second, it
`argued that, after she sustained eight specifications of
`Charge 2, the AJ erred in mitigating Mr. Sheiman’s re-
`moval to a 30-day suspension. Id. at 6. Relevant here, in
`his cross-petition for review, Mr. Sheiman argued that the
`AJ erred in sustaining Charge 2. Id. He also argued that
`the AJ erred in finding that he knew his use of sick leave
`to play golf was improper and that he knowingly provided
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`inaccurate information on his time and attendance records.
`Id.2
`In its final decision, the Board affirmed-in-part the
`AJ’s initial decision. First, rejecting the agency’s argu-
`ments to the contrary, the Board concluded that the agency
`had failed to prove Charge 1, the falsification charge, be-
`cause it had failed to show that Mr. Sheiman had acted
`with the requisite intent. Id. Specifically, the Board
`“agree[d] with the [AJ] that the agency failed to prove that
`[Mr. Sheiman] intended to deceive or defraud the Govern-
`ment when he completed his time and attendance records.”
`Id. at 7. Viewing the record, the Board found “no suffi-
`ciently sound reasons to disturb the [AJ]’s demeanor-based
`conclusion that [Mr. Sheiman] did not intend to defraud or
`deceive the Government when he completed his time and
`attendance records.” Id. The Board also adopted the AJ’s
`decision to sustain eight of the 29 specifications of provid-
`ing misleading information under Charge 2. Id. at 10.
`Continuing, however, the Board determined that the AJ
`had erred in mitigating Mr. Sheiman’s penalty from re-
`moval to a 30-day suspension. It therefore reinstated the
`removal. Id. at 11.
`In reinstating the agency’s penalty, the Board found
`that the AJ had erred in revisiting the penalty assessment
`when the deciding official had determined that removal
`was appropriate for each charge independently. Id. at 12.
`Most importantly, the Board also found that the AJ had
`erred in her consideration of the pertinent Douglas fac-
`tors.3 In that regard, the Board began by stating that it
`
`2 Mr. Sheiman also cross-petitioned for review of a
`ruling by the AJ with respect to a debt collection dispute
`between himself and the agency. J.A. 17. That matter is
`not before us.
`3
`In Douglas v. Veterans Administration, 5 M.S.P.R.
`280, 305–06 (1981), the Board listed twelve factors that it
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`disagreed with the AJ’s assessment of Mr. Sheiman’s po-
`tential for rehabilitation (Douglas factor 10). The Board
`noted that the AJ had found that Mr. Sheiman was re-
`morseful, that he had acknowledged that he made mis-
`takes in his time and attendance practices, and that he had
`complied with all time and attendance requirements after
`his first interview with the TIGTA investigator. Id. And,
`the Board stated, “[w]e discern no basis to disturb the
`[AJ’s] credibility determination that the appellant ex-
`pressed sincere remorse for some of his conduct.” Id. at 13.
`Nevertheless, the Board found that the AJ had failed to
`consider all of the relevant evidence in concluding that
`Mr. Sheiman could be rehabilitated and that therefore this
`finding was not entitled to deference. Id.
`First, regarding remorse, the Board pointed out that
`the AJ did not consider that Mr. Sheiman only admitted to
`his “timekeeping errors” after being confronted about them
`during the TIGTA investigation. The Board stated that
`this warranted a reduction in the weight accorded this fac-
`tor. Id. (citing Saiz v. Dep’t of the Navy, 122 M.S.P.R. 521,
`¶ 13 (2015) (concluding that an appellant’s expressions of
`remorse should be given reduced weight because he made
`them only after his misconduct was discovered) and Sin-
`gletary v. Dep’t of the Air Force, 94 M.S.P.R. 553, ¶ 15
`(2003) (explaining that the timing of expressions of re-
`morse is relevant in assessing rehabilitation potential),
`aff’d, 104 F. App’x 155 (Fed. Cir. 2004)). Second, the Board
`noted that Mr. Sheiman’s admissions only concerned the
`unproven misconduct set forth in Charge 1, the falsification
`charge. Id. Turning to Charge 2, the Board noted that
`
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`deemed relevant for consideration in determining the ap-
`propriateness of a penalty. We have endorsed the use of
`the Douglas factors in penalty determinations. See Rodri-
`guez v. Dep’t of Veterans Affs., 8 F.4th 1290, 1302–03 (Fed.
`Cir. 2021) (collecting cases).
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`Mr. Sheiman had “never owned up to his misuse of sick
`leave or expressed any remorse for his lack of candor in the
`matter.” Id. While the Board acknowledged some mitigat-
`ing factors, such as Mr. Sheiman’s nine years of service and
`his consistently above-average performance (Douglas fac-
`tors 3 and 4), it concluded that removal was within the tol-
`erable limits of reasonableness for what it viewed as
`Mr. Sheiman’s “sustained misconduct.” Id. at 14. In arriv-
`ing at this conclusion, the Board observed that, by know-
`ingly providing inaccurate information on his time and
`attendance records, Mr. Sheiman had demonstrated a lack
`of candor, a serious offense striking at the heart of the em-
`ployer-employee relationship. This was particularly so, the
`Board pointed out, considering the nature of Mr. Sheiman’s
`position, in which Mr. Sheiman often worked remotely and
`was in a position of public trust that required him to have
`contact with the public. Id. The Board noted that these
`considerations led the deciding official to lose trust in
`Mr. Sheiman, which the Board viewed as an aggravating
`factor. Id. at 15.
`Finally, the Board stated that, to the extent the AJ
`found mitigation appropriate because lesser penalties were
`available, it disagreed with her. The Board noted that re-
`moval was within the range of penalties in the IRS’s Guide
`to Penalty Determinations and that the Guide states that
`“[p]ersons in positions of trust, or who deal directly with
`taxpayers, can be held to higher standards.” Id.; J.A. 109.
`In conclusion, the Board stated:
`Having carefully considered the evidence and
`weighed the pertinent Douglas factors as a whole,
`we discern no basis to disturb the determination of
`the deciding official that removal is a reasonable
`penalty for the sustained charges and specifica-
`tions. Although the appellant has 9 years of good
`performance and demonstrated remorse, we find
`that these factors are outweighed by the nature
`and seriousness of his offense as it relates to his
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`position, duties, and responsibilities, particularly
`considering his employment by the IRS and the
`level of trust that is required for a Senior Ap-
`praiser.
`J.A. 16–17.
`
`IV
`We must set aside a Board decision if it is “(1) arbi-
`trary, capricious, an abuse of discretion, or otherwise not
`in accordance with law; (2) obtained without procedures re-
`quired 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).
`V
`A
`Mr. Sheiman makes two arguments on appeal. First,
`citing Purifoy v. Department of Veterans Affairs, 838 F.3d
`1367 (Fed. Cir. 2016), he claims that when the Board rein-
`stated the penalty of removal, it erred because it failed to
`defer to the AJ’s demeanor-based credibility findings.
`Pet’r’s Br. 19–24, 27–28; Pet’r’s Reply Br. 8–14. Purifoy
`stands for the proposition that when an AJ’s findings about
`an appellant’s propensity for rehabilitation “are neces-
`sarily intertwined with issues of credibility and an analysis
`of his demeanor at trial,” they deserve deference from the
`Board. 838 F.3d at 1373. The problem with Mr. Sheiman’s
`argument is that his case does not present a Purifoy situa-
`tion. In Part III above, we have described the Board’s final
`decision at length. From that description, it is clear that
`the Board did not fail to defer to the AJ’s credibility deter-
`minations. On the contrary, as seen, the Board accepted
`those determinations. However, after deferring to the AJ’s
`credibility determinations, the Board went on to hold that
`the AJ had erred in her weighing of the Douglas factors
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`relating to Mr. Sheiman’s potential for rehabilitation. In
`Haebe v. Department of Justice, 288 F.3d 1288, 1302 (Fed.
`Cir. 2002), we said that “[w]hen the demeanor-based defer-
`ence requirement is not in play, the MSPB is free to re-
`weigh the evidence and substitute its own decision as to the
`facts or the law commensurate with the substantial evi-
`dence standard.” Here the Board accepted the AJ’s de-
`meanor-based credibility determinations. Then, however,
`it substituted its own decision for that of the AJ on the is-
`sue of mitigation of the penalty. In short, the Board did
`what in Haebe we said it could do. It thus committed no
`error. We therefore reject Mr. Sheiman’s first argument.
`B
`Mr. Sheiman’s second argument is that the Board
`erred in finding that the IRS Penalty Guide provided for
`removal for a first offense of providing misleading infor-
`mation regarding official time and attendance records, as
`alleged in Charge 2. Pet’r’s Br. 21. He thus claims that the
`Board’s decision reinstating his removal was arbitrary, ca-
`pricious, and/or an abuse of discretion and constituted clear
`error.
` Id. at 35–36.
` In making this argument,
`Mr. Sheiman points out that, in its final decision, the
`Board apparently relied on the 2007 version of the Guide.
`The 2007 version of the Guide, Mr. Sheiman notes, did pro-
`vide for a “written reprimand to removal” for a first offense
`of “false statements, misrepresentation, or fraud in entitle-
`ment, including providing false information concerning
`time, leave, travel, or other entitlements.” J.A. 119 (capi-
`talization altered). He further notes, however, that the
`2012 version of the Penalty Guide, which was in effect
`when he was removed, provided for a punishment of “writ-
`ten reprimand” to a “20-day suspension” for a first offense
`involving the same acts. J.A. 87 (capitalization altered).
`Mr. Sheiman thus urges that the maximum penalty that
`should have been imposed upon him with respect to Charge
`2 was a 20-day suspension.
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`We do not agree. While Mr. Sheiman correctly points
`out the difference between the 2007 and the 2012 Guides,
`the Board’s confusion in this regard was at most harmless
`error. See Sistek v. Dep’t of Veterans Affs., 955 F.3d 948,
`957 (Fed. Cir. 2020); Haebe, 288 F.3d at 1309; Kewley v.
`Dep’t of Health and Human Servs., 153 F.3d 1357, 1366
`(Fed. Cir. 1998). First of all, the 2012 version of the Pen-
`alty Guide states, in bold letters: “The range of penalties
`should serve as a guide ONLY, not a rigid standard. Devi-
`ations from the guide are permissible and greater or lesser
`penalties than suggested may be imposed.” J.A. 77. Simi-
`lar language appeared in the 2007 version of the Guide.
`J.A. 107. Moreover, both the 2012 and the 2007 version of
`the Penalty Guide state that “[p]ersons in positions of
`trust, or who deal directly with taxpayers, can be held to
`higher standards.” J.A. 102, 109. As noted above in Part
`III, the Board pointed out that Mr. Sheiman was in a posi-
`tion of trust and dealt with the public, and the deciding of-
`ficial testified that he lost confidence in Mr. Sheiman. We
`decline to disturb the reinstatement of Mr. Sheiman’s re-
`moval on account of the Board’s apparent reliance on the
`language in the 2007 version of the Penalty Guide.
`We have considered Mr. Sheiman’s remaining argu-
`ments and have found them not persuasive.
`CONCLUSION
`For the foregoing reasons, we affirm the final decision
`of the Board.
`
`AFFIRMED
`COSTS
`
`No costs.
`
`