Michael E. Sheiman v. Department of the Treasury

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
MICHAEL E. SHEIMAN,
Petitioner
v.
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
______________________
G EORGE CHUZI, Kalijarvi, Chuzi, Newman & Fitch, PC,
Washington, DC, argued for petitioner. Also represented
by AARON H. SZOT .
STEPHANIE F LEMING, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for respondent. Also represented by
REGINALD T HOMAS BLADES , J R., BRIAN M. B OYNTON,
P ATRICIA M. MC CARTHY .
______________________
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SHEIMAN v. TREASURY 2
Before P ROST , SCHALL , and REYNA, Circuit Judges.
SCHALL , Circuit Judge.
D ECISION
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.
D ISCUSSION
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
1 We refer to the Board’s Final Order as its “final de-
cision.”
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SHEIMAN v. TREASURY 3
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
The administrative judge (“AJ”) to whom
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 4
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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SHEIMAN v. TREASURY 5
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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SHEIMAN v. TREASURY 6
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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SHEIMAN v. TREASURY 7
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
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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SHEIMAN v. TREASURY 8
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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SHEIMAN v. TREASURY 9
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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SHEIMAN v. TREASURY 10
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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SHEIMAN v. TREASURY 11
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.
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