United States v. Aaron Osborne, 886 F.3d 604

Osborne, an Air National Guard full‑time recruiter, was convicted for aiding and abetting an RA (Andolsek) who received G‑RAP recruiting payments and paid kickbacks; conviction under 18 U.S.C. § 641 and § 2 (Count 4). Andolsek pleaded guilty and testified at trial. Jury convicted Osborne on Count 4 and acquitted on other counts; Harleston acquitted.
G‑RAP was a DOD‑funded program run by private contractor Docupak, which paid Recruiting Assistants (RAs) for leads; RAs received prepaid cards after enlistment and basic training milestones.
Prosecution argued payments were "money or a thing of value of the United States" because DOD created and funded G‑RAP, Docupak invoiced and was reimbursed by the government, and Docupak’s program materials and task order reflected federal oversight.
Defense argued funds were Docupak’s private funds when disbursed, governed by Docupak rules (e.g., fee‑splitting prohibition), not enforceable federal regulations, and the government did not retain sufficient control or a reversionary interest to make the funds federal property.
The district court denied Osborne’s post‑trial Rule 29 motion; this court reviews sufficiency of evidence de novo for whether funds were "of the United States." The Sixth Circuit reversed: holding government failed to show sufficient governmental supervision and control for funds to retain federal character, and reversed conviction and vacated sentence.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether funds paid to Docupak/RAs were "money or a thing of value of the United States" under § 641	Funds were federal because DOD created/funded G‑RAP, Docupak invoiced for reimbursement, program materials and task order showed federal restrictions/oversight	Funds had passed into private hands (Docupak) with minimal federal control; restrictions (e.g., fee‑splitting) were Docupak’s rules, not enforceable federal regulations; no reversionary interest or audit/enforcement shown	Reversed: insufficient evidence of government supervision/control for funds to retain federal character; no reasonable jury could find federal ownership beyond a reasonable doubt
Whether evidence established theft/embezzlement/conversion of government property (sufficiency of proof of the substantive offense)	If funds were government property, acts of representing recruits and paying kickbacks constituted theft/embezzlement	Same as above plus challenge that the theft occurred from Docupak not government; however defendant failed to preserve some specific arguments at trial	Court declined to entertain a new specificity argument on appeal (issue not preserved); but reversal was based on ownership defect, so conviction vacated

United States v. Hall, 549 F.3d 1033 (6th Cir.) (analysis focuses on whether government retained control over contractor funds so they remain federal property)
United States v. Foulks, 905 F.2d 928 (6th Cir.) (FEMA funds retained federal character where agency limited uses, required reporting, and retained reversionary interest)
United States v. Littriello, 866 F.2d 713 (4th Cir.) (contract/regulatory requirements, audit rights, and reversionary interest supported federal ownership)
United States v. McKay, 274 F.3d 755 (2d Cir.) (HUD’s layered regulatory controls over grantee and subrecipients made funds federal)
United States v. Wheadon, 794 F.2d 1277 (7th Cir.) (HUD’s reporting, inspection, and approval rights indicated sufficient government control)
United States v. Johnson, 596 F.2d 842 (9th Cir.) (federal grant conditions and required accounting supported federal character of funds)
United States v. Forman, 180 F.3d 766 (6th Cir.) (elements of a § 641 offense)
Jackson v. Virginia, 443 U.S. 307 (1979) (standard for reviewing sufficiency of evidence)