United States v. SmithUnited States v. Smith
Affirmed by published per curiam opinion. Judge MICHAEL wrote a dissenting opinion.
COUNSEL
OPINION
PER CURIAM:
Appellant, Alfred Smith, appeals his conviction for embezzling, stealing,
The district court held that aggregation of Smith‘s individual offenses was proper because each was part of a single scheme or plan. For the reasons that follow, we affirm.
I.
On January 24, 2003, a Grand Jury returned a one-count indictment against Smith, charging:
Estelle Smith died on February 4, 1994. The defendant, ALFRED SMITH did not report the death of Estelle Smith to the Social Security Administration and continued on a monthly basis to receive Estelle Smith‘s monthly Social Security benefits until February 3, 1998. Beginning in or about March 1994, and continuing until in or about February 1998, in the Eastern District of Virginia and elsewhere, the defendant ALFRED SMITH, did knowingly, intentionally and willfully embezzle, steal, purloin and convert to his own use, on a recurring basis, a record, voucher, money and thing of value belonging to the Social Security Administration, to wit: Social Security Administration benefits issued to Estelle Smith, totaling approximately $26,336.00.
(In violation of
Title 18, United States Code, Section 641 ).
From March 1994 through February 1998, 48 payments were electronically deposited into Smith‘s joint account with his mother; each deposit was between $525 and $583. In all, Smith received approximately $26,336 after his mother‘s death.
Smith wrote checks and withdrew funds from the account. When interviewed by SSA agents, Smith admitted writing numerous checks on the account and acknowledged that he knew it was wrong for him to receive the benefit payments after his mother‘s death.
II.
The purpose of a statute of limitations is to limit exposure to criminal prosecution following an illegal act. Toussie v. United States, 397 U.S. 112, 114 (1970). A statute of limitations protects individuals from having to defend against charges “when the basic facts may have become obscured by the passage of time,” and minimizes “the danger of official punishment because of acts in the far-distant past.” Id. at 114-15.
Statutes of limitations should not be extended “‘except as otherwise expressly provided by law.‘” Id. at 115 (quoting
But we must first decide whether Smith‘s charged conduct was properly aggregated into a single count. In determining whether a series of takings are properly aggregated, the court must examine the intent of the actor at the first taking. United States v. Billingslea, 603 F.2d 515, 520 (5th Cir. 1979). If the actor formulated “a plan or scheme or [set] up a mechanism which, when put into operation, [would] result in the taking or diversion of sums of money on a recurring basis,” the crime may be charged in a single count. Id.
Smith‘s failure to report his mother‘s death evidences the intent to establish a mechanism for the automatic and continuous receipt of funds for an indefinite period. Smith‘s criminal conduct was patterned and methodical. Therefore, the indictment properly aggregated his charged conduct into one count.
The indictment charges the acts of its single count in the conjunctive. See J.A. 46-47 (alleging that Smith “did knowingly . . . embezzle, steal, purloin, and convert to his own use” the funds at issue) (emphasis added). But given that
We think that it can; the nature of embezzlement is such that Congress must have intended that, in some circumstances, it be treated in
Although many state embezzlement statutes require that the embezzled property be acquired through some relationship of trust, it is not a universal requirement. See 3 Wayne R. LaFave, Substantive Criminal Law § 19.6 (2d ed. 2003) (noting that while, “in general, [embezzlement] may be defined as: (1) the fraudulent (2) conversion of (3) the property (4) of another (5) by one who is already in lawful possession of it,” ”some statutes limit the scope of embezzlement by requiring that the property be ‘entrusted’ . . . to the embezzler“) (emphasis added). We do not think that
Indeed, the classic definition of “embezzlement” set forth in Moore v. United States, 160 U.S. 268, 269-70 (1895) implicitly suggests that lawful possession need not be acquired through a relationship of trust. The Moore Court, interpreting a precursor to
If the distinction made by this phrasing were not enough, the reasoning set forth in Moore firmly supports the conclusion that a fiduciary relationship is not an essential element of embezzlement. Moore involved a challenge to an indictment for embezzlement under the Act of March 3, 1875 (“the 1875 Act“) based, in part, on the ground that while the indictment named the defendant as a post office employee, it did not allege that the embezzled government monies “came into the possession of the defendant by virtue of his employment.” Id. at 270. In assessing the requirements for embezzlement under the 1875 Act, the Court discussed several earlier state and English cases that made the existence of a fiduciary or other employment relationship a necessary element of embezzlement. Id. at 270-73.
The Moore Court explained that “[t]he ordinary form of an indictment for larceny” simply would require a sufficiently specific “allegation that the defendant stole, took, and carried away certain specified goods belonging to the person named,” without regard to a particular relationship between the thief and the victim. Id. at 273. Notably, the prohibitions of the 1875 Act “applie[d] to ‘any person,’ and use[d] the words ‘embezzle, steal, or purloin’ in the same connection, and as applicable to the same persons and to the same property.” Id. In contrast, “[t]he cases reported from the English courts and from the courts of the several states have usually arisen under statutes limiting the offense to certain officers, clerks, agents, or servants of individuals or corporations.” Id. at 272; see also LaFave, supra, § 19.6 (noting the distinction between the specificity of embezzlement statutes historically and the “modern view” which “is to make it embezzlement . . . fraudulently to convert another‘s property in one‘s possession,” avoiding “the danger of omitting someone who ought to be included” from the list of persons covered by an embezzlement statute). The Court concluded that cases interpreting the requirements for embezzlement under more specific statutes “are not wholly applicable to a statute [such as the 1875 Act] which extends to every person, regardless of his employment.” 160 U.S. at 272 (emphasis added). Rather, the Moore court, although eventually holding the indictment defective on a different ground, went only so far as to say that, as to the necessary relationship for an embezzlement indictment under the 1875 Act, “the rules of good pleading would suggest, even if they did not absolutely require, that the indictment should set forth the manner or capacity in which the defendant became possessed of the property.” Id. at 274 (emphasis added).
An indictment alleging embezzlement under the current form of that statute, i.e., under
Our opinion in United States v. Stockton, 788 F.2d 210 (4th Cir. 1986), which dealt not with
[t]he crime of embezzlement builds on the concept of conversion, but adds two further elements. First, the embezzled property must have been in the lawful possession of the defendant at the time of its appropriation. Second, embezzlement requires knowledge that the appropriation is contrary to the wishes of the owner of the property.
Id. at 216-217 (emphasis added). Notably, the court did not enunciate any requirement that a defendant‘s lawful possession be acquired through a relationship of trust, despite our recognition only a page earlier that prosecuting conversions made after gaining lawful possession through some fiduciary capacity was a motivating force for the creation of many embezzlement statutes.
The fact remains that Congress has seen fit to enact numerous statutes criminalizing various forms of embezzlement, and all indications are that where Congress has thought a particular capacity or relationship to be a necessary element of embezzlement in a given circumstance, it has specified as much in the statute. See, e.g.,
Accordingly, we believe that if an indictment for embezzlement under
As a joint owner of the checking account, Smith had legal control over the funds therein, including the ability to withdraw the full amount of such funds. See
Smith‘s lawful right to control the funds after their initial deposit in his account distinguishes his possession from that which follows a common-law larceny, in that Smith‘s possession did not require a “trespass in the taking“; rather, the government voluntarily, though incorrectly, continued to deposit his mother‘s Social Security benefits into their jointly owned checking account after her death. See LaFave, supra, §§ 19.2, 19.6 (explaining this distinction between larceny and embezzlement); Moore, 160 U.S. at 269-70 (“[Embezzlement] differs from larceny in the fact that [with embezzlement] the original taking of the property was lawful, or with the consent of the owner . . . .“). In the present case, however, the indictment can be fairly construed to aver a charge of embezzlement that could be proven, without surprise to Smith, by evidence showing that Smith, having legal possession of the funds as they were initially deposited into his account, then, after realizing that his continued possession was improper, willfully retained the funds for his own use, and maintained that recurring, automatic scheme of embezzlement during the charged period.
Embezzlement is the type of crime that, to avoid detection, often occurs over some time and in relatively small, but recurring, amounts. See, e.g., MacEwen v. State, 71 A.2d 464, 468-69 (Md. 1950) (“While embezzlement is sustained by the diversion of a single sum of money at a particular time, in many cases it runs for a long period of time and consists of converting different sums of money on many dates to the use of the thief.“). At least in those cases where the defendant created a recurring, automatic scheme of embezzlement under
And, of course, that is precisely what Smith has done, a conclusion that is supported by our analysis under Billingslea. Accordingly, we believe that the specific conduct at issue here is more properly characterized as a continuing offense rather than a series of separate acts. The facts found by the district court were sufficient to prove that he set into place and maintained an automatically recurring scheme whereby funds were electronically deposited in his account and retained for his own use without need for any specific action on his part, a scheme which continued from his mother‘s death until payments were terminated in February of 1998.
This is not to say that all conduct constituting embezzlement may necessarily be treated as a continuing offense as opposed to merely “a series of acts that occur over a period of time“; indeed, it may well be that different embezzlement conduct must be differently characterized in this regard. Nor do we lightly dismiss the dissent‘s citation to cases from other circuits that might require a different conclusion as to the application of the “continuing offense” doctrine. We are satisfied, however, that in addition to being properly aggregated into a single count, the particular kind of embezzlement that occurred in this case is correctly considered, under Toussie, to be a continuing offense.
Smith‘s embezzlement scheme concluded on February 3, 1998. The Grand Jury returned an indictment against him on January 24, 2003, within five years of the final deposit of social security funds. Smith‘s indictment, therefore, was timely.
For the reasons discussed above, we conclude that Smith‘s conduct constituted a single continuous scheme to embezzle government funds and was of a nature that Congress must have intended that it be treated as a continuing offense. Accordingly, the judgment of the district court is
AFFIRMED.
MICHAEL, Circuit Judge, dissenting:
The majority‘s opinion concludes that a particular offense, in this case embezzlement, may be treated as either a continuing offense or a non-continuing offense for statute of limitations purposes, depending on how the crime is carried out. See ante at 9-10. Because I do not believe this conclusion is consistent with the teachings of Toussie v. United States, 397 U.S. 112 (1970), I respectfully dissent. Toussie begins with a word of caution from the Supreme Court: “the doctrine of continuing offenses should be applied in only limited circumstances.” Id. at 115. The Court held that an offense should be considered continuing for statute of limitations purposes only if “[1] the explicit language of the substantive criminal statute compels such a conclusion, or [2] the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one.” Id. The crime charged in Toussie, failure to register for the draft, was not a continuing offense because (1) “there is no language in [the registration] Act that clearly contemplates a prolonged course of conduct,” id. at 120, and (2) “[t]here is also nothing inherent in the act of registration itself which makes a failure to do so a continuing crime,” id. at 122.
The
There is nothing inherent in the act of embezzlement that makes it a continuing offense. See Toussie, 397 U.S. at 122. Embezzlement is simply a variant of larceny with the additional element that “the original taking of the property was lawful or with the consent of the owner.” Ante at 9. The majority says that embezzlement is frequently conducted “over some time and in relatively small, but recurring, amounts.” Id. But to say that embezzlement is frequently conducted in this way does not alter the substantive (or inherent) nature of the offense. Indeed, the fact that embezzlement can be completed in one distinct transaction undermines the notion that it is inherently a continuing crime. I realize that Congress in some circumstances punishes acts that involve the execution of a scheme, see, e.g.,
I would resolve this case by applying the principles enunciated in United States v. Yashar, 166 F.3d 873 (7th Cir. 1999). There, the Seventh Circuit was presented with facts almost identical to those here. The defendant Yashar was “indicted for a violation of
Yasher compels the conclusion that Alfred Smith was indicted for certain conduct that falls outside the five-year statute of limitations. The indictment was returned on January 24, 2003. It says that “beginning in or about March 1994, and continuing until in or about February 1998 . . . Alfred Smith did knowingly, intentionally and willfully embezzle, steal, purloin and convert to his own use, on a recurring basis, a record, voucher, money, and thing of value belonging to the Social Security Administration, to wit: Social Security Administration benefits issued to Estelle Smith totaling approximately $26,336.00.” It appears that Smith received these monies in an amount between $525.00 and $583.00 on or about the 3rd of each month. Under