Lead Opinion
The defendant-appellant, William Croft, appeals his conviction for one count of knowingly and unlawfully converting, to his own use, a “thing of value” of the Environmental Protection Agency (the services of Laurel Johnson), in violation of 18 U.S.C. § 641 (1982). We affirm.
I
The record reveals that in June 1980, the defendant, William Croft, was employed as an assistant professor in the Department of Veterinary Sciences at the University of Wisconsin-Madison. As a result of his extensive research in the area of urinary bladder cancer in animals, Croft had developed an interest in the carcinogenic (cancer causing) effects of asbestos. On June 30, 1980, Croft submitted a grant proposal to the Environmental Protection Agency (“EPA”) outlining a research project “to examine mesothelioma in dairy calves as a potential monitor for asbestos and as an index of the extent of environmental hazard from exposure to asbestos.” Mesothelioma is a cancerous tumor that often develops in the abdominal and chest areas of humans and animals after exposure to asbestos. Historically, the incidence of mesothelioma in dairy calves is rare, however, according to Croft’s EPA proposal there were seven cases of the disease reported between January 1, 1977 and December 31, 1978, at a meat packing plant in Edgar, Wisconsin. In light of this evidence, Croft planned to obtain cancerous cattle tissue from area meat packers and test that tissue for mesothelioma. If the test proved positive, the cattle would be traced to their farm of origin where the water supply and cattle feed would be analyzed for asbestos content.
In September 1980, the EPA approved Croft’s proposal and forwarded $130,991 in grant funds to the Office of Research Administration at the University of Wisconsin-Madison. The University held the funds in a special EPA account (UW Fund Account Number 144-Q386) and agreed with the EPA to disburse those funds only for expenses incurred during the course of the two-year EPA research project. The EPA designated Croft as the “principal investigator,” or coordinator of the project, responsible for supervising and contributing expert research, as well as submitting
Some five months later, in January 1981, Croft became involved in a separate and completely independent asbestos research project. While visiting his hometown of Crivitz, Wisconsin, Croft learned that town officials in nearby Weston, Wisconsin were concerned about a possible asbestos problem in the Weston water system. The town’s Department of Public Works had evidence that the underground water pipe, made of cement and asbestos, was corroding and releasing asbestos fibers into Weston’s water supply. Croft arranged a meeting with the Weston attorney and the director of Public Works to discuss the twenty-three miles of concrete pipe that carried water to the residents of Weston. At the meeting, Croft informed the Weston representatives of his experience in asbestos-related research and his ability to perform the highly technical and scientific experiments needed to ascertain the asbestos content in the town’s water supply.
In that same month, January 1981, Croft completed his search for a project specialist on the EPA-funded study, hiring Nijole Caplenas, a recent graduate from the University of Wisconsin with a Masters degree in microbiology medicine, to aid him in collecting and analyzing data for the two-year project. Caplenas’ duties initially consisted of performing water chemistries (including tests for the pH factor, alkalinity, hardness, and aggressiveness index) and learning the proper method of analyzing water samples to determine their asbestos count.
In March 1981, Croft again traveled to Weston, Wisconsin; this time to meet with the town board and discuss his proposal for measuring the level of asbestos in the town’s water supply. Croft assured the board that he was well-trained in asbestos research and capable of performing the highly technical process of counting asbestos particles. Croft further informed the board that he had received permission from his superiors at the University of Wisconsin-Madison to conduct the Weston research project and to use the University’s advanced research facilities, on the condition that he reimburse the school for their expenses. The following month, in April 1981, the town board hired Croft at a fee of $75.00 an hour, to complete a thorough test of the asbestos content in the Weston water supply by September 1, 1981. The town's attorney requested that Croft personally perform all of the research and scientific procedures because in the event of a lawsuit against the concrete pipe manufacturer, Johns-Manville Corp., Croft would have to substantiate his expert data and account for the water samples’ chain of custody at trial.
Following the meeting in April with the Weston town board, Croft returned to the University of Wisconsin-Madison and informed Caplenas, the EPA project specialist, that additional water samples would be arriving from Weston for her to analyze. Caplenas responded that she was busy examining cancerous cattle tissue for the.
In June 1981, Laurel Johnson, an undergraduate student in the animal sciences program at the University of Illinois-Champaign who was living in Madison, Wisconsin for the summer, contacted Croft concerning her interest in obtaining research-related summer employment. According to Johnson, Croft explained that he had an opening for a research assistant to perform water chemistries and analyze water samples taken from Weston, Wisconsin. Johnson accepted Croft’s offer and was employed from June to mid-August of 1981, during which time she performed water chemistries on the Weston water samples, analyzed the asbestos count of those samples, and recorded the results in a laboratory log book. In early August 1981, Croft asked Johnson if she would remain in Madison for the upcoming fall semester in order that she might complete her research on the Weston water samples. Johnson declined the offer and returned to the University of Illinois-Champaign. Following Johnson’s return to Illinois, Croft directed James Williams to educate himself in the scientific procedures and techniques required to perform water chemistries and asbestos counts. According to the University of Wisconsin payroll records, Johnson received $1,988.45 from the special EPA account for her summer research, assistance on the Weston asbestos research project.
Throughout the summer of 1981, the Weston officials pressured Croft for the re-suits of his asbestos tests, as the residents of Weston were aware and fearful of the possible carcinogenic problem in the town’s water supply. See, e.g., The Daily Herald, Wausau-Merrill, Wis., February 11, 1982, at 19. Croft explained that his test results were delayed because he had to personally perform the time-consuming water filtration and asbestos count for each water sample. Croft failed to complete the Weston project by the September 1,1981 deadline, and during the following months of September and October the town attorney repeatedly requested that Croft provide the town board with progress reports. Finally, on October 29, 1981, Croft submitted water chemistries of 134 water samples, asbestos counts for twenty-three of those samples, and other pertinent data, to the town board.
The following month, in November 1981, James Williams was forced to withdraw from his research position, due to a recurring physical illness. As a result of his employment with Croft, Williams earned $13,685.00 during 1981 and according to the University of Wisconsin payroll records, a substantial amount of that payment was made from the special EPA account. Sometime during the fall of 1981, Croft telephoned Laurel Johnson at the University of Illinois, asking “if [she] had been contacted by anyone from the University [of Wisconsin] ... [Regarding the summer work ____” Johnson responded that she had informed an auditor from the University of Wisconsin that she “had been doing work for the summer for Dr. Croft.” In February 1982, Nijole Caplenas resigned from her position as the project specialist for the EPA study in order that she might pursue new career objectives. According to the University of Wisconsin payroll
Once the EPA officials became aware of Croft’s private asbestos project for the town of Weston, they commenced an investigation into whether or not EPA funds were disbursed in payment for research on that project. The evidence obtained during that investigation was presented to a Federal Grand Jury, and on March 2, 1983, the Grand Jury returned a three-count indictment against Croft for knowingly converting, to his own use, the services performed by James Williams, Laurel Johnson, and Nijole Caplenas on the Weston research project and paid for with EPA funds, in violation of 18 U.S.C. § 641. Croft pled not guilty to all three counts of the indictment. Some two months later, on April 27, 1983, the Grand Jury filed a superseding three-count indictment alleging that Croft knowingly and unlawfully converted the services of Williams, Johnson, and Caplenas to his own use in violation of 18 U.S.C. § 641. On August 8, 1983, the Government filed a bill of particulars to clarify the indictment and notify Croft that the relevant time frame included the period during which Williams, Johnson, and Caplenas “worked under the direction of the defendant [Croft], and during which time the defendant converted [their] services____” The case proceeded to trial and Croft claimed, as a defense, that the water chemistries and asbestos counts performed by the three research assistants on the Weston water samples were simply training procedures that allowed the students to refine the techniques required for the successful completion of the EPA project. Croft claimed that none of the research assistants’ calculations nor work products were forwarded to the Weston town board. However, upon cross-examination, Croft was unable to explain the presence of Johnson’s calculations in the data submitted to the town board.
Based upon the evidence presented at trial, the jury found Croft guilty on one of the three counts of the indictment; eonverting, to his own use, the services performed by Laurel Johnson and paid for with EPA funds. On November 25, 1983, Croft was sentenced to one year imprisonment, fined $5,000, and ordered to pay restitution in the amount of $2,955.13 to the United States Government. On appeal, Croft initially contends that the services of Laurel Johnson are not a “thing of value” as that phrase is used in 18 U.S.C. § 641. In the alternative, Croft claims that the indictment was insufficient because it failed to allege the element of specific intent that is required for prosecution under 18 U.S.C. § 641. Finally, Croft contends that the district court erred in admitting evidence of the payroll account records, in failing to properly instruct the jury on Croft’s defense and the elements of a section 641 offense, and in failing to provide the jury with the transcripts of requested testimony.
II
A. “THING OF VALUE” UNDER 18 U.S.C. § 641
Croft initially contends that his actions do not fall within the purview of 18 U.S.C. § 641, which provides in pertinent part:
“Whoever ... knowingly converts to his own use ... any ... thing of value of the United States ... [s]hall be fined not more than $10,000 or imprisoned not more than ten years, or both; but if the value of such property does not exceed the sum of $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.”
According to Croft, the services of Laurel Johnson do not constitute a “thing of value” as that phrase is used in 18 U.S.C. § 641. To support this position, Croft relies upon the reasoning of the Ninth Circuit in Chappell v. United States,
Our analysis of Croft’s claim under 18 U.S.C. § 641 begins with the Supreme Court’s seminal decision in Morissette v. United States,
The broad scope of 18 U.S.C. § 641 as analyzed by the Supreme Court in Morissette and this court in Bailey has been interpreted by the Federal circuits to include the knowing conversion of intangible “things of value.” For example, in United States v. May,
In United States v. Girard,
Similarly, in United States v. DiGilio,
“We do not, by resting upon the narrower ground that a technical larceny has been proved, intend to imply a rejection of the government’s broader interpretation of § 641____ Much can be said in favor of the government’s argument that Chappell v. United States, supra, is inconsistent with the interpretation of 641 by the Supreme Court in Morissette____”
Id. at 978 (emphasis added). The Third Circuit relied upon the same language quoted by the Eighth Circuit in May, that 18 U.S.C. § 641 applies to acts of “larceny or embezzlement at common law and also acts which shade into those crimes but which, most strictly considered, might not be found to fit their fixed definitions.” DiGilio,
In the present case, Croft improperly converted to his own use a “thing of value,” specifically the services of Laurel Johnson. The record clearly reveals that Johnson, under Croft’s supervision and direction, performed water chemistries on the Weston water samples, analyzed the asbestos count of those samples, compiled detailed calculations, and recorded the data that was later transmitted to the Weston town board. According to the testimony of Weston’s attorney, the town board paid Croft “between $40,000 and $50,000” to conduct the Weston research project. At trial, Croft did not attempt to establish that he paid Laurel Johnson for her services with the funds received from the Weston town board. Rather, the uncontradicted testimony and evidence reveal that the services performed by Johnson in testing the Weston water samples and recording the results in a laboratory log book were paid in full by the EPA.
According to this court’s analysis in Bailey, “the purpose of § 641 ... is to provide a sanction for intentional conduct by which a person either misappropriates or obtains a wrongful advantage from government property.”
B. “KNOWING CONVERSION” UNDER 18 U.S.C. § 641
Croft next claims that even if his actions fall within the purview of 18 U.S.C. § 641, the indictment was insufficient because it only charged Croft with “knowingly and unlawfully” converting the services of Laurel Johnson to his own use. As we have previously noted, the Supreme Court in Morissette interpreted the language of 18 U.S.C. § 641 to include an element of intent. Croft contends that the phrase “knowingly and unlawfully” does not sufficiently and clearly set forth this element of intent as it has been construed for purposes of section 641. Thus, Croft reasons that the insufficient indictment renders the conviction based thereon fatally defective. See, e.g., United States v. Denmon,
In United States v. Watkins,
Our examination of the sufficiency of the indictment in this case is guided by the Supreme Court’s analysis in Morissette that “knowing conversion requires more than knowledge that defendant was taking the property into his possession. He must have had knowledge of the facts, though not necessarily the law, that made the taking a conversion.”
Croft further contends that the indictment is insufficient because it failed to inform him of the “services” that were converted. A review of the record reveals that this claim is likewise without merit. The Government, in response to Croft’s pre-trial motion to dismiss the indictment, filed a bill of particulars clarifying and particularizing that the relevant time frame of the indictment was the period that Williams, Johnson, and Caplenas “worked under the direction of the defendant [Croft], and during which time the defendant converted [their] services.” The Government further explained that the services consisted of Johnson’s “laboratory work on the defendant’s personal project with the Town of Weston” and the “research and laboratory time” spent by Williams and Caplenas “on the defendant’s personal project with the Town of Weston.” The detailed information provided within the Government’s bill of particulars clearly informed Croft of the type of services converted to his own use, and thus we hold that the indictment, as amended, was more than sufficient to charge Croft with a violation of 18 U.S.C. § 641. Accord Watkins,
C. ALLEGED TRIAL ERRORS
Croft next contends that the district court erred in admitting computer printouts, containing the University of Wisconsin’s payroll records, into evidence and in denying Croft access to the computer program. At trial, the Government elicited testimony from Richard Laufenburg, Director of Payroll and Benefits Services at the University of Wisconsin-Madison, that the computer printouts in question were “individual income tax detail summary for the ... calendar year 1981 which reflects the individual payment made to all individuals through the payroll system.”- According to Laufenburg, these computer-gener
It is well-settled that computer data compilations may constitute business records for purposes of Fed.R.Evid. 803(6) and may be admitted at trial if a proper foundation is established. United States v. Young Bros., Inc.,
In the present case, the evidence establishes that the computer printouts in question were maintained and supervised by the Director of the Payroll and Benefits Services at the University of Wisconsin-Madison — one Richard Laufenburg. According to Laufenburg, the printouts were made contemporaneously with or near the time that the payroll data became available, the printouts were kept in the regular course of business, and it was the regular practice of the University of Wisconsin-Madison to make such printouts. Moreover, with regard to the reliability and trustworthiness of the payroll data information entered into the computer and com
The record reveals that defense counsel thoroughly cross-examined Laufenberg concerning the accuracy of the computer and the input procedures. According to the uncontroverted evidence, the computer printouts were reviewed and audited for accuracy on a regular basis throughout the year and also relied upon by the University of Wisconsin-Madison to complete tax forms for the Internal Revenue ’’Service. This evidence, when combined with the fact that the audits performed by Laufenburg’s staff should have “picked up” any errors in the input of payroll information, sufficiently establishes the reliability and trustworthiness of the computer printouts. Thus, in view of the totality of the circumstances we hold that the district court did not abuse its discretion in admitting the printouts into evidence under the hearsay exception of Fed.R.Evid. 803(6).
Croft next claims that the jury instructions concerning his theory of defense were incomplete and thus improper. The district court instructed the jury:
“It is the defendant’s theory of this case that he intended that the work performed upon the Weston water samples by James Williams, Laurel Johnson and Nijole Caplenas was for the purpose of instructing them in the technique of filtering water samples, preparing them for fiber analysis and counting asbestos fibers. The defendant’s additional theory of this case is that the Environmental Protection Agency did not lose the services of James Williams, Laurel Johnson and Nijole Caplenas.
Now, the defendant has no burden to prove these theories. The government has the burden of proving guilt of the defendant beyond a reasonable doubt....”
Croft contends that the district court should have further informed the jury of the consequences of an acquittal, that Croft believed training was permitted under the EPA grant, and that Croft believed he did not submit the calculations and work
The law is well-settled in this circuit that “[a] defendant is entitled to have the jury instructed on his theory of the defense if the defense is supported by the law and the evidence.” United States v. Martin-Trigona,
Croft next contends that the district court erred in instructing the jury on the issue of the EPA’s ownership of the services performed by Williams, Johnson, and Caplenas. Croft erroneously asserts that the district court failed to allow the jury to determine the ownership issue as a question of fact. The district court instructed the jury that for purposes of 18 U.S.C. § 641, the Government was required to prove, beyond a reasonable doubt:
“1. That the defendant converted a thing of value worth in excess of $100, an employee’s services, to his own use;
2. That the services involved belonged to the United States Government by virtue of the employee having been paid with federal money.
3. That the conversion was done knowingly and unlawfully.”
The court added that on the issue of “services belonging to the Federal Government, ... when the University of Wisconsin draws funds to pay an employee in a manner that debits a Federal grant for the amount of funds drawn, the University is acting as an agent of the United States and the funds so drawn are funds of the United States.” This latter instruction properly informed the jury that, as a matter of law, the funds drawn from the special EPA account belonged to the EPA, an executive agency of the United States Government. According to the detailed regulations of 40 C.F.R. § 30.100 et seq., the EPA exercises substantial supervision and control over grant funds, such as those held by the University of Wisconsin-Madison, and thus the funds do, as a matter of law, belong to the EPA. See United States v. Mitchell,
“I think to sequester a jury for several days in this matter is inappropriate. I also believe that because of the publicity that there may very well be, that we certainly wouldn’t want them or I think it would not be wise to have them outside of sequestration for five or six or three or four or how many days it might take to round up the transcripts____”
Accordingly the trial judge informed the jury that the free-lance reporters were unavailable and “that it would not be in order nor appropriate to await the preparation of these transcripts.” The judge added that, “[a]s jurors, you are requested to render your verdict based upon your recollection of all the testimony which has been given and all the exhibits which have been provided.”
The law is well-established in this circuit that “it is within the discretion of the trial court whether to read portions of the trial transcript back to the jury at its request.” United States v. Kuta,
Ill
We affirm the conviction of William Croft for knowingly and unlawfully converting, to his own use, a “thing of value” of the EPA, in violation of 18 U.S.C. § 641.
Notes
. The aggressiveness index is used to calculate the rate at which water will corrode concrete pipes consisting of cement and asbestos, thereby causing the release of asbestos fibers into the water system.
. At trial, Croft claimed that on October 29, 1981, he submitted the results of sixty-six asbestos tests to the Weston town board.
. At trial, the Government asked Croft whether he, in fact, submitted Johnson’s calculations to the Weston town board. Croft replied, "I do not know how it got there.”
. The record reveals that Laurel Johnson's services were paid for out of the special EPA account established by the University of Wisconsin. According to the conditions set forth in the EPA agreement and the regulations enumerated in 40 C.F.R. § 30.100 et seq., the EPA, an executive agency of the United States Government, maintains substantial supervision and control over the funds in that account. Thus, for purposes of our analysis, the EPA paid for Johnson’s services. See United States v. Mitchell,
. The concurring opinion appears to misconstrue our holding with its emphatic statement that “services are not property, at least since the 13th Amendment abolished slavery.” As we state in the text of the opinion, our narrow holding is that "the services rendered by Laurel Johnson on the Weston research project do constitute a ‘thing of value' under 18 U.S.C. § 641.”
. Fed.R.Evid. 803(6) provides, in pertinent part:
“The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
(6) Records of regularly conducted activity. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information, or the method or circumstances of preparation indicate lack of trustworthiness.”
. In Weatherspoon, this court held that computer printouts were properly admitted into evidence following the Government's proof of "what the input procedures were, ... that the input procedures and printouts were accurate within two percent, ... that the computer was tested for internal programming errors on a monthly basis, and ... that the printouts were made, maintained and relied on ... in the ordinary course of ... business activities.”
. The record reveals that this trial was of public importance and had been the subject of a front-page, headline article in the Capitol Times, a local Madison, Wisconsin newspaper.
Concurrence Opinion
concurring.
I concur solely on the basis of stare decisis. In my judgment 18 U.S.C. § 641 has been interpreted in this Circuit as covering “intentional conduct by which a person either misappropriates or obtains a wrongful advantage from government property.” U.S. v. Bailey,
The indictment charges defendant with wrongful and unlawful conversion of services, to wit the labor performed for defendant’s financial advantage (testing water samples) by persons paid by government funds to work on a different project (testing cattle tissues). Defendant thus obtained a wrongful advantage, indirectly, from government property, to wit the funds used to pay defendant’s helpers. But I doubt whether conversion of services is a violation of § 641, because services are not property, at least since the 13th amendment abolished slavery.
As noted in Contractor Utility Sales Co., Inc. v. Certain-Teed Corporation, (7th Cir.)
would seem to be a novel form of the now discredited dogma of “liberty of contract” as a property right. Roscoe Pound, Jurisprudence (1959) I, 95-96, 425. As Justice Holmes remarked on this subject: “By calling a business ‘property’ you make it seem like land ... An established business no doubt may have pecuniary value and commonly is protected by law against various unjustified injuries. But you cannot give it definiteness of contour by calling it a thing. It is a course of conduct____” Truax v. Corrigan,257 U.S. 312 , 342,42 S.Ct. 124 , 133,66 L.Ed. 254 (1921).
Similarly, conversion of services may constitute misconduct, wrongful activity, or breach of obligation, but not property. You cannot make it property “by calling it a thing.”
The offense charged, therefore, is not covered by the proscriptions of § 641. Under that construction of the statute, defendant’s conviction cannot stand, for it is elementary that a defendant cannot be convicted for an offense not charged in the indictment. Stirone v. United States,
However, this course of reasoning is foreclosed by the previously quoted language from Bailey, and I conform to the precedent previously established in this Circuit.