Theft Offenses

Favorable and Noteworthy Decisions in the Supreme Court and Federal Appellate Courts

United States v. Jiminez, 705 F.3d 1305 (11th Cir. 2013)

18 U.S.C. § 666 is often applied to employees of an entity that receives federal funds and who accepts money (either a bribe or a gratuity) to benefit the payor. The statute also applies, however, to agents of an entity that receives federal funds who misapplies money of the entity. In this case, the defendant encouraged his employer to purchase books that, unbeknownst to his employer, were actually written by the defendant’s wife. The defendant failed to reveal his conflict of interest. The Eleventh Circuit held that this was neither an honest service fraud offense, or a § 666 violation. Skilling foreclosed the theory that a conflict of interest could be the basis for an honest services fraud prosecution. The § 666 offense was invalid, because the defendant was not the person responsible for spending the funds of the agency.

United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012)

The defendant, a computer programmer, developed sophisticated “source codes” for the high frequency trading system used by Goldman Sachs. He was offered another job and took the source code with him. He was charged with economic espionage (18 USC § 1832(a)) and a violation of the National Stolen Property Act (18 USC § 2314). The Second Circuit reversed the conviction on both counts. The Stolen Property Act outlaws the theft of “goods, wares, merchandise, securities or money” and the court decided that the source code does not qualify as “goods, wares or merchandise.” Relying on the decision in United States v. Bottone, 365 F.2d 389 (2d Cir. 1966), the court held that a person who memorizes a secret formula and sells it to a competitor has now stolen goods. See also Dowling v. United States, 473 U.S. 207 (1985) (Stolen Property Act does not apply to interstate bootleg record operation); United States v. Brown, 925 F.2d 1301 (10th Cir. 1991); United States v. Stafford, 136 F.3d 1109 (7th Cir. 1998). In short, the interstate transportation of stolen intangible property does not violate § 2314. (The court also noted that transporting the source code on a flash drive did not alter the result, because the flash drive was not the item alleged to be stolen). Turning to the Economic Espionage Act, the code requires that the defendant transmit information “that is related to or included in a product that is produced for or placed in interstate or foreign commerce.” Because the source code was not produced for, or placed in, interstate commerce (though it obviously facilitated Goldman Sachs’ interstate sales), it could not be the focus of a § 1832 offense.

United States v. Kapelioujnyj, 547 F.3d 149 (2d Cir. 2008)

The evidence in this § 2315 case was insufficient to prove that the defendant was aware that the stolen properly he was enlisted to help sell was woth at least $5,000.00. The government also failed to prove the interstate commerce element of the offense. Though the stolen property had traveled between New York and New Jersey, the defendant was not, at that time, a member of the conspiracy to sell the stolen property. The fact that the seller was attempting to get others to help sell the stolen item cannot be imputed to the defendant, who was never shown to have entered a conspiracy to sell stolen property across state lines.

United States v. Lazarenko, 564 F.3d 1026 (9th Cir. 2009)

The defendant obtained money by fraud and deposited it into a specific bank account. Later, money was transferred out of that bank account. The government however, failed to introduce evidence that the same money that went in, was later transferred out. Under 18 U.S.C. § 2314, the government may not simply prove that money went into an account that was obtained by fraud, and sometime in the future money was transferred out, without some effort to trace the money to show that the stolen money was the money that crossed a state line.

United States v. Sargent, 504 F.3d 767 (9th Cir. 2007)

The defendant, an employee of the Postal Service, stole certain forms from the Postal Service, the result of which was that customers were not required to actually pay for certain bulk mailings. The forms themselves, however, did not have value in excess of $1,000 and consequently, the theft did not involve a thing valued at more than $1,000.00. The court noted that the forms were not negotiable instruments.

United States v. Moore, 504 F.3d 1345 (11th Cir. 2007)

The defendants, husband and wife, were charged with theft of Veterans Benefits. After the death of the mother of one of the defendants, the VA continued to direct deposit his benefits into an account which the defendant then converted to his own use. The defendants contended that they did not realize that they were not entitled to continue to receive the benefits upon the death of the veteran. That is, they claimed that they lacked knowledge that the money was “government funds” that they were using and that they did not take the money “willfully.” Based on the evidence presented during the government’s case in chief, there was simply no evidence that the defendants were aware that they were not entitled to the money. All that the government proved is that the mother died, the benefits continued to be deposited into the account and the defendants continued to use the money. There was no evidence of any notice to the defendants that they were not entitled to use the money, or continue to receive benefits based on the death of the veteran.

United States v. Ligon, 440 F.3d 1182 (9th Cir. 2006)

In a case involving theft of government property, the government must prove that the stolen item has “value.” 18 U.S.C. § 641. The government failed to prove that the stolen Indian artifacts had value. The government’s argument – that the items were shown to have archaeological value – was not sufficient.

United States v. Morgan, 393 F.3d 192 (D.C. Cir. 2005)

The defendant was the recipient of a stolen computer. He received it in Maryland and had no connection with the computer until he received it in Maryland. He was charged with receiving stolen property. Venue in D.C. was improper.

United States v. Stafford, 136 F.3d 1109 (7th Cir. 1998)

The defendants carried across state lines codes that enabled them to cash checks. These codes were written down on a piece of paper. This does not amount to a violation of 18 U.S.C. § 2314. That offense requires the interstate transportation of stolen property, securities, or money. The piece of paper with a code written on it is not stolen property, though it enabled thedefendants to steal money.

United States v. Scanzello, 832 F.2d 18 (3rd Cir. 1987)

An indictment which charged the defendant with conspiring to steal goods from interstate shipments can only support a misdemeanor conviction because of the failure to allege the value of the stolen goods.

United States v. Klingler, 61 F.3d 1234 (6th Cir. 1995)

18 U.S.C. §641 makes it a federal crime to steal, convert, or embezzle any federal money. 18 U.S.C. §649 makes it a federal crime to fail to deposit federal money which is required to be deposited according to the Secretary of the Treasury. The defendant in this case was a customs broker, a private person who was licensed by the Customs Service to collect duties from importers of goods. She collected the money and stole it. At no time was the money the property of the federal government, despite the fact that it was collected by the defendant to be paid to the federal government. Therefore, the defendant could not be prosecuted under either of these statutes.

United States v. Howard, 30 F.3d 871 (7th Cir. 1994)

The defendant obtained a loan from the SBA to rebuild his ice cream parlor. The SBA was named as a loss payee on the fire insurance policy. The defendant later removed the SBA from the insurance policy. The shop later burned down and the defendant kept the proceeds from the insurance company. This did not support a conviction under 18 U.S.C. §641. A defendant cannot convert government property when that which is converted is merely a security interest held by the government.

Ward v. Lockhart, 841 F.2d 844 (8th Cir. 1988)

Defendant attempted to sell stolen musical instruments. When questioned by the police officer at the pawnshop, the defendant indicated that he had his credentials in his car. Rather than returning to the police officer, the defendant sped away. The defendant also made contradictory statements to the police about his acquisition and possession of the musical instruments. Nevertheless, the Eighth Circuit holds that the circumstantial evidence was insufficient to sustain the defendant’s conviction for burglary.

United States v. Johnson, 812 F.2d 1329 (11th Cir. 1986)

It is not a proper jury instruction to state that the jury would be “justified” in inferring that the possessor of stolen property committed the theft unless the possession is “explained to the satisfaction of the jury.” This is an improper charge which shifts the burden of proof.