Opinion
No. 3:06 CR 110 (JGM).
July 26, 2006
On April 19, 2006, the Government filed a one-count information against defendant, charging him with the misdemeanor of misappropriation of postal funds not in excess of $1,000 by a postal service employee, in violation of 18 U.S.C. § 1711. (Dkt. #1). The parties consented to trial before this Magistrate Judge. (Dkts. ##2 4).
On June 1, 2006, the Government filed the pending Motion in Limine for Jury Instruction and Evidentiary Ruling Barring Evidence or Argument Regarding Defendant's Intent to Repay Stolen Funds (Dkt. #8), as to which defendant filed his brief in opposition twenty-two days later (Dkt. #9). In its motion, the Government requests that this Court (1) rule that defendant's intent to make future repayments is not a defense to the theft charge, and (2) rule, in limine, that if this case were to proceed to trial, the Court would exclude any evidence offered to prove such intent to repay. (Dkt. #8, at 1-5).
The Information alleges that while defendant was an employee of the United States Postal Service working at the United States Post Office in Branford, Connecticut, from July 2, 2005 to July 4, 2005, he "did knowingly and without authority convert to his own use U.S. Postal Funds not in excess of $1,000, such funds having come into his hands and under his control, in the execution and under color of his office, employment and service." (Dkt. #1, ¶¶ 1-2). Under 18 U.S.C. § 1711, a postal employee is "guilty of embezzlement" when he
loans, uses, . . . or converts to his own use, or deposits in any bank, or exchanges for other funds or property, except as authorized by law, any money or property coming into his own hands or under his control in any manner, in the execution or under color of his office, employment or service, . . .; or fails or refuses to remit to or deposit in the Treasury of the United States or in a designated depository, or to account for or turn over to the proper officer or agent, any [Postal Service] money or property. . . .
For more than eighty years, the three Courts of Appeal that have ruled on this issue have agreed that intent to repay is not a defense to misappropriation of postal funds under 18 U.S.C. § 1711, even where actual repayment has been made. The earliest published opinion on this issue was Hughes v. United States, 4 F.2d 686 (8th Cir. 1925), where the defendant-postmaster was convicted under the predecessor statute to 18 U.S.C. § 1711 of having used $404.72 from C.O.D. packages for his own benefit. The district judge refused defendant's request for a jury instruction that defendant had "intended to . . . replace [this sum] and remit it to the proper depository of the United States as soon as he could write up and complete the records of the amounts so received, and did [so], within a reasonable time. . . ." Id. at 687. The Eighth Circuit upheld the conviction, holding that "it was no defense that the defendant intended to restore the money so appropriated at a later date." Id. at 688 (citations omitted).
In Withrow v. United States, 420 F.2d 1220 (5th Cir. 1969), the defendant-postal carrier was convicted under 18 U.S.C. § 1711 for having used $23.10 from the stamp drawer holding $30.00 for lunch and soft drinks, even though he had promised to replace the missing funds the next day when he received his pay check and had done so. Id. at 1222 1224. In upholding the conviction, the Fifth Circuit held that defendant's "intention to replace the missing funds did not remove the intent necessary for conviction." Id. at 1225.
More recently, in United States v. Ross, 206 F.3d 896 (9th Cir. 2000), the defendant-postal employee was indicted under 18 U.S.C. § 1711 with having retained the proceeds of eighty-one money orders in excess of $15,000, although "she did later report and remit money from some of the sales of the [eighty-one] unaccounted for money orders . . . weeks after the money orders had already been cashed." At 898. At trial, the district court granted the government's motion in limine to exclude any evidence of the defendant's intent to pay back proceeds embezzled from the United States. Id. Following defendant's conviction, the Ninth Circuit on appeal agreed with the Fifth Circuit's earlier decision in Withrow, that "intent to repay is not a defense to misappropriation of postal funds under 18 U.S.C. § 1711," which was "consistent" with the Ninth Circuit's "analysis of similar statutes." 206 F.3d at 898-99 (multiple citations omitted).
The same conclusion has been reached by the three district courts that have ruled on this issue during the past fifty-five years. As in Withrow, the defendant-postal clerk in United States v. Friend, 95 F. Supp. 580, 581-82 (S.D.W. Va. 1951), had used $320.53 for his personal use, but upon his arrest, represented that he had funds available to make up this shortage and did so the very next day. In finding defendant guilty under 18 U.S.C. § 1711, the district court held:
It will be readily observed that the gravamen of the offense is the personal use of the money or property by the employee. It cannot be doubted that criminal intent must be present; but that need not be an intent permanently to deprive the United States of the money or property in question. It may be, as it was here, simply the intent to do that which the statute denounces as a crime, namely, to use the money or property for the employee's own purposes. Whether or not the employee hopes, expects, or intends to return the money or property to the United States is not material in deciding the question of guilt or innocence. His use of the money constitutes the crime.Id. at 582 (citing Hughes other cases).
This holding was quoted extensively in Withrow, 420 F.2d at 1224-25. See also United States v. Bui, 2004 WL 57082, at *4 (E.D. Pa. Jan. 9, 2004).
Eight years later, a similar defense was rejected in United States v. Berges, 170 F.Supp. 517, 518 (E.D.N.Y. 1959), where the defendant-postal clerk had converted $56 to her own use in order to pay for a rug delivered to her C.O.D., when she believed that she had a sufficient balance in the bank to cover the check. Relying upon Friend, the district judge held that this defense had "no merit" in a prosecution under 18 U.S.C. § 1711, in that "intention to return the money is not material in the determination of guilt or innocence." Id.
The same conclusion was reached two years ago in United States v. Bui, 2004 WL 57082, at *1 (E.D. Pa. Jan. 9, 2004), where the defendant-postal clerk removed $2,950 from her cash drawer, depositing two checks which were not honored by the bank; defendant was convicted under 18 U.S.C. § 1711. In her motion for judgment of acquittal, defendant argued that she lacked the requisite intent to convert the money to her own use because she expected the checks would clear. Id. at *3. The district court held that "[e]ven assuming [d]efendant believed her checks would clear, such belief does not negate the Government's showing of criminal intent," in that defendant's plan to repay these monies "is not a defense against charges of misappropriation of postal funds." Id. at *4 (citing Ross Withrow).
Defendant argues that these judicial opinions are not applicable, in that "the evidence to be offered here would not be of mere intent to repay, [but] it would include actual repayment and absence of any actual deprivation of postal funds." (Dkt. #9, at 1). However, as indicated above, this defense was rejected in Hughes, 4 F.2d at 688, where repayment was made "within a reasonable time," and inWithrow, 420 F.2d at 1225, and Friend, 95 F. Supp. at 582, where repayment was made the next day.
The only published decision remotely helpful to defendant isUnited States v. Lester, 541 F.2d 499, 500 (5th Cir. 1976), where the defendant-postal employee was convicted under 18 U.S.C. § 1711, when she converted a $50 money order to her own use, but had placed $50.35 in cash in her drawer at the same time she took the money order. In reversing her conviction, the Fifth Circuit held defendant had been entitled at trial to a jury charge that "contemporary substitution of defendant's personal funds for the money order was a defense," in that "there can be no conversion in the sense of this statue and no misappropriation took place."Id. at 502 n. 6. The Fifth Circuit continued, "If the money order was paid for, the payment would negate the element of wrongful intent necessary for conviction under the statute. . . .Id. at 502-03. The Fifth Circuit further distinguished theLester case from the multiple cases holding that "the intent to repay in the future is no defense to a charge of conversion," because in Lester,
payment was made at the same time the property was taken. Taking with an intent to repay contemplates replacement at some point in the future, not simultaneously with the taking. We adhere to those cases that consistently hold that the intention to replace missing funds does not remove the intent necessary for conviction.Id. at 503 (citing Withrow Friend). However, unlikeLester, defendant here apparently did not make a "contemporary substitution" for the postal funds taken.
Both sides agree that there is no Second Circuit precedent on this issue. However, like the Ninth Circuit in Ross, this reading of 18 U.S.C. § 1711 is "consistent" with the Second Circuit's "analysis of similar statutes." 206 F.3d at 898-99.See, e.g., United States v. Karro, 257 F.3d 112, 118 (2d Cir. 2001) (in mail fraud prosecution under 18 U.S.C. §§ 1341- 42, "defendant's contention that she lacked the intent to fail to repay the money she charged on fraudulently-obtained credit cards is irrelevant to her guilt."); United States v. Sindona, 636 F.2d 792, 800 (2d Cir. 1980) (in prosecution for misapplication of bank funds under 18 U.S.C. § 656, intent to repay is not a defense) ("The offense occurred and was complete when the misapplication took place. What might have later happened as to repayment is not material and could not be a defense.") (internal quotation citation omitted), cert. denied, 451 U.S. 912 (1981).
Therefore, consistent with the various decisions discussed above, the Government's Motion in Limine for Jury Instruction and Evidentiary Ruling Barring Evidence or Argument Regarding Defendant's Intent to Repay Stolen Funds (Dkt. #8) is herebygranted.