U.S. v. Gibbs, 82-1246

• Decision Date: 21 April 1983
• Docket Number: No. 82-1246,82-1246
• Citation: 704 F.2d 464
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Sandy E. GIBBS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 464

704 F.2d 464

UNITED STATES of America, Plaintiff-Appellee, v. Sandy E. GIBBS, Defendant-Appellant.

No. 82-1246.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 10, 1983.

Decided April 21, 1983.

Alan Zarky, Los Angeles, Cal., for defendant-appellant.

Richard Marmaro, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Appeal from the United States District Court For the Central District of California.

Before ELY, SCHROEDER, and PREGERSON, Circuit Judges.

PER CURIAM.

A jury convicted Sandy E. Gibbs on twenty counts of embezzlement of federal funds under 18 U.S.C. Sec. 641. On appeal Gibbs contends that one of the elements of embezzlement under Section 641, the federal nature of the funds embezzled, was insufficiently proved.

We find that the evidence presented to the jury on the issue whether the embezzled funds were federal was sufficient to uphold the convictions. Therefore, we affirm the district court.

FACTS

Gibbs founded the Tribal American Consulting Corporation ("TACC" or "the corporation") in May 1972. From then until TACC's dissolution in 1980, Gibbs served as the corporation's president and chairman of the board.

TACC was established to promote educational opportunities for American Indians and to distribute funds for that purpose. The corporation received most of its funds from the federal government. In the two and a half year period covered by the indictment, between 80-86% of TACC's funds--a total of $5,283,523--came from the federal government. Some of the funds were received directly from the federal government; other federal funds flowed to TACC indirectly through state and local agencies. The federal government monitored and controlled the expenditure of all federal funds by requiring periodic reports and audits. TACC commingled federal funds with nonfederal funds received from state and private sources.

From July 1977 through the end of 1979, Gibbs used money from TACC accounts for numerous personal expenditures. He paid his apartment rent and electric bills for seven months with TACC money. He used TACC money to give the corporation's comptroller an expensive wedding reception on the Queen Mary. Gibbs purchased with TACC funds airfares for his girl friend and himself to attend the 1978 Orange Bowl in Miami. He also reimbursed his girl friend with TACC money for expenditures she incurred furnishing Gibbs' apartment. Gibbs wrote checks on TACC accounts to pay his ex-wife's automobile insurance and to reimburse his ex-wife after he used her credit card. Finally, Gibbs paid for personal automobile repairs and purchased clothing with TACC funds. In all, he spent $9420.49 of TACC funds on personal items.

In January 1982, a fourth superseding indictment was filed, charging Gibbs with thirty-four counts of embezzlement under 18 U.S.C. Sec. 641. A jury convicted him of twenty of the counts.

SUFFICIENCY OF THE EVIDENCE

To obtain a conviction under 18 U.S.C. Sec. 641, the government must prove that money was intentionally embezzled, stolen or converted, that the money taken was the property of the United States, and that the United States suffered some loss. See, e.g., United States v. Collins, 464 F.2d 1163 (9th Cir.1972). Gibbs raises only one issue on appeal: whether there was sufficient evidence to prove that the TACC funds he spent for personal use were the property of the United States.

The government presented evidence that between 80-86% of the funds in the account from which Gibbs embezzled was federal money. In addition, evidence showed that the federal government monitored and controlled these funds. Gibbs contends that this showing is insufficient to support the jury's finding that the embezzled funds were federal. He argues that when federal funds have been commingled with nonfederal funds, and the amount of nonfederal funds exceeded the amount embezzled, it is possible that the funds embezzled were entirely nonfederal.

Although this court has not yet addressed this precise issue, two other circuits have discussed the showing the government must make to prove the federal character of money in accounts commingling federal and nonfederal funds. The Fifth Circuit on two occasions concluded that funds embezzled from accounts commingling substantial amounts of federal with nonfederal money qualify as "money ... of the United States" under 18 U.S.C. Sec. 641 when the federal government has supervised and controlled its money in those accounts. United States v. Evans, 572 F.2d 455 (5th Cir.) cert. denied, 439 U.S. 870, 99 S.Ct. 200, 58 L.Ed.2d 182 (1978) (defendant embezzled money from delinquent student loan account containing 75% federal funds); United States v. Smith, 596 F.2d 662 (5th Cir.1979) (defendant embezzled money from student financial aid account containing 80% federal funds). The Seventh Circuit reached the same conclusion in United States v. Maxwell, 588 F.2d 568 (7th Cir.1978) cert. denied, 444 U.S....