U.S. v. Granberry, 89-3055EM

Citation908 F.2d 278
Decision Date11 December 1990
Docket NumberNo. 89-3055EM,89-3055EM
Parties61 Ed. Law Rep. 893 UNITED STATES of America, Appellant, v. Darryl S. GRANBERRY, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Michael W. Reap, St. Louis, Mo., for appellant.

Michael Dwyer, St. Louis, Mo., for appellee.

Before ARNOLD and WOLLMAN, Circuit Judges, and HANSON, * Senior District Judge.

ARNOLD, Circuit Judge.

This is a mail-fraud case. The District Court, 725 F.Supp. 446, dismissed the indictment for failure to allege an offense against the United States. It held that defendant, even assuming all of the well-pleaded facts in the indictment to be true, had not obtained any "money or property" within the meaning of 18 U.S.C. Sec. 1341, as construed by the Supreme Court in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). We reverse.

The government charges that the defendant obtained a Missouri school-bus-operator permit from the Missouri Department of Revenue by fraud. Granberry, if the indictment is to be believed, falsified his application for the permit by concealing the fact that he had been convicted of first-degree murder. He then applied to the Normandy School District for a job as a bus driver. He again concealed his murder conviction. If the conviction had been known, the State would not have issued him a license, nor would the School District have hired him.

The indictment alleges that by this conduct defendant obtained "money or property" in a number of different ways. Ten different types of money or property are alleged, as follows:

(A) Money and Property of the Normandy School District:

(1) Money from the Normandy School District in the form of wages paid,

(2) Property of the Normandy School District being the exclusive control of the distribution of a limited number of school bus driving jobs,

(3) Property of the Normandy School District being the exclusive control of how its money is spent,

(4) Property of the Normandy School District being the exclusive control of who it hires to drive its school children to and from school,

(5) Property of the Normandy School District being its control of its tortious liability as a result of the hiring of a First Degree Murderer to drive its school children to and from school,

(6) Property of the Normandy School District, said property being its exclusive control over the persons and type of persons with whom it decided to enter employment agreements and contracts.

(B) Money and property of the State of Missouri:

(1) Property of the State of Missouri being the control of how its Department of Revenue spends its resources processing school bus operator permit applications,

(2) Money of the State of Missouri in the form of expenses and costs of processing a fraudulent school bus operator permit application (3) Property of the State of Missouri being the exclusive control of distribution of school bus operator permits,

(4) Property of the State of Missouri being the physical piece of paper namely, the School Bus Operator Permit.

McNally, supra, overruling past precedent in this and other lower courts, held that deprivation of the general right of any employer or government to the faithful services of its employees, or to the faithful observance by its citizens of the law, was not a sufficiently definite interest to come within the mail-fraud statute. The basic purpose of the statute was to prohibit the obtaining of money or other property by false representations, and the term "other property" should be given its ordinary meaning. Intangible property can qualify for this protection, Carpenter v. United States, 484 U.S. 19, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987), but the indictment must still allege that the injured party has been deprived of something that fairly deserves the label of property under traditional usage. It is our task to apply to this case the line drawn in McNally and Carpenter.

We do not think that subdivision (B) of the indictment, quoted above, which describes money and property allegedly taken from the State of Missouri, qualifies for protection under the McNally rule. These alleged deprivations are on the abstract side of the McNally line. A governmental permit may in some sense be property in the hands of the person who receives it, but licensing authorities have no property interest in licenses or permits, and allegations that they were obtained by fraud are not sufficient to state an offense under Section 1341. See United States v. Murphy, 836 F.2d 248 (6th Cir.), cert. denied, 488 U.S. 924, 109 S.Ct. 307, 102 L.Ed.2d 325 (1988). The physical piece of paper that represents the permit is tangible enough, but it is simply negligible--de minimis as a matter of law and insignificant as a matter of fact, apart from the legal entitlement it represents.

We believe the case is otherwise, however, with respect to some of the deprivations of money and property of the Normandy School District alleged in paragraph (A). The item labeled (A)(1), "Money from the Normandy School District in the form of wages paid," is within the narrowest reading of the statute. Money is money, and "money " is...

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