US v. Beard

• Decision Date: 05 May 1989
• Docket Number: No. IP 88-107-CR.,IP 88-107-CR.
• Parties: UNITED STATES of America, Plaintiff, v. Richard E. BEARD, Defendant.
• Court: U.S. District Court — Southern District of Indiana

713 F. Supp. 285

UNITED STATES of America, Plaintiff, v. Richard E. BEARD, Defendant.

No. IP 88-107-CR.

United States District Court, S.D. Indiana, Indianapolis Division.

May 5, 1989.

Linda Chapman, Asst. U.S. Atty., Indianapolis, Ind., for plaintiff.

Linda L. Pence, Indianapolis, Ind., for defendant.

ENTRY

BARKER, District Judge.

I. Background

On September 28, 1988, the federal grand jury for the Southern District of Indiana returned a six count indictment against the defendant Richard Beard. That indictment alleged that, at all times relevant to the indictment, Mr. Beard was the Director of Real Estate for the Indiana University Foundation in Bloomington, Indiana. According to the indictment, the I.U. Foundation was an entity separate and distinct from Indiana University; pursuant to a contract with the University, however, the I.U. Foundation was empowered to enter into grants and contracts for the use and benefit of Indiana University and was obligated under the contract with the university trustees to supervise and handle administrative matters relating to such projects.

Count 1 of the indictment charges that, during his tenure as the Foundation's Director of Real Estate, Mr. Beard "willfully and knowingly converted to his own use monies of the United States ... in that he diverted to his own personal use approximately $27,000 in funds of the Indiana University Foundation, and retained those funds until October 12, 1983," all in violation of 18 U.S.C. § 641. Count 1 further states that these alleged conversions occurred "from on or before June 30, 1976, the exact date being unknown to the Grand Jury, and continued thereafter until October 12, 1983." Counts 2 through 6 of the indictment charge Mr. Beard with various violations of the federal mail fraud statute. 18 U.S.C. § 1341.

This matter is now before the court on the defendant's motion to dismiss Count 1 of the indictment. In his "Memorandum in Support of Motion to Dismiss," Mr. Beard mounts seven different attacks on the validity of Count 1. The defendant urges that: (1) Count 1 is legally insufficient because it fails to state the essential facts constituting the offense charged; (2) Count 1 is legally insufficient because it fails to specify under which paragraph of 18 U.S.C. § 641 it was brought; (3) Count 1 is duplicitous; (4) Count 1 is barred by the statute of limitations; (5) Count 1 should be dismissed because a criminal action for conversion cannot lie for the exercise of control over funds received as loans; (6) Count 1 should be dismissed because of the government's improper pre-indictment delay in its investigation and prosecution; and (7) this court lacks jurisdiction over Count 1 because the funds allegedly converted were not federal funds. The government filed its response on February 6, 1989, and the defendant filed his reply on February 27, 1989, and a supplemental memorandum on March 9, 1989.

II. The Impact of the Applicable Statute of Limitations

Of the various arguments made by the defendant in support of his motion to dismiss, Mr. Beard relies most heavily on his contention that Count 1 of the indictment is barred by the applicable statute of limitations. Furthermore, several of the defendant's other arguments are most appropriately considered as subsidiary components of this statute of limitations issue. Therefore, the court turns first to the question whether Count 1 of the government's indictment of Mr. Beard can survive in light of the applicable statute of limitations.

The defendant contends—and the government apparently concedes, see Government's Response at 7-8—that the statute of limitations applicable to alleged violations of 18 U.S.C. § 641 is of five years in duration. See 18 U.S.C. § 3282 (providing that "except as otherwise expressly provided by law, no person shall be prosecuted ... for any offense ... unless the indictment is found ... within five years next after such offense shall have been committed."). Based on this contention, the defendant's statute of limitations argument is relatively straightforward: "since the indictment was returned on September 28, 1988, it must charge a conversion occurring after September 28, 1983, in order to charge an indictable offense.... the alleged conversions at issue in this case were received by Mr. Beard from on or before 1976 until July, 1983.... Thus, the indictment was returned outside of the statute of limitations period." Defendant's Memorandum in Support of Motion to Dismiss Count 1 of the Indictment hereinafter "Defendant's Brief" at 15-16.

The government argues, however, that a violation of 18 U.S.C. § 641 is a "continuing offense" and that, therefore, "the statute of limitations did not begin to run ... until the defendant made arrangements to repay the converted funds, that is, when he ceased retaining the funds." Government's Response at 8. Because Mr. Beard is alleged to have retained the allegedly converted funds until October 12, 1983, concludes the government, the five year statute of limitations applicable to violations of 18 U.S.C. § 641 did not expire until October 12, 1988—a full two weeks after the return of Mr. Beard's indictment.

The defendant counters the government's reasoning with what amounts to a two-pronged argument. First, he contends that Count 1 is legally insufficient to charge a violation of 18 U.S.C. § 641, particularly because the count fails to specify under which paragraph of section 641 it was brought. Second, the defendant argues that, even if Count 1 were legally sufficient to allege a violation of either or both paragraphs of section 641, as a matter of law neither paragraph of section 641 can qualify as a "continuing offense." If the defendant were to prevail on the first prong of his argument, it would be unnecessary for the court to reach the secondary "continuing offense" issue—an issue of apparent first impression in the federal courts. Therefore, the court first addresses the threshold question of whether Count 1 is legally sufficient to charge a violation of either paragraph of 18 U.S.C. § 641.

A. The Adequacy of Count 1 in Charging a Violation of 18 U.S.C. § 641

Section 641 in fact proscribes two separate and distinct types of conduct. In its relevant portion, the first paragraph of § 641 provides that:

whoever embezzles, steals, purloins, or knowingly converts to his use ... any record, voucher, money, or thing of value of the United States or of any department or agency thereof ... is guilty of a crime.

18 U.S.C. § 641. On the other hand, the second paragraph of section 641 provides that:

whoever receives, conceals, or retains the same with intent to convert it to his use of gain, knowing it to have been embezzled, stolen, purloined or converted is guilty of a crime.

Id. That is, while the first paragraph of § 641 prohibits certain acts of taking, the second paragraph is clearly aimed at the discrete act of receiving such taken property with the intent of converting that property to one's own use. See Milanovich v. United States, 365 U.S. 551, 554, 81 S.Ct. 728, 729, 5 L.Ed.2d 773 (1961) (noting that, in adding the second paragraph to § 641, "Congress was trying to reach a new group of wrongdoers, not to multiply the offense of the ... robbers themselves.")

Paragraph 6 of Count 1 is the only paragraph in the present indictment that alleges specific acts which might conceivably be construed as violations of section 641. In its entirety, that paragraph states:

6. From on or before June 30, 1976, the exact date being unknown to the Grand Jury, and continuing thereafter until October 12, 1983, in the Southern District of Indiana, RICHARD A. BEARD did willfully and knowingly convert to his own use monies of the United States, and various departments and agencies thereof, in that he diverted to his own personal use approximately $27,000.00 in funds of the Indiana University Foundation, and retained those funds until October 12, 1983. A portion of the funds were monies received as part of grants and contracts made to the Indiana University Foundation by the various departments and agencies of the United States.

The foregoing is a violation of Title 18, United States Code, Section 641.

The defendant urges that this paragraph is inadequate to charge a violation of either paragraph of section 641; the government contends that this paragraph is adequate to charge the defendant with violating both paragraphs of section 641.

The defendant bases his contention that Count 1 is insufficient on two separate grounds. First, he asserts that Count 1 impermissibly fails to allege the essential facts constituting a violation of either paragraph of section 641. In particular, he points out that Count 1 lacks factual particularity about the number and dates of the alleged conversions and that the indictment language fails properly to place the alleged conversions within a concrete time frame. Because the charging language asserts that the conversions occurred "From on or before June 30, 1976, the exact date being unknown to the Grand Jury, and continuing thereafter until October 12, 1983," the defendant insists that the indictment effectively charges an offense covering a time period that ends on October 12, 1983, but stretches back in time indefinitely. Such a lack of a specific time frame for Mr. Beard's alleged crimes, urges the defendant, constitutes a failure of adequate notice under sixth amendment. Defendant's Brief at 9-10 (citing United States v. Cecil, 608 F.2d 1294 (9th Cir.1979); United States v. Roman, 728 F.2d 846 (7th Cir.1984)). Second, the defendant argues that, even if the indictment adequately alleged violations of both paragraphs of section 641, the indictment would be insufficient because it fails to specify under which paragraph Mr. Beard is charged.

The government responds by urging that the language of Count 1 is adequate to charge a violation of both paragraphs of section 641 and that the...