United States v. Howerter ( 2001 )

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
4-25-2001
United States v. Howerter
Precedential or Non-Precedential:
Docket 00-3188
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Filed April 25, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 00-3188
UNITED STATES OF AMERICA
v.
THOMAS HOWERTER,
Appellant
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Criminal No. 99-cr-00034-1)
District Judge: Honorable Donetta W. Ambr ose
Argued September 12, 2000
Before: McKEE, RENDELL, and STAPLETON,
Circuit Judges
(Filed: April 25, 2001)
Michael J. Novara, Esq. [ARGUED]
Office of Federal Public Defender
960 Penn Avenue
415 Convention Tower
Pittsburgh, PA 15222
Counsel for Appellant
Bonnie R. Schlueter, Esq. [ARGUED]
Office of United States Attorney
633 United States Post Office &
Courthouse
Pittsburgh, PA 15219
Counsel for Appellee
OPINION OF THE COURT
RENDELL, Circuit Judge.
Thomas Howerter appeals his conviction for bank lar ceny
under 18 U.S.C. S 2113(b). The District Court determined
that the elements required by the statute had been
satisfied. On appeal, Howerter contends that his conduct is
not proscribed by the federal bank larceny statute. We
agree, and we will REVERSE.1
I. Facts and Procedural History
From 1994 to 1997, while living in Germany, Howerter
was the treasurer of the Wuerzbur g American High School
Parent Teacher Student Association ("PTSA"), a private
organization located in West Ger many that collected private
donations and issued scholarship checks to the children of
Army employees to help defray the cost of college tuition.
As treasurer, Howerter was r esponsible for collecting
donations, depositing them in a bank account, and writing
checks to the colleges and universities in the name of the
student recipients, all on behalf of PTSA.
On September 22, 1994, PTSA opened a bank account at
Community Bank, a division of Nations Bank, which is
insured by the Federal Deposit Insurance Corporation
("FDIC"). Howerter signed the signatur e card as custodian,
which authorized the bank to honor his signatur e for the
payment of funds and the transaction of business on the
account. In 1996 and 1997, Howerter betrayed the trust
placed in him, withdrawing $18,000 from the account by
writing checks on the account payable to himself, signing
the checks as drawer, endorsing them, and then keeping
the money for himself, instead of using it for PTSA's
purposes. On January 20, 1996, Howerter also withdr ew
$525 in cash from the account by the use of a withdrawal
_________________________________________________________________
1. Howerter also urged that the statute was unconstitutional as applied
to him; the District Court rejected this ar gument. We do not reach this
issue because we reverse based on the scope of the statute itself.
2
slip. He cashed fifteen of the seventeen checks at the same
branch of Nations Bank in Kitzingen, Germany, and the
same teller handled all of these transactions. Some of the
checks bore memo notations, such as "senior class party,"
and "scholarship." Although Nations Bank suf fered no loss
as a result of Howerter's conduct, PTSA clearly did.
In March 1999, a grand jury in the Western District of
Pennsylvania returned a one count indictment charging
Howerter with bank larceny under 18 U.S.C.S 2113(b).
Specifically, the indictment charged that fr om June 1,
1996, to July 31, 1997, Howerter stole $19,025 fr om an
account in the custody of Nations Bank, an FDIC-insured
bank. After a non-jury trial, he was convicted, and has
appealed from the Court's final judgment entered on
November 5, 1999.
We exercise plenary review over the issue that is the
basis for our reversal of Howerter's conviction: whether 18
U.S.C. S 2113(b) was properly applied in the instant case.
See Kapral v. United States, 166 F.3d 565 (3d Cir. 1999)
(holding that issues of statutory interpretation are subject
to plenary review).
II. Discussion
On appeal, Howerter challenges his conviction and the
District Court's denial of his motion for acquittal, urging
that S 2113(b) has been improperly applied to him because
his conduct does not fit within the statutory purview.
The bank larceny statute at issue, 18 U.S.C.S 2113(b),
provides in relevant part:
Whoever takes and carries away, with intent to steal or
purloin, any property or money or any other thing of
value exceeding $100 belonging to, or in the car e,
custody, control, management, or possession of any
bank, credit union, or any savings and loan
association, shall be fined not more than $5,000 or
imprisoned not more than ten years, or both. 2
_________________________________________________________________
2. The jurisdictional element is found in 18 U.S.C. S 2113(f):
3
Howerter frames his argument as follows:
The scope of the federal bank larceny statute has
evolved over many years so as to include lar ceny by
false pretenses. However, in every case of larceny by
false pretenses, the bank itself was the victim of some
fraudulent conduct by the defendant.
In the present case, Mr. Howerter was authorized to
sign checks drawn on the fund's account, and the
bank was authorized to cash those checks. As far as
the bank was concerned, Mr. Howerter lawfully
withdrew the funds pursuant to the terms of the
account. No material misrepresentations were made to
the bank by Mr. Howerter to induce the r elease of the
monies.
Although Mr. Howerter ultimately kept the money for
himself, this is a matter between Mr. Howerter and the
scholarship fund, not between Mr. Howerter and the
bank. Accordingly, Mr. Howerter did not commit bank
larceny within the meaning of the federal bank larceny
statute.
App. Br. at 7-8. In response, the gover nment argues that
withdrawal of money under false pretenses satisfies the
"taking" element, that the money was clearly in the custody
and control of the bank, and that "[t]he stipulated facts
establish that Howerter misrepresented that he was acting
within his authority by cashing checks when he intended to
keep, and did keep, the money himself." Appellee Br. at 10-
11.
The District Court held that the elements of the crime of
bank larceny had been established beyond a r easonable
_________________________________________________________________
As used in this section the term "bank" means any member bank of
the Federal Reserve System, and any bank, banking association,
trust company, savings bank, or other banking institution organized
or operating under the laws of the United States, including a
branch
of agency of a foreign bank (as such ter ms are defined in
paragraphs (1) and (3) of section 1(b) of the Inter national
Banking
Act of 1978), and any institution the deposits of which are insured
by the Federal Deposit Insurance Corporation.
4
doubt by the parties' stipulations, and recounted these
elements as follows: (1) Defendant took or carried away
more than $100.00 of money in the custody of a bank; (2)
Defendant did so intentionally, knowing that he was not
entitled to it; and (3) the bank's deposits wer e insured by
the FDIC. Dist. Ct. Op. at 2.
As should be readily apparent from the foregoing
recitation of Howerter's argument, the statutory language,
and the government's position, the statute could be read to
cover this situation. But we are not certain that it should
be. We have not been able to locate a similar , or even
comparable, fact pattern, and the gover nment concedes
that the dearth of law on point is due to the fact that Mr.
Howerter's conduct was subjected to federal pr osecution
because of the lack of any other prosecutorial agency with
jurisdiction over him.
We will begin the process of deter mining whether
Howerter's conviction for bank larceny should stand by
examining the origins of the statute and the r elevant
precedent construing it. In 1934, Congr ess first considered
a bill designed "to provide punishment for certain offenses
against banks, organized or operating under laws of the
United States, or any member of the Federal Reserve
System." S. 2841, 73d Cong. (1934). It made bank robbery
a federal crime by punishing anyone who "by for ce and
violence, or by putting in fear, feloniously takes, or . . .
attempts to take . . . any property or money" from a bank,
id., and was one of several bills intr oduced by the Attorney
General, who enclosed a letter expressing concern that
legislation was needed to curb "organized groups of
gangsters who . . . move rapidly from the scene of one
crime of violence to another across State lines," S. Rep. No.
73-537, at 1 (1934); H.R. Rep. 73-1461, at 2 (1934). This
bill passed both the House of Representatives and the
Senate and became law. 78 Cong. Rec. 8768, 8776 (1934).
The law was amended in 1937, when a bill was
introduced that was "designed to enlar ge the scope of the
bank robbery statute, enacted in 1934, . . . to include
larceny and burglary of the banks pr otected by this
statute." H.R. Rep. No. 75-732, at 1 (1937). Once passed, it
became a crime for anyone to "take and carry away, with
5
intent to steal or purloin, any property or money or any
other thing of value . . . belonging to . . . any bank." 78
Cong. Rec. 8776 (1937). There is very little legislative
history regarding the 1934 bill or its amendment in 1937.
We had occasion to examine the federal bank larceny
statute in United States v. Pinto, 646 F .2d 833 (3d Cir.
1981), and a year later in United States v. Simmons, 679
F.2d 1042 (3d Cir. 1982). In Pinto , a foreign bank of one of
the defendant's customers remitted $193,511 to the
defendant, instead of the $193.51 instructed by the
customer. 646 F.2d at 834. The defendant at first insisted
he had invoices for the amount received but later
acknowledged that the amount transmitted had been a
mistake, and was prosecuted for bank lar ceny. Id. We
reversed the conviction, holding that one who makes use of
funds deposited into his account as a result of a unilateral
mistake of the bank has not engaged in taking funds away
from the bank in a trespassory way, and, thus, is not guilty
of bank larceny under 18 U.S.C. S 2113(b).3 Id. at 837.
In Simmons, the defendant was a co-conspirator in an
elaborate scheme involving the cashing of for ged checks.
We characterized the issue before us as being "whether
evidence of a comprehensive scheme to negotiate checks
bearing forged signatures is encompassed within statutory
language proscribing ``taking and carrying away, with intent
to steal or purloin property or money belonging to a
federally insured bank.' " 679 F.2d at 1043 (quoting 18
U.S.C. S 2113(b)).
_________________________________________________________________
3. Pinto's exact holding has been subjectto different interpretations. We
understand the opinion to distinguish Pinto's conduct from common law
larceny due to the lack of a trespassory taking, and also to differentiate
it from the conduct in other cases wher e the defendant engaged in a
fraudulent scheme. With respect to the latter distinction, Pinto appears
to distinguish between a scheme hatched contemporaneously with the
bank's receipt of funds and before an actual taking, as was the case in
Thaggard v. United States, 354 F.2d 735, 736-38 (5th Cir. 1965) (stating
that bank larceny statute can be construed to cover defendant's drawing
money in cash from his bank account knowing that bank had
mistakenly inflated amount in account), and one that was conceived
later, as or after funds were actually withdrawn from the account. We do
not rely on Pinto, and thus need not assess whether, in light of Bell, the
reasoning in Pinto would continue to excuse Pinto's conduct today.
6
Defendants urged that their embezzlement or obtaining
by false pretenses was not encompassed within the term
"steal or purloin" in the statute. Noting that three other
circuits had rejected this narrow interpretation, we
reviewed the legislative process that led to passage of the
law. Id. at 1046-47. We concluded that the law "was
directed at least in part to the federal gover nment's
potential obligation as an insurer to r eimburse various
financial institutions if they were to become victims of
offenses covered by S 2113." Id. at 1048. We concluded that
by using the term "steal or purloin," Congress meant to
reach conduct beyond the trespassory4 taking of common
law larceny, and that we should not construe the word
"steal" as nothing more than larceny, as may have been the
case at common law. Instead, we adopted the meaning of
"steal" as interpreted by the Supr eme Court in United
States v. Turley, 352 U.S. 407, 412 (1957), namely, as
defined in Black's Law Dictionary, to denote "the criminal
taking of personal property either by lar ceny,
embezzlement, or false pretenses." Simmons, 679 F.2d at
1045. We concluded that the words "steal or purloin"
encompassed a "scheme whereby forged checks were
utilized to remove funds from insur ed banks." Id. at 1049.
In Simmons, we downplayed the concer n about the
expansion of federal jurisdiction in the area of criminal law,
noting that the Supreme Court in McElr oy v. United States,
455 U.S. 643 (1982), in interpreting 18 U.S.C.S 2314, had
found this concern unpersuasive in light of the greater
concern expressed in the statutory language and the
congressional purpose regarding the need for the federal
government to aid states in combating crime in interstate
commerce. 679 F.2d at 1048. We also remarked: "Certainly,
when the underlying offense affects federally insured money
_________________________________________________________________
4. The term "trespassory" means without the owner's consent. See Pinto,
646 F.2d at 836 n.8 ("[O]ne of the essential elements of "common law
larceny" is that the taking is by tr espass, that is, without the consent
of
the owner."); United States v. Johnson , 575 F.2d 678, 679 (8th Cir. 1978)
("Common law larceny requires a tr espass in the taking."); Bennett v.
United States, 399 F.2d 740, 743 (9th Cir . 1968) ("To consummate the
offense of larceny there must occur a taking of property which is
trespassory in nature, ``without the consent of the owner.' ").
7
or property, Congress has a legitimate concern in exercising
its jurisdiction to outlaw conduct such as that found to
have occurred in this case." Id. at 1049.
We also took pains to distinguish our ruling in Simmons
from our previous decision in Pinto , where we had found no
bank larceny:
The difference between the facts in Pinto and those
presented here, where there was an ongoing and
comprehensive scheme to withdraw funds fr om a series
of banks through forged checks, is appar ent on its
face. Moreover, the holding in Pinto was explicitly
limited to the facts before the court at that time. As the
court stated, "there was no ``taking away of funds from
either bank in a trespassory way.' " The court stated
that the facts before it were "factually quite different"
from those cases where the "bank funds taken and
carried away were drawn out of a bank thr ough
various fraudulent schemes."
Id. at 837.
In many ways, Simmons presaged the Supr eme Court's
ruling on this issue the very next year in Bell v. United
States, 462 U.S. 356 (1983). In Bell, the Supreme Court
held that the federal crime of bank larceny was not limited
to common law larceny, and that the statutory language
was broad enough to include conduct encompassed in the
crime of taking under false pretenses. Id. at 361. Bell had
deposited a stolen check for $10,000 into a newly-opened
account using his own name but otherwise false
information. Id. at 357. He had alter ed the endorsement to
reflect his own new deposit account number . Id. After
waiting several days, he closed the account and took the
funds. Id. The Supreme Court had little difficulty
determining that, while what Bell had done would also be
chargeable as taking under false pretenses, it nonetheless
fit within the statutory language for the federal crime of
bank larceny: "The evidence is clear that he``took and
carried away, with intent to steal or purloin, [over $10,000
that was] in the care, custody, contr ol, management or
possession of ' Dade Federal Savings and Loan." Id. at 361
(quoting 18 U.S.C. S 2113(b)). The Court r easoned that a
8
reading of the statute so as to limit it to common law
larceny was not appropriate because, while the concept of
"takes and carries away" is an element of lar ceny at
common law, the element "with intent to steal or purloin"
evidences Congress' intent to go beyond common law
larceny because this phrase had no established meaning at
common law.5 Id. at 360.
The courts in both Simmons and Bell focused on, and
essentially based their interpretation of the statutes on, the
view that the purpose to be served by a federal statute such
as this is "to protect banks from those who wished to steal
banks' assets -- even if they used no force in doing so." Id.
at 362. The fact that the conduct might fall outside
common law larceny was of no moment. The Supr eme
Court in Bell concluded:
The congressional goal of protecting bank assets is
entirely independent of the traditional distinction on
which Bell relies. To the extent that a bank needs
protection against larceny by trick, it also needs
protection from false pretenses. W e cannot believe that
Congress wished to limit the scope of the amended
Act's coverage, and thus limit its remedial purpose, on
the basis of an arcane and artificial distinction more
suited to the social conditions of 18th century England
than the needs of 20th century America. Such an
interpretation would signal a retur n to the
"incongruous results" that the 1937 amendment was
designed to eliminate.
Id.
We had occasion to construe the statute again, but in a
different factual setting, in United States v. Goldblatt, 813
F.2d 619 (3d Cir. 1987), again addr essing the reach of
18 U.S.C. S 2113(b). Goldblatt's son made A TM withdrawals
_________________________________________________________________
5. The Supreme Court did not refer ence the rule of lenity, but relied on
its view of the legislative history as dictating that the statute was not
intended to proscribe only common law lar ceny. Bell, 462 U.S. at 361-
62. In his dissent, Justice Stevens argued that a narrower reading was
consistent with a limited purview of federal criminal legislation where
the
intended coverage is not clear. Id. at 363.
9
from his father's bank account while Goldblatt was
incarcerated. 813 F.2d at 621. When Goldblatt was released
from jail, he reported to the bank that his ATM card had
been stolen, and claimed the right to the withdrawn funds.
Id. His requests were at first denied, but after he swore in
an affidavit that he could not identify the person depicted
in the six ATM photographs, the bank reimbursed his
account for the withdrawn funds. Id. Goldblatt then
withdrew these funds. Id. Subsequently, the bank learned
that the man in the photographs was Goldblatt's son, and
charged Goldblatt with bank larceny. Id. He argued that
because the bank had authorized him to withdraw the
funds, he could not be guilty of bank larceny. Id. at 624.
However, the crucial fact in Goldblatt was that the
authorization was obtained by way of false pr etenses, that
is, by Goldblatt misrepresenting to the bank that he did not
recognize his son in the ATM photographs. Id. at 622. We
therefore held that because S 2113(b) prohibits a broader
range of conduct than common law larceny, as we had held
in Simmons, the "taking and carrying away" element could
be satisfied by Goldblatt's conduct -- withdrawing funds
pursuant to a scheme to defraud in order to deprive the
bank of funds. Id. at 625.
We are called upon in the case befor e us to answer the
question addressed so many times before: When does the
withdrawal or "taking" of funds from a federal bank
constitute federal bank larceny? Or, mor e specifically, does
the defendant's conduct under the facts of this casefit
within the activity proscribed by the federal bank larceny
statute? As we have noted, when faced with this question
in Simmons and Goldblatt, we answer ed in the affirmative.
Here, we must draw the line once again, this time
examining Howerter's conduct in light of the facts of the
case. Was what Howerter did "taking and carrying away
with intent to steal or purloin?" We conclude that it was
not. We find two basic distinguishing facts present here:
first, the unchallenged fact of Howerter's authority to do
precisely what he did vis-a-vis the bank -- namely,
withdraw PTSA's funds; and second, the absence of any
fraudulent conduct directed at the bank, by way of a
scheme to deprive it of funds or otherwise. In the cases we
10
discuss above, we found the statute to apply because the
defendant had obtained money by false pretenses through
a fraudulent scheme directed at the bank. In each case, we
found that the defendant's conduct constituted "taking and
carrying away with intent to steal or purloin," even though
the traditional attribute of bank larceny, namely a
"trespassory taking," was not present. See e.g., United
States v. Martin, 215 F.3d 470 (4th Cir . 2000) (affirming
bank larceny conviction based on robbery of an armored
truck); United States v. Sacasas, 381 F .2d 451 (2d Cir.
1967) (upholding multiple count conviction including bank
larceny where defendants participated in a bank holdup).
Here, there is no evidence of either tr espassory conduct
constituting common law larceny, which is clearly covered
by the statute, or of a fraudulent scheme that would make
Howerter guilty of obtaining money by false pr etenses, as in
Bell, Simmons, and Goldblatt. To the contrary, there is no
allegation of a lack of consent by the bank, and therefore,
there was no trespassory conduct. And because there was
no falsity or false pretenses directed at the bank in
obtaining this consent, Howerter's conduct was not
fraudulent vis-a-vis the bank. Hence, Howerter's conduct
neither falls within the traditional purview of this statute,
that is, common law larceny by way of a tr espassory taking,
nor within the expanded concept of bank larceny after Bell
and Simmons, which includes a non-tr espassory taking
accomplished by way of a fraudulent scheme dir ected at the
bank.
We, therefore, conclude that Howerter's conduct does not
fit within the parameters of the statute.6 We note, also, that
we need not decide the precise contours of the statutory
provision regarding "taking," but only hold that lacking any
evidence of trespassory or fraudulent conduct directed at
_________________________________________________________________
6. We also note that this case differs from Simmons and Bell not only
because of the lack of fraudulent conduct dir ected at the bank, but,
also,
due to the fact that there was no loss or potential loss to the bank here.
As we reference in our discussion above, the case law routinely relies on
congressional policy to protect banks and their assets as the
underpinning of this statute. We submit that this bolsters our view that
the legislature was not trying to combat conduct like Howerter's.
11
the bank, there was no taking from the bank's custody as
contemplated by the statute.
The District Court may have been misguided by its own
recitation of the "elements" of the crime of bank larceny.7 It
never really focused on the phrase that has been
interpreted repeatedly, as we have noted,"takes and carries
away, with intent to steal or purloin." It is this phrase, and
its elucidation in the case law, that leads us to conclude
that Howerter's conduct does not fall within the confines of
the criminal conduct that the statute proscribes.
In so holding, we reject the government's argument that
when Howerter withdrew the funds for his own purposes,
allegedly knowing he would steal those funds fr om the
organization, he used false pretenses to obtain the funds
from the bank. Tempting as it may be to punish private
embezzlement in this way, were we to include this conduct
as falling within the concept of obtaining bank funds by
false pretenses, every misused but otherwise consented to
withdrawal would be subject to federal prosecution. We
cannot help but view the language from the case law that
we have referenced above regar ding congressional policy to
protect banks to mean that the falsity, embezzlement, or
fraudulent scheme must have been directed at, or
implicated, the bank in some way, and not mer ely a third
party.
We also reject the government's ar gument that the
notations on the memo portion of the checks wer e deceptive
and the bank therefore paid the checks under false
pretenses. There was no evidentiary support offered for the
proposition that the bank was in any way deceived, or paid
the checks because of any deception. To the contrary, the
bank clearly paid the checks because it was obligated to
honor Howerter's signature. It honored all checks -- with
and without memo notations -- promptly upon
presentation. While we will draw inferences in favor of the
_________________________________________________________________
7. As we reference above, the District Court recited three "elements:" (1)
Defendant took or carried away more than $100.00 of money in the
custody of a bank; (2) Defendant did so intentionally, knowing that he
was not entitled to it; and (3) the bank's deposits were insured by the
FDIC. Dist. Ct. Op. at 2.
12
verdict winner, there are no facts from which we could infer
that the memo notations had anything to do with the
bank's decision to pay, let alone that it relied on them and
was deceived.
Accordingly, we will REVERSE the judgment of the
District Court.
13
STAPLETON, J., Concurring:
As the Court's opinion recounts, the scope of 18 U.S.C.
S 2113(b) has been extended beyond common law larceny,
i.e., the taking of property from the possession of a covered
institution without its consent, to situations involving the
taking of property from the possession of such an
institution when its consent has been obtained thr ough
false pretenses. So far as I am aware, however, it has never
been applied to a case involving the taking of pr operty from
the possession of a consenting covered institution when its
consent has not been obtained by false pretenses. Our
decision in United States v. Pinto, 646 F .2d 833 (3d Cir.
1981), seems to me to preclude our extending the scope of
the statute to include such a case, and I concur in the
judgment of the Court on that basis.
Here, Howerter practiced no deception on the bank; the
checks were paid because the bank was obligated to honor
his signature. While the government attempts to make
much of the fact that some checks contained memos
suggesting the future use of the withdrawn funds for
scholarships and a senior class party, the bank's obligation
to honor the checks signed by Howerter was the same
whether or not they contained such notations. That those
notations were wholly unrelated to the bank's consent to
the withdrawals is evidenced by the fact that it honored all
of the checks promptly on presentation.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
14