United States v. Sargent ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 06-30498
Plaintiff-Appellee, D.C. No.
v.  CR-05-00118-a-
MICHAEL SARGENT, RRB
Defendant-Appellant.
 OPINION
Appeal from the United States District Court
for the District of Alaska
Ralph R. Beistline, District Judge, Presiding
Argued and Submitted
August 6, 2007—Anchorage, Alaska
Filed September 20, 2007
Before: J. Clifford Wallace, John T. Noonan, and
Richard A. Paez, Circuit Judges.
Opinion by Judge Wallace
12805
UNITED STATES v. SARGENT 12807
COUNSEL
Mary C. Geddes, Assistant Federal Defender, Anchorage,
Alaska, for the appellant.
Retta-Rae Randall, Assistant United States Attorney, Anchor-
age, Alaska, for the appellee.
OPINION
WALLACE, Senior Circuit Judge:
Sargent was indicted in one count for theft of public prop-
erty in violation of 18 U.S.C. § 641 and seven counts for theft
of postal service property in violation of 18 U.S.C. § 1707.
12808 UNITED STATES v. SARGENT
After a bench trial, the district court entered a judgment of
conviction on all eight counts and sentenced Sargent to a term
of imprisonment of 30 months on six counts and 12 months
on two counts, all to run concurrently. Sargent appeals both
the conviction and the sentence. We have jurisdiction pursu-
ant to 28 U.S.C. § 1291, and we reverse.
I
Bulk mail permit holders must pre-pay the United States
Postal Service (USPS) for their mailings. To do so, they
deposit money with a cashier at the retail counter of the post
office. The cashier registers the payment in an accounting sys-
tem called Point of Service One (POS 1). The cashier then
sends a record of the transaction to the business mail entry
unit (BMEU), where a clerk or technician enters the informa-
tion into a different and non-integrated accounting system cal-
led PostalOne.
Bulk mailers bring their mail to the BMEU with a Postage
Statement that contains certain information, including the
name and address of the mailer as well as an estimate of the
postage due. A technician inspects a sampling of the mail to
ensure that it is correctly identified in the Postage Statement.
The information on the Postage Statement is then entered into
the PostalOne system. If the postage-due calculation in the
PostalOne system matches the mailer’s estimate, then funds
are withdrawn from the mailer’s POS 1 account and paid to
the USPS for the mailing.
Once the funds have been transferred, at least two copies
of a “3607” form are generated. One copy is attached to the
Postage Statement and filed with the USPS. The second copy
goes to mail processing, indicating that the mail has been paid
for and is ready for delivery.
For twenty-nine years, Sargent worked as a bulk mail tech-
nician at the USPS office at the Anchorage International Air-
UNITED STATES v. SARGENT 12809
port. Late in 2004, he became dissatisfied with his employer
and hatched a vengeful scheme. In hundreds of instances in
2005, he stole mailers’ Postage Statements and failed to gen-
erate the 3607 forms. He then watched to see if his co-
workers delivered the undocumented mailings. At home, Sar-
gent recorded whether these undocumented mailings were
delivered or detected before delivery.
In early April 2005, a United States Postal Inspector dis-
covered that bulk mail was being delivered, but that postage
was not collected for the mailings. Sargent became a suspect
and was later arrested.
The first count of the subsequent indictment charged that
Sargent violated section 641 when he “did knowingly steal
. . . any record, voucher, and thing of value in excess of $1000
of the United States . . . , to wit: postage statements for busi-
ness mailings.” Counts two through eight charged that Sar-
gent violated section 1707 when he “did knowingly steal”
seven Postage Statements noting total postage in amounts
ranging from $1,352.22 to $2,463.68.
Sargent waived his right to a jury trial and admitted the ele-
ments of the charged offenses except the element of value,
which he sought to have determined in a bench trial. The dis-
trict court conducted the trial, and at the close of the govern-
ment’s evidence, Sargent moved for a judgment of acquittal.
The government conceded that it had failed to establish that
the value of the Postage Statements underlying counts five
and six exceeded $1,000, but stipulated that the counts “could
be misdemeanor . . . charges.” The district court denied Sar-
gent’s motion.
Also at the trial, the district court overruled Sargent’s hear-
say objection to the testimony of Beverly Christie, a USPS
manager. She stated that mailers said they would not pay
without the “postage statement[s] or some other documenta-
tion to show that [the USPS] actually made the mailing.”
12810 UNITED STATES v. SARGENT
In its written decision, the district court found that the value
of the Postage Statements underlying counts five and six was
less than $1,000, but that the “face value” of the Postage
Statements underlying the remaining counts exceeded $1,000.
The separate judgment indicates that the district court found
Sargent guilty “on count(s) 1 through 8 of the Indictment.”
At sentencing, Sargent objected to the district court’s appli-
cation of the abuse-of-trust enhancement under United States
Sentencing Guideline (U.S.S.G.) § 3B1.3. On appeal, he has
renewed this objection as well as his objection to the admis-
sion of Christie’s testimony. He also contends that his sen-
tence was unreasonable regardless of whether the district
court properly applied the Guidelines. We need not address
any of these issues if the government failed to establish the
necessary element of value for any of the crimes charged in
the indictment.
II
[1] The district court erred by holding that the government
proved the Postage Statements had “value” in excess of
$1,000 within the meaning of section 641. “The statute pro-
vides two tiers of penalties depending on the value of the
stolen property. If the value exceeds $1,000, the court can
sentence the defendant to a maximum of ten years in prison.
. . . If the value is $1,000 or less, however, the maximum sen-
tence is one year . . . .” United States v. Ligon, 440 F.3d 1182,
1184 (9th Cir. 2006). If the value exceeds $1,000, the crime
is a felony, but otherwise it is a misdemeanor. See id. Either
way, section 641 requires that the government prove that the
stolen property had “value,” which is defined as “face, par, or
market value, or cost price, either wholesale or retail, which-
ever is greater,” 18 U.S.C. § 641.
[2] The statute does not define face value, so we “look to
the text of the statute to determine whether the language at
issue has a plain and unambiguous meaning.” Royal Foods
UNITED STATES v. SARGENT 12811
Co., Inc. v. RJR Holdings, Inc., 252 F.3d 1102, 1106 (9th Cir.
2001) (internal quotations and citation omitted). The plain
meaning of face value is the value indicated on the face of a
financial instrument. Black’s Law Dictionary, for instance,
states that face value is the “value of an insurance policy,
bond, note, mortgage, or other security, as given on the certif-
icate or instrument, payable upon maturity of the instrument.”
Black’s Law Dictionary 591 (6th ed. 1990). Lay dictionaries
also emphasize that face value refers to the value printed on
the face of a financial instrument. See The Random House
Dictionary 690 (2d ed. 1987) (defining face value as “the
value printed on the face of a stock, bond, or other financial
instrument or document”); see also The American Heritage
Dictionary 632 (4th ed. 2000) (defining face value as “[t]he
value printed or written on the face, as of a bill or bond”).
This interpretation is consistent with United States v. Lee,
454 F.2d 190 (9th Cir. 1972). There, we affirmed the defen-
dant’s section 641 conviction, holding that “[i]n a prosecution
for the theft of evidences of debt,” the applicable definition of
value “under the statute is ‘face value’, that is the amount for
which the check is drawn.” Lee, 454 F.2d at 192. Lee also
stated that “value is deemed to be the money due on the
instrument.” Id. (quotations and citation omitted) (emphasis
added).
We have interpreted section 641 to conform with 18 U.S.C.
§ 2311, see Ligon, 440 F.3d at 1184, and in interpreting sec-
tion 2311, the Fifth Circuit has stated that “[t]he plain mean-
ing of ‘face value’ is ‘the value indicated on the face of an
instrument.’ ” United States v. Onyiego, 286 F.3d 249, 254
(5th Cir. 2002) (emphasis added), quoting Merriam-Webster’s
Dictionary 812 (3d ed. 1993). Interpreting face value to refer
to the value indicated on the face of a financial instrument
thus avoids inter-circuit conflict.
[3] Postage Statements are not financial instruments
because no money is due on their presentation and they are
12812 UNITED STATES v. SARGENT
not negotiable. They are for accounting purposes only; they
allow the USPS to synchronize its POS 1 and PostalOne com-
puter systems. The district court thus erred by holding that the
Postage Statements had a face value in excess of $1,000
within the meaning of section 641.
[4] Furthermore, the district court erroneously concluded
that the defendant’s motive is evidence of value. Section 641
defines value with reference to objective factors, and there is
no suggestion that the defendant’s subjective intent deter-
mines the issue of value. Sargent may have intended to cause
the USPS many hundreds of thousands of dollars in damage,
but that does not mean that he valued any Postage Statement
or all of them at a particular dollar amount.
[5] Likewise, the theft of the Postage Statements may have
exposed the USPS to loss, but that does not mean that the
USPS necessarily valued the Postage Statements in the full
amount of the potential loss. Indeed, Christie testified that in
“most cases” the USPS had been able to “provide or con-
struct” documentation proving how much customers owed.
There was no showing that the USPS would have paid any
amount to recover the stolen Postage Statements, let alone
hundreds of thousands of dollars.
[6] United States v. Gordon, 638 F.2d 886 (5th Cir. 1981),
does not suggest a different result. There, the defendant was
convicted under section 641 of stealing marijuana from a ves-
sel seized by the Coast Guard. Gordon, 638 F.3d at 887. On
appeal, he argued that “the marijuana was not a ‘thing of
value,’ insisting that the required ‘value’ must be value to the
Government, not to smugglers or outlaws.” Id. at 889. The
Fifth Circuit disagreed, holding that value “may also be
thieves value.” Id. (quotations and citation omitted). By con-
trast, there is no evidence that the Postage Statements had any
“thieves value.”
United States v. Robie, 166 F.3d 444 (2d Cir. 1999), is sim-
ilarly inapposite. There, the defendant stole misprinted post-
UNITED STATES v. SARGENT 12813
age stamps from the USPS. Robie, 166 F.3d at 447. The
Second Circuit held that the government failed to establish the
value of the stamps on the thieves’ market. See id. at 449.
Nevertheless, according to the Second Circuit, the defendant’s
“knowledge that, with the right misrepresentation, the
[stamps] might be sold for significant sums, his willingness to
brave . . . security measures to obtain them, combined with
the other circumstances of their theft and sale, permitted the
jury to infer as it did that their value then exceeded the statu-
tory threshold.” Id. Even accepting the analysis in Robie,
there was no showing here that Sargent knew that the Postage
Statements could be sold for any amount, let alone “signifi-
cant sums.”
On appeal, the government contends that value includes
actual loss to the victim. We need not decide the issue
because the government did not present evidence showing
that the theft of the Postage Statements caused the USPS a
particular dollar amount of actual loss, and the district court
did not make findings to this end.
[7] Finally, the government asserts that value includes the
amounts recorded on the Postage Statements because those
amounts reflect the “cost price” of the USPS delivering the
mail. True, section 641 requires that we assess the “cost
price” of the stolen “thing of value.” But according to the
indictment, that “thing of value” was the Postage Statements,
not the USPS’s services. Therefore, the government’s “cost
price” argument fails.
[8] Because the government did not establish value in
excess of $1,000, which is a necessary element of the section
641 crime charged, the district court’s judgment of conviction
on count one must be reversed.
[9] The district court also erred by holding that the govern-
ment proved the Postage Statements had “value” in excess of
$1,000 within the meaning of 18 U.S.C. § 1707. The statute
12814 UNITED STATES v. SARGENT
makes it a crime to steal “any property used by the Postal Ser-
vice.” 18 U.S.C. § 1707. The statute also provides that if the
value of the property exceeds $1,000, the defendant shall be
imprisoned for no more than three years, but otherwise the
defendant is eligible for a sentence of no more than one year.
Id. Section 1707 does not define value, and neither the gov-
ernment nor Sargent contends that this element of the felony
offense should be interpreted differently than how it is inter-
preted in section 641. Therefore, we also reverse the district
court’s judgment of conviction on the remaining felony
counts.
REVERSED.