UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION
March 30, 1998
UNITED STATES OF AMERICA, Plaintiff,
MICHAEL A. YASHAR, Defendant.
The opinion of the court was delivered by: SHADUR
MEMORANDUM OPINION AND ORDER
Defendant Michael Yashar ("Yashar") has moved under Fed. R. Crim. P. 12(b) for dismissal of the one-count indictment that charges him with having been a ghost payroller during the period from September 1, 1991 to September 1, 1992, in violation of 18 U.S.C. § 666 ("Section 666"). Here are the portions of that statute (apart from the definitions contained in Section 666(d)) that are relevant for current purposes:
(a) Whoever, if the circumstance described in subsection (b) of this section exists--
(1) being an agent...of a...local...government, or any agency thereof--
(A) embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that--
(i) is valued at $ 5,000 or more, and
(ii) is owned by, or is under the care, custody, or control of such... government, or agency; or
shall be fined under this title, imprisoned not more than 10 years, or both.
(b) The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $ 10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.
(c) This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.
Because only one of the now-fully-briefed contentions advanced by Yashar needs discussion to resolve his motion, this opinion will focus on that argument alone.
To begin with, there is no question that the City of Chicago met the "circumstance" described in Section 666(b) during the period in question. Although that may perhaps not have been true if the statutory focus were instead limited to the City Council's Committee on Finance (where Yashar was a payroller), the United States is entirely correct in urging that the City itself--and not the City Council or its committee--is the relevant "government" for statutory purposes.
As another preliminary matter, the United States is also correct in asserting that the determination of a motion to dismiss an indictment (just as with the equivalent motion to dismiss a civil complaint for failure to state a claim, brought under Fed. R. Civ. P. 12(b)(6)) does not permit the court to go behind the charge to examine whether its factual allegations are true or false. In those terms the indictment is impeccable, containing as it does the allegations that the City received the requisite amount of benefits during the already-described 12-month period and that during the same time frame Yashar "knowingly and intentionally obtained by fraud, and knowingly and intentionally embezzled, stole, obtained by fraud, and without authority misapplied and caused to be misapplied property that was valued at $ 5,000 or more and which was owned and under the care, custody and control of the City of Chicago...." But having made the point that the allegations of the indictment must be credited as gospel on the current motion, the United States still does not contest Yashar's statement that less than $ 5,000 was paid to him during the only portion of the time frame in question as to which he had waived the statute of limitations (as discussed hereafter). This opinion will therefore proceed on that predicate.
For present purposes, then, the factual matrix to be tested under the applicable legal standards is one in which Yashar had signed a limited waiver of the statute of limitations that excluded any criminal charges that were time-barred as of August 13, 1997--so that Yashar's only conduct that remains criminally actionable is conduct between August 13, 1992 and the September 1, 1992 date when he was terminated as a Finance Committee employee. And there is no question that the monies that he received from his allegedly fraudulent scheme during that short window period were far below the $ 5,000 value specified in Section 666(a)(1)(A), although comparable monies that he had received during the limitations-barred period from September 1, 1991 to August 13, 1992 would have pushed the 12-month aggregate over the $ 5,000 floor.
Both sides agree that the precise issue posed by this factual scenario is a matter of first impression in any court. What the government points to as purportedly supporting its position that payments received during the time frame outlawed by limitations may be taken into account as long as some amount was received during the period that is not time-barred are cases such as United States v. Valentine, 63 F.3d 459, 464, 466 (6th Cir. 1995) and its predecessor in the same circuit, United States v. Sanderson, 966 F.2d 184, 189 (6th Cir. 1992)--cases that hold that where multiple embezzled or fraudulent receipts are part of a single scheme, they may be aggregated to establish the $ 5,000 statutory threshold.
And from those cases United States Mem. 5 seeks to extrapolate to this proposition:
Although we have found no cases that explicitly discuss the concept of aggregation and its relation to the statute of limitations, it necessarily follows from the concept of aggregation that an indictment properly charges a defendant with a violation of § 666 by aggregating during a one-year period multiple acts of embezzlement, theft, and fraud in a single scheme or plan, including (as here) acts in the scheme outside the statute of limitations (pre-August 13, 1992) and within (post-August 13, 1992). That is, because the jury may aggregate conversions or thefts related to a single scheme, the statute of limitations does not bar a § 666 charge premised on a single scheme where at least some of the conversions or thefts occur within the five year statute.
But that conclusion does not "necessarily follow" at all--instead it is really a total nonsequitur to proceed from a quite permissible "concept of aggregation" to a conclusion that would permit conduct that is itself barred by limitations to be treated as criminally actionable. To be sure, evidence of such time-outlawed conduct might well be admissible to permit a jury to infer criminal intent at the time a defendant committed a later crime that is not barred by limitations, or perhaps some other element of a crime committed within the time frame that is not time-barred. But the basic effect of any statute of limitations is that all conduct that antedates the limitations period is no longer itself criminally actionable, and the government's argument here would amount to an impermissible violation of such repose that is guaranteed by the running of limitations.
At the risk of some oversimplification, the legal consequence of the August 13, 1992 dividing line between time-barred and non-time-barred conduct is just as though the indictment had to be rewritten to allege that all of the elements of the Section 666 crime (including the fraudulent obtaining of at least $ 5,000) were committed by Yashar between that August 13 date and the end date of September 1, 1992--and not during the entire 12-month period preceding that end date. And it appears to be undisputed, though the indictment says otherwise, that the government cannot prove that to have taken place.
Accordingly this Court is prepared to dismiss the indictment if the facts as to the amounts that were received by Yashar and as to the times that he received them are as he has represented. Because the manner in which the indictment is drawn, coupled with the earlier-stated proposition that requires this Court to accept the truth of the indictment's allegations, prevents such a dismissal now, this Court must perforce await a statement as to the government's position regarding the actual facts (as distinct from those allegations). It is therefore expected that Assistant United States Attorney Kaarina Salovaara, who is responsible for this case, will promptly advise this Court in that respect so that an order of dismissal can be entered if appropriate.
Milton I. Shadur
Senior United States District Judge
Date: March 30, 1998