Second Circuit – Theft involving a program receiving federal funding: United States v. Sullivan, Bilda, Rankin

United States Court of Appeals for the Second Circuit

Theft involving a program receiving federal funding — Restitution — Jurisdiction

United States v. Sullivan, Bilda, Rankin

23-6559-cr(L)

Judges Lynch, Bianco, and Kahn

Background: The defendants appealed from their conviction of theft involving a program receiving federal funds to which they misappropriated funds from the Connecticut Municipal Electric Energy Cooperative to pay for personal vacations under the guise that those trips were corporate retreats. They argue that the CMEEC received benefits in excess of $!0,000 in the charged one-year period as required by the jurisdictional elements of the offense. They also argue that the government misled the jury into believing that the trips were not approved by CMEEC’s Board, even though three of the four trips were charged to a line item in CMEEC’s annual budget. The CMEEC also petitioned the Second Circuit pursuant to the Crime Victims’ Rights Act seeking review of the district court’s restitution order under the Mandatory Restitution Act arguing that the court erred in concluding that no portion of the legal fees it had advanced to the defendants and their acquitted co-defendants for their defense was compensable as a loss of property.

Ruling: The Second Circuit affirmed the conviction and denied the petition for mandamus. The court noted that CMEEC received a federal grant, and those funds are benefits within the meaning of the statute, which does not require the entity to have retained or have been the ultimate recipient of the benefits, nor does it require a valuation of how much the disbursed fees benefited the entity. It is sufficient that the funds were provided as benefits and the entity received them. The court further held that there was no governmental misconduct before the grand jury, nor did the district court err in setting the restitution amounts, as there was sufficient evidence at trial for a reasonable jury to conclude that the trips were unauthorized. Finally, the Second Circuit held that, while it does not foreclose the possibility that a crime victim could recover advanced defense fees as part of a restitution award in an appropriate case, CMEEC is not entitled to them here.

Tara E. Levens, assistant United States attorneys, for the appellee; Daniel S. Noble, of Krieger Lewin, for the defendants-appellants; Joseph W. Martini, of Spears Manning & Martini, for the petitioner.

Oral argument audio