United States v. J Michael Oliva ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
1-31-1995
USA v J Michael Oliva
Precedential or Non-Precedential:
Docket 93-5099
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Recommended Citation
"USA v J Michael Oliva" (1995). 1995 Decisions. Paper 29.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/29
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IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 93-5099
UNITED STATES OF AMERICA
V.
J. MICHAEL OLIVA,
Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. Criminal No. 92-00067-01)
Argued November 22, 1994
Before: HUTCHINSON and NYGAARD, Circuit Judges and
LUDWIG, District Judge*
(Opinion Filed January 31, 1995)
ROBERT J. CANDIDO, ESQUIRE (Argued)
425 Pompton Avenue
Cedar Grove, NJ 07009
Attorney for Appellant
FAITH S. HOCHBERG, ESQUIRE
United States Attorney
TIMOTHY McINNIS, ESQUIRE, (Argued)
Assistant U.S. Attorney
EDNA B. AXELROD, ESQUIRE
Assistant U.S. Attorney
Office of United States Attorney
970 Broad Street, Room 502
Newark, NJ 07102
Attorney for Appellee
OPINION OF THE COURT
* Honorable Edmund V. Ludwig, United States District Judge for
the Eastern District of Pennsylvania, sitting by designation.
NYGAARD, Circuit Judge.
Oliva was convicted of embezzling union funds in
violation of 29 U.S.C. § 501(c). His appeal presents us with
four issues: (1) whether the evidence was sufficient to convict
him; (2) whether reimbursement is a defense to embezzlement; (3)
whether the statute of limitation bars his indictment and
conviction; and (4) whether the district court committed
reversible error in its instructions to the jury on the "intent"
element of the offense. We will affirm. The first two issues
are wholly without merit and require no explanation. The latter
two, however, we explain as follows.
I.
Oliva was the manager of the South Jersey Joint Board
of the Amalgamated Clothing and Textile Workers' Union, having
"inherited" the position from his father. The Joint Board was
composed of six members, including Oliva, a business agent, and
two clerical employees. While he was Joint Board manager, Oliva
regularly submitted substantial travel expenses that he claimed
were incurred on behalf of the union. Among these expenses were
three airline tickets, issued in the names of his wife and two
children, for round-trip travel between Philadelphia and Miami.
The tickets were purchased with the Joint Board's American
Express card, which had been given to Oliva for union-related
expenses. The tickets were paid for on February 1, 1987, when
the union's office secretary prepared a Joint Board check as
payment for its January 1987 American Express bill, obtained
Oliva's signature on the check, and mailed the check to American
Express. The check cleared on February 5, 1987.
The facts were largely undisputed and the primary issue
for the jury was whether these tickets were obtained with
fraudulent intent, as the Government contended, or whether
Oliva's wife's ticket had been authorized by the Joint Board and
the children's tickets had been paid for with Joint Board funds
in error, as Oliva claimed.
Oliva introduced Joint Board minutes purportedly
authorizing his wife to accompany him on union-related trips. He
also introduced the testimony of a retired Joint Board officer to
support his claim. He acknowledged that the children's tickets
were not authorized, but argued that they were purchased with the
union credit card solely to get a better rate. He claimed that
there was no difference between reimbursing the union for these
tickets after the trip rather than before. Defense counsel
acknowledged in his opening and closing statements, that while
Oliva may have spent union money "imprudently," he had always
done so with the good faith belief that he was helping the Joint
Board's constituents by trying to get work for them from textile
manufacturers.
Other Joint Board members testified that the Board had
not authorized payment for Oliva's wife to travel with him and
that all Board members were required to pay travel expenses for
their spouses. These Board members also testified that a number
of sets of Joint Board minutes, including those concerning
authorization for Oliva's salary, Christmas bonus, and travel for
Oliva and his wife, contained "downright lies" and did not
accurately reflect what happened at Joint Board meetings. The
Board members and the office secretary who typed the minutes also
testified that Oliva prepared the minutes and they contained
whatever he wanted.
The government introduced evidence concerning Oliva's
use of Joint Board funds for personal expenditures. One such
expenditure, totaling $7,000, was incurred when Oliva arrived on
the last day of a 1986 AFL-CIO convention in Florida
(a convention he was to attend but not participate in) and
remained in Florida for approximately two more weeks. During
this time, Oliva spent $800 of the union's money on two tickets
for a racing event. Other expenses for which Oliva was
reimbursed included limousine service, airfare, hotels and meals
relating to two trips he and his wife took to a gun manufacturer
in Yakima, Washington. This trip was exclusively for the benefit
of Oliva's gun dealership, which he operated from the Joint
Board's offices while serving as its manager.
The evidence at trial showed that these appropriations
had a false union authorization. The Yakima-related expenses
were approved without question by Joint board Secretary
Patitucci, who was ostensibly acting on behalf of the Joint
Board's "finance committee." In addition, Joint Board minutes
purportedly authorized the Yakima trips. These minutes stated
that during the trips Oliva met with his peers on ACTWU's Pacific
Northwest Joint Board and with a textile manufacturer in that
region. A Pacific Northwest Joint Board officer testified at
trial that both claims were entirely false.
The evidence also included numerous charges to the
Joint Board's Federal Express account that were really incurred
on behalf of Oliva's gun business. An office secretary testified
not only to the personal nature of these expenses, but also that
several times she expressed a concern about paying these charges
with union funds, but was told by Oliva to pay them anyway.
When the ACTWU auditors spotted Oliva's purchase of
airline tickets to Florida for his children, they questioned
Oliva as to its legitimacy. It was only after this inquiry that
Oliva reimbursed the Joint Board for the two airline tickets.
II.
The first issue we address is whether a belief that
one's acts were unauthorized and/or were not for the benefit of
the union are merely factors bearing on intent or whether they
are the essence of intent and must be proven at trial. Courts of
appeals have taken essentially three different approaches. The
first approach is that a conviction under § 501(c) can be
obtained under an "unauthorized expenditure" theory if the
government proves that the defendant had a fraudulent intent to
deprive the union of its funds and that he lacked a good faith
belief that the expenditure was for the legitimate "benefit of
the union." United States v. Gibson, 675 F.2d 825, 828-29 (6th
Cir.), cert. denied, 459 U.S. 972 (1982).
In the second approach, courts have placed a greater
weight on union authorization. The First Circuit Court of
Appeals' view is reflected in United States v. Sullivan, 498 F.2d
146, 150 (1st Cir.), cert. denied, 419 U.S. 993 (1974) ("In our
view the willing acceptance of misappropriated union funds by a
recipient who knows that such funds are unauthorized and illegal
will constitute a violation of § 501(c)"). The Fourth Circuit
Court of Appeals has taken the same position in United States v.
Stockton, 788 F.2d 210, 217 (4th Cir.), cert. denied, 479 U.S.
840 (1986) ("[T]he traditional concept of embezzlement comprises
(1) a conversion -- or, in other words, an unauthorized
appropriation -- of property belonging to another, where (2) the
property is lawfully in the defendant's possession (though for a
limited purpose) at the time of the appropriation, and (3) the
defendant acts with knowledge that his appropriation of the
property is unauthorized, or at least without a good-faith belief
that it has been authorized.").
The Fifth Circuit Court of Appeals focuses at times on
benefit, while at other times it highlights authorization.
Compare United States v. Lavergne, 805 F.2d 517 (5th Cir. 1986)
(in cases of misuse of authorized funds the government must rebut
a defendant's good faith defense that his actions benefitted the
union); with United States v. Nell, 526 F.2d 1223, 1232 (5th Cir.
1976) (once lack of authorization is shown, the prosecution need
not show lack of union benefit). In one other case the Court of
Appeals for the Fifth Circuit appears to have abandoned the
foregoing formula entirely. United States v. Durnin, 632 F.2d
1297, 1300 & n.5 (5th Cir. 1980) (where government thoroughly
establishes fraudulent intent it is not necessary to determine
whether act was authorized).
Then finally, the Second Circuit Court of Appeals seems
to place equal weight on both union authorization and benefit.
In United States v. Butler, 954 F.2d 114, 118 (2d Cir. 1992), the
court held that "a union official charged with embezzling union
funds pursuant to 29 U.S.C. §501(c) lacks the requisite criminal
intent when the evidence establishes that he had a good-faith
belief both that the funds were expended for the union's benefit
and that the expenditures were authorized (or would be ratified)
by the union."
There are obvious problems with these two approaches,
which do not adequately protect union members and their funds.
First, the owners of the fund (union members) are never in a
position to authorize the use of the funds. Moreover, the
owner's delegates, the union leaders who authorize the trips, are
often the ones who take them. Hence, there is a potential for
abusing the authorization. With respect to the benefit theory,
those who take the trips may often be in the strongest position
to justify them as a benefit to the union in ways that are not
easily disproven. The law, however, is designed to protect the
funds of the members.
We believe the better approach, and one which avoids
the paradoxes of the "benefits" and "authorization" defenses, is
the totality of circumstances test used by the Seventh, Eighth
and Ninth Circuit Courts of Appeals. See United States v. Floyd,
882 F.2d 235, 240 (7th Cir. 1989); United States v. Welch, 728
F.2d 1113, 1119-20 (8th Cir. 1984); United States v. Thordarson,
646 F.2d 1323, 1334, 1336 (9th Cir.), cert. denied, 454 U.S. 1055(1981). This requires that the factfinder look at all evidence
in light of all circumstances to determine whether the government
has proven the requisite intent. Within this analysis, both
authorization and benefit are merely factors that may be
considered as bearing on intent.
Applying the totality of circumstances test, we
conclude that the district court properly instructed the jury.
First, the district court read to the jury both § 501(c) and the
definition of a fiduciary, which is contained in § 501(a). The
district court then enumerated the four elements of a § 501(c)
offense, including as the fourth element "that the defendant
acted knowingly, wilfully, unlawfully, and with fraudulent intent
to deprive the South Jersey Joint Board of its money, funds,
securities, property or other assets." The district court
instructed the jury that Oliva's acts must have been "knowing,"
"wilful," and "unlawful," then defined those terms for the jury.
It told the jury that in
determining the issues of knowledge and
fraudulent intent, you may consider any
statement made and acts done or not done by
the defendant, J. Michael Oliva, as well as
all of the facts and circumstances in
evidence which surround or attend the
defendant's actions or statements, or which
may aid you in determining the defendant's
state of mind.
The district court also advised the jury members that
it was for them to determine whether Oliva's purchase of the
airline tickets was authorized and whether Oliva knew if they
were authorized. This, the court instructed the jury, should
also be considered in deciding whether Oliva had fraudulent
intent. Next, the district court advised the jury that, in
determining whether or not he possessed the requisite fraudulent
intent, "it is for you to consider whether or not he lacked the
good faith belief that [the tickets] benefitted the union as a
whole . . ." or "the union members . . . as a whole." The court
further advised the jury that their determination must be made
"from all the surrounding circumstances that he lacked the good
faith belief of benefit to the members of the union as a whole."
We conclude that, although the district court did not
have the benefit of which among the various options on intent
this court would adopt, it instructed the jury properly.
III.
The general five-year statute of limitations applies to
noncapital criminal offenses, including violations of 29 U.S.C.
§ 501(c). Accordingly, to avoid being considered time-barred, an
indictment must be "found" within five years after the offense
has been "committed." 18 U.S.C. § 3282. An indictment is found
when it is returned by a grand jury and filed. United States v.
Srulowitz, 819 F.2d 37, 40 (2d Cir.), cert. denied, 484 U.S. 853(1987). Where, as here, the government has filed a superseding
indictment, the day on which the original indictment was filed
controls for statute of limitation purposes, provided that, as
here, the superseding indictment does not materially broaden or
substantially amend the charges in the first. United States v.
Friedman, 649 F.2d 199, 203-04 (3d Cir. 1981) (adopting United
States v. Grady, 544 F.2d 598, 601-02 (2d Cir. 1976)).
The determination of when the crime has been committed
for statute of limitation purposes, however, is ordinarily a
question of fact for the jury. See United States v. Walsh, 928
F.2d 7, 11-12 (1st Cir. 1991). The issue on appeal is ordinarily
whether a jury could have concluded beyond a reasonable doubt
that the offense had been committed within the requisite period.
Id.Nonetheless, here we cannot review the statute of
limitations issue because it has been waived. We have held that
the statute of limitations is an affirmative defense which is
waived if not first raised in the district court. United States
v. Karlin, 785 F.2d 90, 92-93 (3d Cir. 1986), cert. denied, 480
U.S. 907 (1987). In Karlin the defendant was convicted of
failing to file income tax returns. Among the issues on appeal
was whether one tax year fell outside the applicable six-year
statute of limitations. The count at issue in the indictment had
been filed after the statute of limitations had run. Karlin,
however, had not made this argument in the district court, but
raised it for the first time on appeal. We held that "in
criminal cases the statute of limitations does not go to the
jurisdiction of the court but is an affirmative defense that will
be considered waived if not raised in the district court before
or at trial." Id. at 92-93.
It is undisputed that Oliva neither raised the statute
of limitations as a defense before or at trial nor asked for any
jury instructions on the defense. Hence, Oliva's failure amounts
to a waiver which prevents us from reaching the issue on direct
appeal. See United States v. Gambino, 788 F.2d 938, 950-51 (3d
Cir.), cert. denied, 479 U.S. 825 (1986). Claims of ineffective
assistance of counsel should ordinarily be raised in a collateral
proceeding under 28 U.S.C. § 2255. See United States v. Sandini,
888 F.2d 300, 312 (3d Cir. 1989), cert. denied, 494 U.S. 1089(1990). Hence, although appellant's counsel invites us to decide
the statute of limitations issue, we will not. Moreover, we
cannot, for the simple reason that the record is not fully
developed on whether the failure to raise the statute of
limitation at the appropriate time would have been successful
and, hence, that the failure to do so rendered counsel's
assistance ineffective.
IV.
In sum, we conclude that the district court properly
instructed the jury and that Oliva has waived the statute of
limitations issue. We will therefore affirm the judgment of
conviction.