United States v. J Michael Oliva

• Court: Court of Appeals for the Third Circuit
• Decided: January 31, 1995
• Docket: 93-5099
• Status: Unknown

Opinion

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USA v J Michael Oliva Precedential or Non-Precedential: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

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. 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.