Argued: December 7, 2017
The
United States appeals from an August 12, 2015 judgment of the
United States District Court for the Eastern District of New
York (Irizarry, C.J.), granting the
Defendant-Appellee's Federal Rule of Criminal Procedure
12(b) motion to dismiss two counts of an indictment charging
him with federal-program embezzlement. The
Defendant-Appellee, John Sampson ("Sampson"),
allegedly embezzled funds from escrow accounts that he
oversaw in his capacity as a referee for foreclosure actions.
The district court dismissed the embezzlement counts as
time-barred by 18 U.S.C. § 3282(a)'s five-year
statute of limitations. The district court concluded that
Sampson's embezzlement of the funds at issue was
"complete" when he failed to remit the funds more
than a decade before the grand jury returned its indictment.
We hold that the district court made a premature factual
determination regarding the time at which Sampson, if guilty,
formed the requisite fraudulent intent. Accordingly, we
VACATE the judgment of the district court,
REINSTATE the two federal-program
embezzlement counts of Sampson's indictment, and
REMAND the case for further proceedings
consistent with this opinion.
Alexander A. Solomon, Assistant United States Attorney (David
C. James, Paul Tuchmann, and Marisa M. Seifan, Assistant
United States Attorneys, on the brief), for Richard P.
Donoghue, United States Attorney for the Eastern District of
New York, Brooklyn, NY, for Appellant.
Joshua
Colangelo-Bryan (Nathaniel H. Akerman, on the brief), Dorsey
& Whitney LLP, New York, NY, for Defendant-Appellee.
Before: Cabranes, Livingston, and Carney, Circuit Judges.
Debra
Ann Livingston, Circuit Judge.
From
1997 to 2015, John Sampson ("Sampson") served as a
member of the New York State Senate, representing the 19th
Senate District in Brooklyn. Sampson also served as a referee
in foreclosure actions for properties located in Kings
County, Brooklyn. By 2013, Sampson had purportedly embezzled
approximately $440, 000 from escrow accounts that he oversaw
as a referee. To prevent discovery of his embezzlement,
Sampson allegedly made efforts to tamper with witnesses and
provided false statements to federal law enforcement
officials.[1]
On
April 29, 2013, a grand jury in the United States District
Court for the Eastern District of New York returned an
indictment against Sampson that charged him with, among other
things, two counts of federal-program embezzlement under 18
U.S.C. § 666(a)(1)(A) in connection with his service as
a referee. The indictment alleges that, after receiving
surplus funds from foreclosure proceedings in 1998 and 2002
and placing the funds into escrow accounts, Sampson failed to
remit the funds to the Kings County Clerk ("KCC"),
as he was required to do. Over time, Sampson removed money
from the escrow accounts by cash withdrawals and electronic
transfers. The indictment alleges that Sampson committed (at
least) two discrete acts of embezzlement in 2008. These acts
form the basis for the indictment's two embezzlement
counts.[2]
Before
trial, Sampson moved to dismiss the two embezzlement counts
under Federal Rule of Criminal Procedure 12(b). Among other
things, Sampson argued that the two acts of embezzlement that
the indictment alleged occurred in 2008 actually
occurred in 1998 and 2002, when Sampson failed to remit the
funds to the KCC. Because 18 U.S.C. § 3282(a) imposes a
five-year statute of limitations on prosecutions for
embezzlement under 18 U.S.C. § 666(a)(1)(A), Sampson
argued that the district court should dismiss the counts as
time-barred. The district court granted Sampson's motion,
holding as a matter of law that the embezzlements in question
were "complete" in 1998 and 2002, over five years
before the grand jury returned its 2013 indictment.
On
appeal, the government contends that the district court erred
by concluding pretrial, and as a matter of law, that Sampson
necessarily formed the fraudulent intent required for the
charged embezzlements-and thus completed those
embezzlements-once he failed to remit the funds. We agree.
Accordingly, we reinstate the two federal-program
embezzlement counts of Sampson's indictment and remand
for further proceedings consistent with this opinion.
BACKGROUND
I.
Factual Background[3]
Sampson
was admitted to the New York Bar in 1992. Beginning in the
1990s, Justices of the Supreme Court of the State of New York
periodically appointed Sampson to serve as a referee in
foreclosure actions for Kings County properties.
Sampson's duties as a referee included conducting the
sale of a foreclosed property, using the proceeds of the sale
to pay any outstanding lienholders, and tendering any
remaining surplus funds to the KCC. The KCC would then allow
the prior owners of the property-as well as "any other
interested parties"-to collect from these surplus funds.
Gov't App'x at 39, ¶ 12.
As
noted above, Sampson also served as a member of the New York
State Senate from 1997 to 2015, representing the 19th Senate
District in Brooklyn. Sampson held many high-ranking roles
during his tenure in the Senate, including leader of the
Democratic Conference of the Senate from June 2009 to
December 2012, and Minority Leader of the Senate from January
2011 to December 2012. Sampson continued to serve as a
referee for foreclosure actions in Kings County during his
time in the Senate.
The
embezzlement counts in Sampson's indictment focus on
Sampson's alleged misappropriation of surplus funds in
two foreclosure actions in Brooklyn: one involving property
located at 165 Forbell Street ("the Forbell Street
Property"), and the other involving property located at
1915 Eighth Avenue ("the Eighth Avenue Property").
1.
The Forbell Street Property Action
On
February 17, 1998, a Justice of the Supreme Court of the
State of New York appointed Sampson as referee for the
foreclosure sale proceeding for the Forbell Street Property.
On October 7, 1998, Sampson informed the Supreme Court that
the foreclosure sale resulted in surplus funds of
approximately $84, 000. As required by the court order and
judgment in the case, Sampson placed these funds in escrow in
a bank account. Sampson registered the account under the name
"John L. Sampson as Referee" (the "Forbell
Street Referee Account"). Although the court order
directed Sampson to open this escrow account at Citibank,
Sampson opened it at Chase Bank.
The
court order also required Sampson to remit the surplus funds
to the KCC within five days of receiving and ascertaining
them. State law imposed the same obligation. See
N.Y. Real Prop. Acts. L. § 1354(4). But Sampson failed
to do so-and in fact never remitted the surplus funds.
Instead, between July 1998 and June 2008, Sampson withdrew or
transferred approximately $80, 000 of the $84, 000 surplus
from the escrow account for his own use. For example (and as
specified in the indictment), on or about February 13, 2008,
Sampson transferred $8, 000 from the Forbell Street Referee
Account into his personal bank account.
2.
The Eighth Avenue Property Action
On
March 18, 2002, a Justice of the Supreme Court of the State
of New York appointed Sampson as a referee for the
foreclosure sale proceeding for the Eighth Avenue Property.
On June 28, 2002, Sampson informed the Supreme Court that the
foreclosure sale resulted in surplus funds of approximately
$80, 000. As required by the judgment in that case, Sampson
placed these funds in escrow in a bank account registered
under the name "John L. Sampson Recv [Receiver] Fleet
National Bank" ("Eighth Avenue Referee
Account"). Although the court order directed Sampson to
open this escrow account at an Independence Savings Bank
branch office, Sampson opened it at an HSBC branch office
instead. Much like the Forbell Street Property foreclosure,
both the judgment in the Eighth Avenue Property Action and
New York State law required Sampson to remit the surplus
funds to the KCC within five days of receiving and
ascertaining them. But Sampson never did so. Starting in
approximately 2002, he gradually removed funds from the
account. By July 2006, a balance of only $55, 167.94
remained.
On or
about July 20, 2006, Sampson asked a Queens businessman named
Edul Ahmad ("Ahmad") to help him repay money that
he had misappropriated. Ahmad agreed to help Sampson. On or
about July 21, 2006, Ahmad provided Sampson with three bank
checks totaling $188, 500. One of the bank checks was in the
amount of $27, 500. The apparent purpose of this bank check
was to allow Sampson to replenish the money he had taken from
the Eighth Avenue Referee Account. Accordingly, Sampson
combined the $27, 500 check with the $55, 167.94 remaining in
the Eighth Avenue Referee Account to purchase a bank check in
the amount of $82, 677.94. This bank check was made payable
to the KCC.
But
Sampson never gave this check to the KCC. Instead, about two
years later, on June 7, 2008, Sampson exchanged this $82,
677.94 bank check for eight bank checks worth $10, 000 each,
and one bank check for $2, 667.94. Each of the checks was
made payable to "John Sampson." On or about and
between June 12, 2008 and January 12, 2009, Sampson redeemed
two of the $10, 000 bank checks for cash, negotiated the $2,
667.94 bank check, and deposited three of the $10, 000 bank
checks into his personal bank account. Sampson simply
retained (and never negotiated) the remaining three $10, 000
checks.
II.
Procedural History
As
noted above, on April 29, 2013, a grand jury in the United
States District Court for the Eastern District of New York
returned a nine-count indictment against Sampson, charging
him with, inter alia, two counts of federal-program
embezzlement. Count 1 charges Sampson with embezzling funds
from the Forbell Street Referee Account. It alleges that
Sampson committed embezzlement under 18 U.S.C. §
666(a)(1)(A) on or about February 13, 2008, when he
transferred $8, 000 from the Forbell Street Referee Account
into his personal bank account.[4] Count 2 concerns Sampson's
alleged embezzlement from the Eighth Avenue Referee Account.
Count 2 alleges that Sampson committed embezzlement under 18
U.S.C. § 666(a)(1)(A) on or about June 7, 2008 when he
exchanged the $82, 677.94 bank check made out to KCC for nine
bank checks made payable to Sampson himself.
On June
20, 2014, Sampson moved to dismiss Counts 1 and 2 of the
indictment pursuant to Federal Rule of Criminal Procedure
12(b). Sampson argued, inter alia, that 18 U.S.C.
§ 3282(a) imposes a five-year statute of limitations on
prosecutions for embezzlement under § 666(a)(1)(A), and
that the embezzlements at issue in this case were
"complete"-and the statute of limitations began to
run-when he failed to remit the surplus funds to the KCC in
1998 and 2002. The government opposed Sampson's motion,
arguing, inter alia, that Sampson's Rule 12(b)
motion was not ...