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United States v. Sampson

United States Court of Appeals, Second Circuit

August 6, 2018

United States of America, Appellant,
v.
John Sampson, Defendant-Appellee.

          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 ...


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