In U.S. v Doran, Dr. James Doran was convicted under 18 U.S.C. 666 of embezzlement form the Florida State University (FSU) as an organization receiving federal funds. He argued on appeals that he is entitled to a judgment of acquittal because any embezzlement was not from FSU and that the government did not prove that the victimized organization under the statutes was a recipient of federal benefits. Under the federal statute it is a federal crime for and agent of an organization to embezzle or convert to the use of any person other than he rightful owner any property valued at $5,000 or more that is owned or in the custody of that organization, government, or agency. The provision also requires that the organization, government or agency receive in any one year period benefits in excess of $10,000 under a federal program involving a grant contract subsidy, or other form of federal assistance.
The facts as they unfolded at trial showed that Doran was a professor in the College of Business of FSU and was a director and officer of the Student Investment Fund (SIF) a non-profit corporation established by FSU for charitable and educational purposes. He had a signatory authority over the SIF bank account. During his tenure he transferred SIF money from the SIF accounts to his own personal account. This embezzlement was discovered after an investigation. He was charged in an indictment that alleged he embezzled funds or property from FSU which it described was the recipient of federal benefits.
On appeal he challenged his conviction on the grounds that the SIF was the victimized organization under section 666 but that it received no federal benefits. He maintained that SIF and FSU are separate entities. The government’s response was that the embezzlement by Doran came within the ambit of section 666 because the SIF was closely affiliated with FSU which did receive millions of federal dollars and that Doran was a FSU professor and an agent of FSU when he committed the crime.
The court agreed with the defendant. Relying on United States v. McLean, a case where a city commissioner of Margate, Florida took a bribe in return for helping to obtain a construction grant from the Margate Community Redevelopment Agency which did not receive federal funds event though the city of Margate did.
Here the evidence showed that SIF’s funding began with $300,000 in donations from private sources. The FSU foundation later added one million dollars but the foundation’s funds came from private donors and not from FSU. The SIF maintained its own bank account sand no money was funneled from FSU to SIF. It had no power to obtains assets of the State of Florida or the University.
Even though the appellate court found that the federal crime of embezzlement statute was expansive, the court found that it cannot be “cast so widely as to encompass the wrongdoing that occurred here, for the government has not demonstrated any federal interest.” The meaning of the term “benefits” in the statutes should not be interpreted as limitless. Even though Doran was a director or agent of the SIF, his employment as a professor at FSU was irrelevant inasmuch as he did not embezzle any FSU funds. An excellent criminal defense lawyer will review a federal criminal statute carefully to make certain the facts fit the federal jurisdiction.