1995 Decisions

Opinions of the United

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Precedential or Non-Precedential: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
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.