Opinion ID: 713017
Heading Depth: 2
Heading Rank: 2

Heading: Statute of Limitations Defense to Some Misapplication Counts.

Text: 61 Counts 7-14 charge Vebeliunas with misapplication of bank funds in violation of 18 U.S.C. § 657. The conduct charged in these counts occurred in the summer of 1984. At that time, the statute of limitations for this offense was five years, as specified by the general statute of limitations for noncapital offenses provided by 18 U.S.C. § 3282. Effective August 9, 1989, however, a new ten-year statute of limitations for violations of § 657 was established by the enactment of § 961(l )(1) of the 1989 Act, 103 Stat. 501 (1989). Section 961(l )(1) added § 3293 to Title 18; § 3293 specifies a ten-year statute of limitations for violations of § 657. Section 961(l )(3) provides, however, that: The amendments made by this subsection shall apply to an offense committed before the effective date of this section, if the statute of limitations applicable to that offense under this chapter had not run as of such date. 103 Stat. 501. 62 Thus, the new ten-year statute of limitations governed conduct that occurred before its effective date only if the statute of limitations otherwise applicable to that conduct had not run as of August 9, 1989. Vebeliunas contends that: (1) he assured the straw borrowers prior to August 9, 1984 that they would not have to repay the loans which they borrowed from Kasa; (2) the violation of § 657 was complete at that juncture; and (3) the five-year limitations period accordingly expired before August 9, 1989. The government argues that the violation of § 657 was not complete until all of the borrowed funds were disbursed, which occurred after August 9, 1984, and in any event that Vebeliunas waived the limitations defense. 63 Vebeliunas unsuccessfully moved before trial to dismiss counts 7-14 on the basis of the statute of limitations. However, no jury instruction was requested at trial concerning the issue. The issue was raised in a posttrial motion by Vebeliunas for acquittal or a new trial. 64 The district court denied the posttrial motion at the outset of the sentencing hearing both on the merits and on the basis of waiver. When the matter was again raised later in the sentencing hearing, the government argued against Vebeliunas' limitations defense on both grounds, and the court responded that in any event the defense failed on the merits without explicitly reiterating the waiver ground of decision. Vebeliunas contended at the oral argument of this appeal that the court decided the limitations issue solely on the merits, and that we should address only the merits of the issue on this appeal. 65 We disagree. As we read it, the record does not support Vebeliunas' claim that Judge Amon abandoned the waiver ground as a basis for denying his limitations defense. In our view, Judge Amon reiterated both grounds when the limitations issue was revisited, but cut off discussion of the waiver issue by noting that she viewed the claim as failing on the merits, as well. 66 In any event, we do not believe that Vebeliunas waived the limitations defense by failing to request a jury instruction on the issue. His limitations argument is premised upon a legal position that he had argued unavailingly to the district court in a pretrial motion. United States v. Grammatikos, 633 F.2d 1013, 1022 (2d Cir.1980), upon which the government relies to argue waiver, is distinguishable because the limitations issue in that case was one of fact to be decided by the jury. When, as in this case, the limitations argument is purely an issue of law, there would be no point in requiring a party to seek a jury instruction in the aftermath of an unsuccessful pretrial motion. Vebeliunas raised the issue in a pretrial motion that was denied by the district court. If, as the district court ruled in response to that motion, the date of disbursement of the borrowed funds controls the limitations issue, there was no factual issue left for the jury's consideration. See infra note 4. We turn to the merits of Vebeliunas' limitations argument. 67 Vebeliunas directs that argument to counts seven through fourteen of the indictment. These counts all assert that funds were disbursed at various times in August 1984. 4 Vebeliunas contends, however, that assurances were provided to the straw borrowers prior to August 1984 that they would not be required to repay the loans, that the violation of 18 U.S.C. § 657 5 was complete at that juncture and therefore commenced the running of the statute of limitations, that Judge Amon so instructed the jury, and that these counts of the indictment are accordingly time-barred. We disagree. 68 Vebeliunas invokes United States v. Stuart, 718 F.2d 931, 933-34 (9th Cir.1983), in support of this argument. He cites Stuart for the proposition that actual disbursement of funds is not required for a § 657 violation. See 718 F.2d at 933-34. In that case, the defendant, a bank employee, had prepared a $40,000 cashier's check with the intention to steal that amount from an account at the bank, but the plan was frustrated when a party to whom the check was tendered called the bank for verification, which resulted in the check being dishonored by the bank. Holding that actual disbursement of money is not required under section 657, id. at 934, the Ninth Circuit affirmed the district court's denial of Stuart's motion for acquittal, id. 69 The same court has squarely held, however, that in a case where funds are actually disbursed, as here, the crime is complete when the funds leave the control of the institution from which they are misapplied. In United States v. Musacchio, 968 F.2d 782 (9th Cir.1991), that court ruled as follows: 70 A statute of limitations begins to run when the crime is complete. Toussie v. United States, 397 U.S. 112, 115, 90 S.Ct. 858, 860, 25 L.Ed.2d 156 (1970) (citing Pendergast v. United States, 317 U.S. 412, 418, 63 S.Ct. 268, 271, 87 L.Ed. 368 (1943)). A crime is complete as soon as every element in the crime occurs. The misapplication crime charged in this case was complete on or about June 28, 1983, when the $5.3 million and a note for $4 million left the control of Columbus Savings. The indictment was returned less than five years later, on June 17, 1988. The statue of limitations did not bar the bringing of this action. 71 968 F.2d at 790; see also United States v. Persico, 832 F.2d 705, 713 (2d Cir.1987) (The limitations period is measured from the point at which the crime is complete. (citing Toussie, 397 U.S. at 115, 90 S.Ct. at 860)), certs. denied, 486 U.S. 1022, 108 S.Ct. 1995, 1996, 100 L.Ed.2d 227, 488 U.S. 982, 109 S.Ct. 532, 102 L.Ed.2d 564 (1988). 72 We agree with this analysis. Accordingly, because funds were concededly disbursed after August 9, 1984 with respect to each of the misapplications charged in counts seven through fourteen, see supra note 4, the district court correctly ruled that none of these counts were barred by the statute of limitations. We add that Judge Amon did not provide any contrary instruction to the jury. Her charge that [w]illful misapplication includes situations where the official ... assures a named borrower that he or she will not be responsible for repayment was directed to defining an element of that crime, not to any determination regarding when the crime is complete so as to trigger the statute of limitations. 73