Opinion ID: 714125
Heading Depth: 3
Heading Rank: 3

Heading: Misapplication and Embezzlement (counts 16-24 (both Ross and Collori) and 25-29 (Ross only))

Text: 64 Ross and Collori challenge their convictions for misapplication under 20 U.S.C. § 1097(a), first by asserting that conversion and intent to defraud are necessary elements of the offense, and second by insisting that the government failed to prove these elements. The issue of whether conversion and intent to defraud are elements of misapplication under § 1097(a) was not fully briefed by the parties, 4 and we decline to resolve it today. Because we find that the government has put forth ample evidence to establish both conversion and fraudulent intent, we need not decide whether these elements are in fact necessary for conviction. 65 As support for their contentions that the government failed to prove either conversion or fraudulent intent, Ross and Collori cite two cases. In the first case, United States v. Kammer, 1 F.3d 1161 (11th Cir.1993), Kammer owned and operated a vocational training school in Mobile, Alabama. As her school began to deteriorate financially and students began to drop out, she neglected to promptly transfer unused Pell Grant funds from the school's operating account back to the federal funds trust account. Instead, she left the money in the operating account to pay the school's operating expenses, hoping to refund the government's money when the school increased its cash flows. The court defined conversion as an act of dominion or control over the property that seriously interferes with the owner's rights. Id. at 1165. Reasoning that Kammer had never appropriated any of the federal monies for her own use nor demonstrated any intent to indefinitely deprive the government of its money, the court found the evidence insufficient to convict Kammer of misapplication. Id. at 1166. 66 In the second case, United States v. Jakeway, 783 F.Supp. 590 (M.D.Fla.1992), the defendants operated cosmetology and business schools throughout the United States. Two of their schools' financial aid practices prompted the defendants' convictions: (1) when students would sign over excess GSL monies to one of the schools, the school would hold them in anticipation of subsequent expenses and would refund any unused balance at the student's graduation; (2) with the student's consent, the schools would use a student's excess Pell Grant monies to pay down that student's GSL debt obligations. With respect to the first practice, the Jakeway court held that merely deferring refunds too long (until graduation) did not evidence an intent to defraud nor a conversion of the property for the defendants' own use. Id. at 597-98. With respect to the second practice, the court noted that there was no statutory or regulatory prohibition against using excess Pell Grant monies against GSL debts and that the students had consented to this appropriation; as a result, the court could not find that the defendants had converted the money with an intent to defraud the government. Id. at 598-99. 67 Ross and Collori argue that their case is analogous to the factual situations in Kammer and Jakeway. On the contrary, this case presents exactly what the Kammer and Jakeway courts found to be missing from those prosecutions. The evidence depicts how Ross and Collori intentionally falsified documents and lied to students in order to fraudulently obtain more money than they were entitled to. They appropriated this money for their own personal uses and then made false statements and falsified more documents to conceal their wrongdoing. It is clear that in this case, as opposed to Kammer and Jakeway, the government has put forth plentiful evidence from which a jury could find both conversion and the defendants' intent to defraud. 68