Court Opinion

ID: 9895665
Source: CourtListenerOpinion
Date Created: 2023-11-08 15:00:38.921241+00
Date Added: 2024-06-11T09:12:23.283362
License: Public Domain

USCA11 Case: 22-13543    Document: 46-1      Date Filed: 11/08/2023   Page: 1 of 13

                                                    [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 22-13543
                           Non-Argument Calendar
                           ____________________

        UNITED STATES OF AMERICA,
                                                       Plaintiﬀ-Appellee,
        versus
        KYLE MELKONIAN,

                                                    Defendant-Appellant.

                           ____________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                     D.C. Docket No. 1:21-cr-20414-DPG-1
                           ____________________
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        2                     Opinion of the Court                22-13543

        Before LAGOA, BRASHER, and ABUDU, Circuit Judges.
        PER CURIAM:
              Kyle Melkonian appeals his conviction and sentence for theft
        of government funds, in violation of paragraph 2 of 18 U.S.C. § 641.
        For the reasons set forth below, we affirm.
            I.    FACTUAL       BACKGROUND           &    PROCEDURAL
                  HISTORY
               In 2021, a federal grand jury indicted Melkonian on one
        count of theft of government funds, charging him with “know-
        ingly and willfully” receiving, concealing, and retaining “with the
        intent to convert to his own use and gain” money belonging to the
        United States Social Security Administration (“SSA”), “knowing the
        money to have been stolen, purloined and converted.” The indict-
        ment contained a forfeiture provision, explaining that Melkonian
        must forfeit his real and personal property that constituted or was
        derived from the proceeds of the charged crime upon conviction.
               Melkonian pled not guilty and waived his right to a trial by
        jury. He proceeded to a bench trial on the following stipulated
        facts. Melkonian’s father (“P.M.”) lawfully received retirement ben-
        eﬁts from the SSA. P.M. lawfully received those beneﬁts until his
        death on October 15, 2006. P.M.’s entitlement to SSA beneﬁts
        ceased in the month of his death, but Melkonian, who lived with
        P.M. at the time he died, did not inform the SSA of P.M.’s passing.
        Thus, the SSA continued to pay the beneﬁts after P.M. died.
        Melkonian had no entitlement to P.M.’s retirement beneﬁts.
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        22-13543               Opinion of the Court                        3

               The SSA deposited P.M.’s SSA beneﬁts into an account at
        American Bank (the “American Bank account”). Melkonian knew
        of these deposits, that the SSA made them, and that he had no law-
        ful authority to access the account or to receive, retain, or use any
        of the money in it. Melkonian “knowingly and willfully” concealed
        P.M.’s death so he could continue to receive SSA beneﬁts to use for
        his own purposes, such as paying his bills and making personal pur-
        chases.
              P.M. also had a bank account at J.P. Morgan Chase Bank (the
        “Chase account”), which Melkonian had no legal authority to ac-
        cess. After P.M.’s death, Melkonian had a recurring check issued
        every three months in P.M.’s name from the American Bank ac-
        count which automatically deposited into the Chase account.
        Melkonian would then withdraw cash from the Chase account for
        his own use.
               After P.M.’s death, between 2011 to 2020, Melkonian re-
        ceived several letters addressed to P.M. from the SSA concerning
        P.M.’s beneﬁts. One of the letters stated that a SSA employee
        would call to speak with P.M. about the correct payment of the
        beneﬁts. When the employee called, Melkonian answered the
        phone, claimed to be P.M., provided P.M.’s personal information,
        and claimed to be living with his son “Kyle.” Melkonian did this
        “knowingly and willfully” in an eﬀort to “intentionally conceal”
        P.M.’s death so he could continue to receive the SSA beneﬁts. After
        the call, Melkonian received follow-up letters asking P.M. to appear
        at the local SSA ﬁeld oﬃce, but Melkonian never responded or
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        4                      Opinion of the Court                 22-13543

        appeared. SSA employees also visited Melkonian’s residence to
        speak with P.M., but Melkonian told them P.M. could not speak
        with them and instructed them to leave the property.
               Ultimately, the SSA learned of P.M.’s death in early 2020 and
        ceased making payments. By then, the SSA had deposited a total
        of $286,944 in beneﬁts into P.M.’s accounts. In April 2020, the gov-
        ernment seized the remaining $2,784.03 in the American Bank ac-
        count.
               The government presented no additional evidence and sub-
        mitted the case on the above stipulations. Melkonian moved for a
        judgment of acquittal, explaining that he did not dispute the basic
        facts of the case, but he did believe the basic facts did not suﬃ-
        ciently qualify as a violation of paragraph 2 of § 641. After addi-
        tional arguments, the district court denied the motion. Melkonian
        then presented no additional evidence and renewed his motion for
        an acquittal, requesting an opportunity to brief his arguments for
        the court. The district court granted Melkonian’s request for brief-
        ing and issued a continuance.
                In his brief, fashioned as a motion for reconsideration of the
        district court’s denial of his motion for a judgment of acquittal,
        Melkonian argued that the stipulated facts failed to show that he
        knew the money was stolen separately from the facts showing he
        was the actual thief, nor did the evidence suﬃciently establish that
        the SSA deposits were even stolen. The government opposed
        Melkonian’s arguments.
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        22-13543               Opinion of the Court                        5

               At a hearing, following additional arguments, the district
        court found Melkonian guilty of theft of government property and
        denied his renewed motion for acquittal. The court found the evi-
        dence suﬃciently established that Melkonian knew that the money
        was stolen or converted due to the number of payments involved
        and the active steps he took to conceal P.M.’s death.
               Before sentencing, a probation oﬃcer prepared Melkonian’s
        presentence investigation report (“PSI”), which recommended
        denying him the acceptance of responsibility reduction, to which
        Melkonian objected. The PSI also set Melkonian’s oﬀense level at
        18 and assigned him to criminal history category I, meaning his
        guideline imprisonment range was 27 to 33 months. The PSI noted
        the maximum ﬁne Melkonian could face was $573,888, pursuant to
        18 U.S.C. § 2571(d), and that the guideline ﬁne range was between
        $10,000 to $100,000, pursuant to U.S.S.G. § 5E1.2(c)(4).
               Meanwhile, Melkonian submitted a pro se letter to the court
        reiterating that he did not believe a “theft” occurred and explaining
        that “if ” taxpayers had been harmed, he “would be ashamed and
        genuinely remorseful.” He also stated that “if ” he had been
        “greedy,” he “would also feel very sorry and low even for taking
        money that [he] viewed as akin to non-transparent intellectual
        property that was not owned by the government.”
              The government moved for forfeiture in the amount of
        $284,159.97, the diﬀerence between the total paid after P.M.’s death
        and the amount recovered from the American Bank account. The
        government requested substitute forfeiture of all real estate owned
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        6                      Opinion of the Court                 22-13543

        by Melkonian, including his residence, explaining that it had not
        been able to locate all directly forfeitable property. Melkonian op-
        posed the forfeiture, arguing that it would violate the Excessive
        Fines Clause of the Eighth Amendment.
                At the sentencing hearing, Melkonian argued that he was en-
        titled to a reduction for acceptance of responsibility. The court
        overruled Melkonian’s objection, citing to Melkonian’s letter to the
        court.
               Then, after considering the statutory sentencing factors, the
        parties’ arguments, and the PSI’s recommendation, the court sen-
        tenced Melkonian to fourteen months’ imprisonment and three
        years’ supervised release, declined to impose a ﬁne, and ordered
        him to pay $284,159.97 in restitution. The court then granted the
        government’s motion for forfeiture, noting that the impact on
        Melkonian could be determined once his house was sold.
        Melkonian’s appeal followed.
            II.   STANDARD OF REVIEW
                We review de novo whether evidence suﬃciently supports a
        conviction. United States v. Isnadin, 742 F.3d 1278, 1303 (11th Cir.
        2014). “A determination of whether a defendant accepted respon-
        sibility for his crimes is reviewed for clear error.” United States v.
        Williams, 627 F.3d 839, 844 (11th Cir. 2010). Finally, we review de
        novo whether a forfeiture order is constitutionally excessive. United
        States v. Browne, 505 F.3d 1229, 1278 (11th Cir. 2007).
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        22-13543                Opinion of the Court                           7

           III.    DISCUSSION
                   A. Sufficient Evidence Supports Melkonian’s Conviction.
               On appeal, Melkonian continues to argue that insuﬃcient
        evidence supports his conviction because the stipulated facts never
        established that he knew the funds in his father’s account were sto-
        len upon deposit. He alternatively argues that, even if the money
        was stolen, he could not receive stolen property from himself.
                Evidence suﬃciently supports a conviction “if a reasonable
        trier of fact could ﬁnd that the evidence established guilt beyond a
        reasonable doubt.” Isnadin, 742 F.3d at 1303 (quoting United States
        v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009)). In cases involving
        bench trials on stipulated facts, the test is “whether the judge could
        accept the stipulated facts, considered in the light most favorable to
        the government, as adequate and suﬃcient to support the conclu-
        sion that the defendant was guilty beyond a reasonable doubt.”
        United States v. Moore, 427 F.2d 38, 41-42 (5th Cir. 1970).
               Paragraph 2 of § 641 prohibits the receiving, concealing, or
        retaining of government property “with intent to convert it to his
        use or gain, knowing it to have been” stolen or converted. 18 U.S.C.
        § 641. To convict a defendant for theft of government property
        under paragraph 2, the government must establish three elements:
        (1) the money referenced in the indictment belonged to the United
        States or a United States agency; (2) the defendant appropriated the
        money to his own use; and (3) the defendant did so knowingly with
        the intent to deprive the government. United States v. McRee, 7 F.3d
        976, 982 (11th Cir. 1993) (en banc); see also United States v. Rodgers,
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        8                     Opinion of the Court                22-13543

        732 F. App’x 849, 851 (11th Cir. 2018) (unpublished) (relying on
        McRee and outlining the three elements needed to support a prose-
        cution brought under paragraph 2 of § 641).
               Generally, a defendant cannot be convicted under § 641 for
        both stealing government property and receiving the same prop-
        erty. Milanovich v. United States, 365 U.S. 551, 554-55 (1961). How-
        ever, Milanovich does not stand for the principle “that paragraph
        two of section 641 is uniformly inapplicable to the person who
        stole the Government property in question.” United States v.
        Minchew, 417 F.2d 218, 219 (5th Cir. 1969). Thus, the government
        can charge a defendant for receiving or retaining stolen govern-
        ment property even if the defendant was the one who originally
        stole the government property, just so long as the defendant is not
        then convicted and punished for both oﬀenses. Id. at 219-20.
               Here, the stipulated facts considered in a light most favora-
        ble to the government are suﬃcient to aﬃrm Melkonian’s convic-
        tion for violating paragraph 2 of § 641. Moore, 427 F.2d at 41-42.
        The stipulated facts establish that Melkonian purposefully con-
        cealed his father’s death from the SSA for 13 years, which caused
        the SSA to continue sending funds to P.M.’s American Bank ac-
        count. Melkonian knew the SSA improperly made these deposits
        because he admittedly understood that the deposits should have
        ceased upon his father’s passing. Instead of informing the SSA of
        P.M.’s death, Melkonian, knowingly and willfully, understanding he
        had no lawful authority to do so, accessed his father’s bank ac-
        counts and used money he was not entitled to, to pay his bills and
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        22-13543                Opinion of the Court                           9

        make personal purchases. Thus, based on the stipulated facts, the
        evidence establishes that Melkonian knew the improperly depos-
        ited funds, induced by his continued wrongdoing, were stolen
        from the government upon deposit into P.M.’s American Bank ac-
        count.
               Moreover, even if the initial deposits into the American Bank
        account would not put Melkonian on notice that the funds were
        stolen, his subsequent post-deposit activity surely did. Melkonian
        admittedly understood that the initial deposits into the American
        Bank account were not intended for him and that his father was not
        entitled to the payments due to his passing. Nevertheless,
        Melkonian knowingly and willfully accessed his father’s Chase ac-
        count to set up recurring payments from the American Bank ac-
        count. At the very least, the transfer of funds from the American
        Bank account to the Chase account, then to Melkonian’s posses-
        sion, establishes that he knew the funds he received and used were
        stolen. Thus, we aﬃrm on this issue.
                   B. The District Court Did Not Clearly Err in Declining to
                      Decrease Melkonian’s Offense Level Because He Did
                      Not Accept Responsibility.
                Melkonian also argues that the district court erred in not giv-
        ing him a reduction for acceptance of responsibility because he ad-
        mitted his guilt through the stipulation of facts and only proceeded
        to trial to preserve arguments related to the application of § 641 to
        his acts. He contends that the district court should have given more
        weight to the stipulations than to his letter which, he maintains,
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        10                      Opinion of the Court                  22-13543

        was incoherent and a reﬂection of his mental illness as opposed to
        his sense of remorse.
               District courts should decrease a defendant’s oﬀense level if
        he “clearly demonstrates acceptance of responsibility for his of-
        fense.” U.S.S.G. § 3E1.1(a). This reduction is given to a defendant
        as a “reward” for expressing remorse for his wrongdoing and who
        wants to reform his future conduct. Williams, 627 F.3d at 844. We
        will not set aside the district court’s determination on this issue un-
        less “the record clearly establishe[s] that a defendant has accepted
        personal responsibility.” United States v. Amedeo, 370 F.3d 1305,
        1320-21 (11th Cir. 2004).
                The Sentencing Guidelines explain that truthfully admitting
        the oﬀense conduct helps show acceptance of responsibility.
        U.S.S.G. § 3E1.1(a), comment. (n.1(A)). Furthermore, “[t]his ad-
        justment is not intended to apply to a defendant who puts the gov-
        ernment to its burden of proof ” except where the defendant goes
        to trial to preserve an issue that does not relate to factual guilt. Id.
        comment. (n.2).
                Additionally, in determining whether a defendant has ac-
        cepted responsibility, a court may consider, inter alia, “the of-
        fender’s recognition of the wrongfulness of his conduct, his re-
        morse for the harmful consequences of that conduct, and his will-
        ingness to turn away from that conduct in the future.” United States
        v. Scroins, 880 F.2d 1204, 1215 (11th Cir. 1989). A wide range of
        conduct can be considered, even the assertion of constitutional
        rights, so long as the conduct relates to whether the defendant has
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        22-13543                Opinion of the Court                         11

        accepted responsibility. United States v. Smith, 127 F.3d 987, 989
        (11th Cir. 1997) (en banc).
                Here, the district court did not clearly err in declining to de-
        crease Melkonian’s oﬀense level because the record does not clearly
        establish that he accepted responsibility. Amedeo, 370 F.3d at 1320-
        21. Melkonian’s letter to the district court evidenced his lack of
        actual remorse for the crime he committed. Melkonian disputed
        the thefts and emphasized that he would have felt remorse “if ” he
        thought he had actually committed a crime. The district court
        acted within its authority to consider Melkonian’s letter, and the
        record supports the court’s decision in ﬁnding that Melkonian
        failed to demonstrate an acceptance of responsibility. Thus, we af-
        ﬁrm on this issue.
                   C. The Forfeiture Order is Not Unconstitutional.
               Finally, Melkonian argues that the forfeiture order violates
        the Eighth Amendment because it is grossly disproportionate in
        consideration of the maximum guideline ﬁne, the money he used
        was not used for criminal activities, he was not the primary target
        of the statute, and his oﬀense was rooted on mere inaction.
               Where forfeitures are authorized and the government gives
        notices of the forfeiture in the defendant’s indictment, the district
        court must order forfeiture as part of the defendant’s sentence.
        United States v. Hernandez, 803 F.3d 1341, 1343 (11th Cir. 2015) (hold-
        ing that the district court erred in denying the government’s forfei-
        ture motion in prosecution for a violation of § 641). Theft of gov-
        ernment funds, as outlined in § 641, is subject to civil forfeiture
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        12                     Opinion of the Court                 22-13543

        pursuant to 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7)(D), and 28 U.S.C.
        § 2461(c). Id. Additionally, the government may move for a substi-
        tute forfeiture in instances where the defendant does not retain the
        stolen funds, meaning the government can take a defendant’s prop-
        erty that was involved in or is reasonably traceable to the crime to
        fulﬁl the forfeiture amount. United States v. Waked Hatum, 969 F.3d
        1156, 1166 (11th Cir. 2020).
               Because a forfeiture in this context is punishment for an of-
        fense, the forfeiture is considered a “ﬁne” within the meaning of
        the Eighth Amendment. Id. at 1167 (quoting United States v. Ba-
        jakajian, 524 U.S. 321, 328 (1998)). Under the Excessive Fines
        Clause of the Eighth Amendment, a punitive forfeiture is unconsti-
        tutional when “it is grossly disproportional to the gravity of a de-
        fendant’s oﬀense.” Id. (quoting Bajakajian, 524 U.S. at 334)). We
        consider three main factors to determine if a forfeiture violates the
        Eighth Amendment: (1) whether the defendant is within the class
        of persons the criminal statute was principally directed at; (2) the
        other penalties authorized by Congress or the Sentencing Commis-
        sion; and (3) the harm the defendant has caused. Id.
                “If the value of the forfeited property is within the permis-
        sible rage of ﬁnes under the relevant statute or sentencing guide-
        line, the forfeiture is presumptively constitutional.” Id. at 1168. In
        fact, “[w]e have upheld all forfeitures imposed by district courts in
        amounts up to twice the maximum authorized ﬁne.” United States
        v. Sperrazza, 804 F.3d 1113, 1127-28 (11th Cir. 2015) (collecting
        cases). The statutory maximum ﬁne for a § 641 violation cannot
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        22-13543               Opinion of the Court                       13

        be more than twice the gross loss. 18 U.S.C. § 3571(d). Addition-
        ally, the guideline maximum ﬁne for a defendant with an oﬀense
        level of 18 is $100,000. U.S.S.G. § 5E1.2(c)(3).
               Here, the forfeiture is not unconstitutional. First, Melkonian
        squarely ﬁts within the class of individuals § 641 is principally di-
        rected at—an individual who intentionally concealed his father’s
        death from the SSA to induce the SSA to continue issuing money
        to P.M.’s account for Melkonian’s personal use, knowing he was not
        the intended beneﬁciary. Moreover, the forfeiture amount falls
        well below the statutory maximum ﬁne allowed, meaning it is pre-
        sumptively constitutional. Finally, Melkonian fraudulently took al-
        most $300,000 from the United States for his own use and actively
        concealed the fraud, causing great harm. Thus, we aﬃrm on this
        issue.
           IV.     CONCLUSION
              For the reasons set forth herein, we AFFIRM Melkonian’s
        conviction and sentence.