After a jury convicted him of “two counts of making false
statements to a bank, in violation of 18 U.S. Code § 1014 (Counts One
and Four), and two counts of aggravated identity theft, in violation of 18 U.S. Code § 1028A (Counts Two and Three)”, David Miller appealed. U.S. v.
Miller, 2013 WL 5812046 (U.S. Court of Appeals for the 6th Circuit 2013).
The judge who had the
case sentenced Miller to “forty-five months imprisonment” plus “two years of
supervised release” and also “ordered him to forfeit $337,500.” U.S. v.
Miller, supra. This post examines the argument Miller made as to why his
convictions for aggravated identity theft should be reversed. U.S. v.
Miller, supra.
According to the opinion, the prosecution arose because
Miller and
his pastor William Wellons wanted to
buy a parcel of real estate from a farmer as an investment property. Wellons negotiated
with the farmer and agreed to purchase the land for a little over $790,000. The
purchase was set to close on May 30, 2007.
Miller formed Fellowship Investors, LLC
(`Fellowship’) to purchase the land and recruited investors to purchase
investment units in the company. Miller calculated that Fellowship needed
$900,000 in funding to cover the purchase price, costs related to acquiring the
land, and expenses associated with Fellowship's management. Eight investment
units valued at $112,500 each were established to raise the needed funds.
Miller and Wellons did not purchase an investment unit.
They . . . acquired an
ownership interest in Fellowship through their service to the company: Miller
obtained a 19.5% interest because he was Fellowship's manager and Wellons
obtained a 4.5% interest because he was Fellowship's secretary. Ultimately,
Miller secured $675,000 in investments before the closing date.
Because Miller had not raised $900,000 before the
closing, he approached First Bank to obtain a loan. Miller represented to Joe
Stocker of First Bank that the David E. Miller Development Company, Inc.
(`DEMCO’) . . . needed a $337,500 loan to purchase a piece of real property.
Miller told Stocker he wanted to purchase the property with cash, but had run out
of time to secure investors prior to closing and planned to pay off the loan
within six months with investor funds. First Bank agreed to loan $337,500 to
DEMCO, with the property that Fellowship was going to acquire pledged as
collateral.
Because DEMCO pledged Fellowship's
property as collateral, First Bank required a written resolution from the
members of Fellowship showing that they had authorized DEMCO to take such
action. On May 24, 2007, First Bank sent a letter to the closing attorneys
requesting that such a resolution be prepared before closing.
The closing
attorneys prepared a resolution, but it omitted a clause whereby the members of
Fellowship specifically authorized DEMCO to pledge Fellowship property as
collateral. First Bank supplied the necessary language, and the closing
attorneys updated the resolution.
U.S. v. Miller, supra. The opinion also explains that on May 25,
2007, the closing
attorneys sent the updated
resolution to First Bank, Wellons, and Miller's assistant for review. Wellons
noticed it was still incomplete because it did not list all members of
Fellowship. He contacted Miller for the member list. . . . After Miller
supplied Wellons with the names of all Fellowship members, Wellons handwrote
those names on the updated resolution, signed it as Fellowship's secretary, and
faxed it to the closing attorneys.
The Fellowship resolution contained two
false statements: (1) that all Fellowship members were present at a meeting,
and (2) that at this nonexistent meeting, they unanimously voted to allow the
property to be pledged as collateral for a $337,500 loan to DEMCO. When Wellons
signed the resolution, he did not know these statements were false because he
thought Miller had spoken to all members of Fellowship about the DEMCO loan and
they all agreed to allow DEMCO to pledge Fellowship property as collateral.
In
truth, Fellowship's members, other than Miller and Wellons, believed the
property was being purchased free and clear of any encumbrances and they did
not agree, nor would they have agreed if asked, to the property being pledged
as collateral.
U.S. v. Miller, supra. Finally, the opinion explains that a “few
months later,” First Bank
conducted a review of the loan file and
discovered that it did not contain a copy of the Fellowship resolution signed
by both Wellons and Miller. First Bank eventually obtained from the closing
attorneys a copy of the resolution, which had a heading indicating that it had
been faxed from DEMCO on July 23, 2007. Miller does not deny that his signature
is on that resolution or that First Bank required this resolution to close the
loan.
U.S. v. Miller, supra. In July of 2009, Miller told “Fellowship's
member investors for the first time that he had taken out a $337,500 loan to
pay for his investment in Fellowship and that Fellowship's property secured
this `personal loan.’” U.S. v.
Miller, supra.
On appeal, Miller argued that his convictions on Counts Two
and Three for
aggravated identity theft must be
reversed because, as a matter of law, he did not `use’ another person's name as
alleged in those counts. The government's prosecution theory was that Miller
`used’ the names of Fellowship members R. Mark Foster (`Individual A’ in Count
Two) and Michael Lipson (`Individual B’ in Count Three) by including their
names in the Fellowship resolution which falsely stated they were present at a
meeting of all Fellowship members in which they voted to allow Miller, as
Fellowship's managing member, to pledge Fellowship property for the DEMCO loan.
Miller asserts that 18 U.S.C. §
1028A does not criminalize this conduct because he only lied about what
Foster and Lipson did, but he did not `use’ their names or identities. The
government responds that the crux of these offenses is not that Miller claimed
Foster and Lipson did something they in fact did not do, but rather that Miller
`used’ their names to fraudulently obtain a loan from First Bank by
misrepresenting that he had the authority to act on behalf of those
individuals.
U.S. v. Miller, supra.
The Court of Appeals began its analysis of this issue by explaining
that whether a
criminal statute applies to the proven
conduct of the defendant is an issue of statutory interpretation that we review
de novo. U.S. v. Lumbard, 706 F.3d 716 (U.S. Court of Appeals
for the 6th Circuit 2013). . . . 18 U.S. Code § 1028A provides: `Whoever,
during and in relation to any felony violation enumerated in subsection (c),
knowingly transfers, possesses, or uses, without lawful authority, a means of
identification of another person shall, in addition to the punishment provided
for such felony, be sentenced to a term of imprisonment of 2 years.’ 18
U.S. Code § 1028A(a)(1).
Subsection (c) includes making a false
statement to a bank among the enumerated offenses, § 1028A(c)(4), and
`means of identification’ is a defined term that includes a person's name, §
1028(d)(7). Substituting the facts of this case into the statute's variables,
Miller committed aggravated identity theft if he knowingly used Foster's and
Lipson's names, without lawful authority, when he made the false statement to
First Bank that they had authorized him to pledge Fellowship property as
collateral for DEMCO's loan.
U.S. v. Miller, supra.
As noted above, the parties involved in this case “dispute[d]
only whether Miller `used’ Lipson's and Foster's names under the statute.” U.S. v. Miller, supra. The Court of Appeals explained that because
`uses’ is an undefined term, we `construe
it in accord with its ordinary or natural meaning.’ Smith v. U.S., 508 U.S. 223 (1993). This ‘”everyday meaning”’ reveals itself in `phraseology that
strikes the ear as “both reasonable and normal[.]’” Watson v. U.S., 552U.S. 74 (2007) (quoting Smith v. U.S. supra). Defined in isolation from its statutory context, the dictionary
meaning of the word `use’ is ‘”[t]o convert to one's service,” “to employ,” “to
avail oneself of,” and “to carry out a purpose or action by means of.”’ ”Baileyv. U.S., 516 U.S. 137 (1995) (quoting Smith v. U.S. supra).
The Supreme Court has noted the
`interpretational difficulties’ that the word `use’ poses because of its
frequent inclusion in statutory text and the numerous “different meanings
attributable to it.’ Bailey v. U.S.,
supra. That is why `[w]e consider not only the bare meaning of the word but
also its placement and purpose in the statutory scheme. [T]he meaning of
statutory language, plain or not, depends on context.’ Bailey
v. U.S., supra.
U.S. v. Miller, supra.
The Court of Appeals then explained that it was confronted
with two “equally reasonable interpretations” of the term “use”:
On one hand, relying upon dictionary
definitions, the government argues that Miller `used’ Foster's and Lipson's
names within the ordinary meaning of that verb in that he employed their names
to his benefit, converted their names to his service, and intentionally availed
himself of their names in order to falsely manufacture authority to encumber
Fellowship property for DEMCO's benefit. See Bailey v. U.S. supra.
This reasonable interpretation flows from the plain language of the
statute, which arguably criminalizes the generic `use’ of another person's name
when making a false statement to a bank. The government fully embraced this
broad interpretation at oral argument, conceding that if there is any false
statement about authority, which necessarily involves the `use’ of someone's
name, made in connection with a predicate offense under § 1028A(c), the
government can always charge aggravated identity theft in
addition to the underlying offense.
On
the other hand, relying on statutory purpose, context, and an unpublished
opinion from a district court in this circuit, Miller argues that one `uses’ a
person's name under the `aggravated identity theft’ statute only if one either
passes himself off as that person or acts on behalf of that person. See U.S.
v. Wilcox, 2010 WL 55964 (U.S. District Court for the Western District of Michigan 2010).
Miller acknowledges that although he may have lied about what Foster
and Lipson did, he maintains that this conduct does not constitute `use’ of
their names because he did not steal or possess their identities, impersonate
them or pass himself off as one of them, act on their behalf, or obtain anything of value in one of
their names. In other words, he did not `use’ Foster's and Lipson's names
within the meaning of § 1028A by merely lying about what they did.
U.S. v. Miller, supra (emphasis in the original).
The Court of Appeals noted that, when confronted with the
need to interpret a term used in a criminal statute, it usually relies on the
legislative history of the statute at issue and/or on other cases interpreting
the statute, but neither was useful here.
U.S. v. Miller, supra. It examined the relevant legislative history
but found it offered “no conclusive guidance” and also found that no other court had
addressed this issue, i.e., it was an issue of first impression . U.S. v. Miller, supra.
The court concluded, therefore, that the appropriate solution was to apply
the rule of lenity, which
`requires ambiguous criminal laws to be
interpreted in favor of the defendants subjected to them.’ U.S. v. Beals, 698
F.3d 248 (U.S. Court of Appeals for the 6th Circuit 2012). . . . `When
there are two rational readings of a criminal statute, one harsher than the
other, the rule of lenity tells us that we are to choose the harsher only when
Congress has spoken in clear and definite language.’ U.S. v. Brock, 501
F.3d 762 (U.S. Court of Appeals for the 6th Circuit 2007). . . .
Nothing inherent in the term `uses,’
its placement in the text of § 1028A, or the statute's legislative history
clearly and definitely indicates that the term, as applied to the names of
persons, is broad enough to reach the mere act of saying that the persons did
something they in fact did not do.
The ambiguity arising from the attempted
application of § 1028A to the facts of this case fits squarely within
the rule of lenity, and we resolve the uncertainty in Miller's favor. See U.S.
v. Ford, 560 F.3d 420, 425 (U.S. Court of Appeals for the 6th Circuit 2009) (`When
ambiguity clouds the meaning of a criminal statute, the tie must go to the
defendant’).
U.S. v. Miller, supra.
The court therefore held that
as a matter of law, Miller did not
`use’ a means of identification within the meaning of § 1028A by
signing a document in his own name which falsely stated that Foster and Lipson
gave him authority, as Fellowship's managing member, to act on behalf of
Fellowship and pledge its property for the DEMCO loan.
Accordingly, we reverse Miller's
convictions on Counts Two and Three.
U.S. v. Miller, supra. The Court of Appeals also, for other reasons, reversed Miller's
conviction on Count Four, affirmed his conviction on Count One, vacated his
sentence and remanded the case to the district court for “further proceedings
consistent with this opinion.” U.S. v. Miller, supra.
