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Can a Year-Long Embezzlement Constitute One Criminal Episode?

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by: Ryan • August 1, 2011 • no comments

For this post, I'm using "embezzlement" not just to reference intermittent theft from one's employer over a long period of time but also benefits fraud, where the defendant has obtained a string of checks over a long period of time based on a fraudulent application for, say, unemployment or veteran's benefits.

In these cases, there are usually statutory and constitutional arguments to be made against the indictment pre-trial. St v. Savastano is important but by no means is it the only way of challenging these charges. Here, I want to focus on an argument to be made post-verdict, that is, at sentencing, either after trial or any other open-sentencing situation.

Often, people who are charged with these crimes have no prior criminal history. Consequently, they are not subject to prison or a repeat property offender offender sentence (under ORS 137.717) for the first count. But depending on the charges, they may be subject to prison (and a REPO sentence) on count 2 or 3 or 4, and there may be a dozen counts total, which could result in a lot of prison.

However, the idea that they are subject to prison on the subsequent counts hinges on the finding that these crimes arise from separate criminal episodes. And the state will say, "well, we aggregated all the thefts from June into count 1, all the thefts from July into count 2, all the thefts from August into count 3, therefore the dates don't overlap and these are all separate criminal episodes."

However, if you convince the judge that the crimes all "cross-relate," then it's one criminal episode and your client is only looking at jail, not prison.

First of all, here's the basic standard, which has been relied on in just about every criminal episode case from the last 20 years:

"[If] a complete account of one charge necessarily includes details of the other charge, the charges must be joined to avoid a later double jeopardy defense to further prosecution. We construe this test of interrelated events as necessitating joinder only where the facts of each charge can be explained adequately only by drawing upon the facts of the other charge. Stated differently, the charge[s] must be cross-related." Boyd, 271 Or at 566 (footnote omitted; emphasis omitted and added).

There are a number of nuances to this standard, which I discuss in more detail here. But I'll keep it relatively simple for this post.

Let's say the defendant applies for government benefits, and for the next six months, he receives a check every month. He has never had to re-apply for the benefits. The application was fraudulent.

The state will argue that each check is a separate criminal episode. But you would argue that the state can't convict the defendant of count 1 without putting on evidence of the fraudulent application, and the state can't convict the defendant of count 2 without putting on evidence of the fraudulent application, and the same goes for all of the counts. Therefore, "a complete accounting" of one crime must reference the most important detail of the other crime. See Williamson v. Schiedler, 196 Or App 302, 101 P3d 364 (2004), where the court found one criminal episode despite the state's argument that if you left out a key fact regarding one crime, then you could argue the crimes didn't cross-relate. ("However, simply omitting the fact that the jury found that petitioner unlawfully possessed firearms as part of the commercial drug offenses would not provide a complete account of the charges.")

Also, in support of a finding of one criminal episode, there is some discussion in the case law that argues that a single criminal objective also factors into a finding of one criminal episode. State v. Kautz, 179 Or App 458, 466-467 (2002) ("On appeal, the state argues that the burglary and the robbery were not directed toward the same criminal objective. According to the state, the objective of the burglary was to steal Whitehead's property, and the objective of the robbery was to threaten Whitehead so he could escape with the property he had just stolen. We think that that kind of parsing of defendant's criminal objective is inconsistent with the intent of ORS 131.505(4).")

But now let's look at a more traditional embezzlement situation. A defendant takes money from her employer once a month for a couple of years. There is no one fraudulent application that is necessary to proving every count. Can the argument be made that these thefts constitute one criminal episode?

What complicates the answer is that the prosecutor has usually aggregated some of these thefts. Consequently, the June count (though there were 3 separate takings) is one criminal episode. The July count (though two separate takings of cash) is one criminal episode. This too is pretty arbitrary, and what it means is that a factual finding (that is, a finding of separate criminal episodes) is dictated not by facts of the case but the prosecutor's charging decision. How did we get to the point where the prosecutor can "create" facts that enhance a sentence?

But back to the main question. Can different thefts from the same employer constitute one criminal episode? It really will depend on the facts. So, the answer, I think, is sometimes yes, sometimes no. If it's just a matter of taking $xxx from the safe on a semi-regular basis, that's going to be a hard argument to make. But if the crime is a bit more sophisticated, involving, for example, ambiguous bookkeeping, and that they only way the state can prove the counts is to show a pattern of fraudulent activity that wouldn't be obvious in isolation, then you've got a stronger argument. (Perhaps your client works a register and there are a statistically high number of returns.) Your goal as defense attorney is to bring in as many facts as possible to show that "a complete accounting" of Theft 20 involves many of the details of Theft 1.

Once you identify those facts, you need to get them into evidence. Often in these cases, there will be a plea and open sentencing. If you just submit a bare bones admission in the plea petition, the facts you need to prove one criminal episode may not be put before the court in a way that the court can rely on them in making a ruling. (What you say at sentencing is irrelevant unless the prosecutor stipulates to those facts.) In fact, you may have to call witnesses, even after a plea.

These charges can bring sentences of years and years, usually for defendants who are almost certainly non-violent, and who might have the potential to pay restitution if not in prison. The sentences are also lengthened more by the creative charging of the prosecutor than the egregiousness of the crime. However, the assumption that these defendants should go away for years is so entrenched in our criminal justice system that merely arguing fairness and common sense can often be futile. (It's a cliched argument, but if a person is non-violent, and has some employment skills, I'd rather she be a tax- and restitution-contributor than a $40k/year drain on taxpayers.) Thus, we must be aggressive in our legal arguments to get to the right result.