Highlights from the Eleventh Circuit court of appeals

Conviction for misapplying federal funds reversed

January 26, 2013,



Jimenez was convicted of violating 18 U.S.C. § 666 for misapplying funds from a federally funded program. He challenged the factual sufficiency of his conviction to the 11th Circuit arguing that he did not misapply funds within the meaning of 666(a)(1)(A). The 11th Circuit found in United States v. Jimenez that no federal crime took place and reversed the conviction with directions to enter a judgment of acquittal. Because the facts are important in a judgment of acquittal, the background is set out here.

Jimenez was Deputy Director of Fiscal and Administrative Services for Hillsborough County's Head Start Program, a federally funded program that provides educational and health care to preschool children from low-income families. Jimenez's wife Melendez, a microbiologist, wrote a children's book intended to educate children "about germs and their relationship to disease" She sent her husband, Jimenez, an email suggesting that Head Start could use to the book to "encourage kids to read." Jimenez relayed the information to his peer at Head Start, Mason, who served as the Deputy Director of Program services. Mason knew that Jimenez's wife authored the book. Jimenez and Mason brought a copy of the book to Bell, a registered nurse with Head Start and asked Bell to look at the book for her opinion on whether to order copies of the book for the Head Start children. Bell nixed the idea because she thought the book was too advanced. Bell showed the book to Navejar, another official at Head Start, who recommended against purchasing the book because it implicated a conflict of interest for Jimenez's wife to profit from a head Start transaction. Bell and Navejar brought this concern to the attention of Knight, Bell's supervisor. Despite Bell and Navijar's concerns, Mason, who supervised Knight, told Bell to order the book. Because Bell did not have purchasing privileges, she referred the task to Navejar. Soon after, Jimenez e-mailed Navejar price quotes on the book. Mason initiated and approved a $9,000 order for 750 copies of the book. Melendez delivered the books, a report authorizing payment to Melendez was issued, and Jimenez signed a form acknowledging the books had been received. Shortly afterwards a check was issued to Melendez. Throughout this period, Head Start required every employee to complete disclosure forms within 45 days of any change in the conflict of interest status, including circumstances in which an employee's spouse entered into a contractual relationship with Head Start. Jimenez failed to file a disclosure the conflict of interest stemming from his wife's transaction with Head Start.

Jimenez was indicted and convicted of misapplying funds from a federal program and honest services fraud. The judge entered a judgment of acquittal for the honest services count but upheld the § 666(a) conviction. A conviction under § 666(a) requires the prosecution to show (1) Jimenez was an agent of Head Start, (2) he obtained funds by fraud or intentionally misapplied property of Head Start property in excess of 5,000, and (3) Head Start received federal assistance. The prosecution's theory was that Jimenez "intentionally misapplied" $9,000 in Head Start funds by brokering 750 copies of his wife's book. The court found the term "misapply" connotes the offender exercises some degree of power over the funds of the agency. There was no evidence demonstrating that Jimenez misapplied any Head Start funds. Even though there may have been an conflict of interest, standing alone without evidence of bribe or kickback is insufficient to sustain a conviction for intentionally misapplying funds for a violation of §666. The evidence showed it was Mason, not Jimenez, who approved purchase and directed the Head Start funds for payment of the book. Though Jimenez did not disclose his wife's financial stake in the transaction, the 11th Circuit is "reluctant to metamorphose every municipal misstep into a federal crime" and the court would not stretch the language of §666 to find a white collar crime here.

In case you missed it, please read my previous post:
An individual becomes a guidelines "victim" of an unlawful transfer of identification information when the information is used, January 19, 2013