Second Circuit Criminal Law Blog

Indictment Charging Violation of 18 U.S.C. § 641 Should Allege Value of Stolen Property

In United States v. Lee, 14-548, the Second Circuit (Kearse, Cabranes, Chin) held that the value of stolen property is an element of a felony offense under 18 U.S.C. § 641 and that, therefore, a grand jury indictment charging the defendant for a felony offense under that statute should have alleged the value of the property.  Nevertheless, the Second Circuit concluded that the failure to do so in this case was harmless error and affirmed the defendant’s conviction.  This case—which seems to be straight out of the files of the newest prosecutor in the SDNY General Crimes Unit—considers some weighty legal issues in the context of a straightforward offense.

The Relevant Statute And The Charged Offense

Section 641 of Title 18 provides, in relevant part, that whoever “steals . . . or without authority sells” any “thing of value of the United States or of any department or agency thereof,” shall be fined and imprisoned no more than 10 years.  But Section 641 also states that, if the value of the stolen property is $1000 or less, that person shall be fined and imprisoned for no longer than 1 year.  The $1000 threshold, therefore, is necessary to make a Section 641 offense into a felony; smaller theft from the government is only a misdemeanor.

The defendant, Destin Lee, was a senior tractor-trailer operator at a U.S. Postal Service facility charged under § 641 with stealing pallets – flat structures used to move large quantities of mail and apparently of some value for resale to recyclers – between 2011 and 2013.

The defendant was charged in a criminal complaint alleging that, in 2012, he stole “approximately two trailers full of pallets each week, with each trailer containing between 400 and 500 pallets,” and that in 2013 he supplied approximately 10 truckloads of pallets per month and he received $1 per pallet.  Lee was indicted in February 2014, charged with one count of violating § 641.  The grand jury later handed down three superseding indictments.  The S3 Indictment handed down in September 2014 did not state the value of the stolen property.

Two weeks before trial, the Government submitted its requested jury instructions, including an instruction stating that, in order to find Lee guilty of the offense charged, the jury must find beyond a reasonable doubt that the value of the stolen property was greater than $1000. According to the testimony adduced at trial, the defendant participated in stealing at least 15,000 pallets during the years covered in the S3 Indictment, amounting to at least $225,000 in loss to the government (which paid $15-$20 per pallet; one wonders why the government does not purchase recycled pallets for $1 each).  Near the close of trial, the defendant objected to the Government’s request to instruct the jury that to convict him they had to find he stole more than $1000 of property, arguing that the S3 Indictment did not charge the value element.  After trial resumed, the Government apparently realized its error and it informed the court that the grand jury had returned a further superseding indictment (the “S4 Indictment”) that charged that the value of the stolen property was greater than $1000. 

The District Court (Briccetti, J.) arraigned the defendant on the S4 Indictment but ruled that the trial would continue under the S3 Indictment.  The District Court ruled that the value of the property was not an element of the crime itself but nonetheless asked the jury to make a finding on the value of the stolen pallets.  The jury found the defendant guilty and the District Court sentenced him to 30 months’ imprisonment.  The defendant appealed.

The Issue Presented And The Parties’ Contentions

By way of background, in Apprendi v. New Jersey, 530 U.S. 466, 476 (2000), the Supreme Court held that “any fact (other than prior conviction) that increases the maximum penalty for a crime must be charged in an indictment, submitted to a jury, and proven beyond a reasonable doubt.”  Apprendi involved a state statute and the court made explicit that it did not “address the indictment question separately,” as the Fifth Amendment right to “indictment of a Grand Jury” has not been held to apply to the states.  Id. at 477 n.3. 

On appeal, the defendant argued that because the S3 Indictment under which he was tried did not allege that the stolen property was worth more than $1000, his conviction for a felony under Section 641 violated the rule set forth in Apprendi and the Grand Jury Clause of the Fifth Amendment, which requires that elements of a crime be charged in the indictment.  The defendant that by “grafting onto the S3 Indictment the value element,” the Government constructively amended the indictment, entitling him to automatic reversal of his conviction.

The Government argued – contrary to its requested jury instruction – that the value of the stolen property is not an element of the crime and therefore need not be alleged in the indictment.  The Government relied on an earlier Second Circuit case, United States v. Outen, 286 F.3d 622, 628 (2d Cir. 2002), which applied Apprendi to a situation involving drug quantities and held that the default statutory provision was that which “states a complete crime upon the fewest facts.”  According to the Government, § 641’s language describing the felony violation does not refer to the value of the stolen property – that reference to value is made only in connection with a mitigating factor.  In other words, the Government contended that the “default” crime was a felony violation of § 641 and that a finding with respect to the value was an element of possible mitigation, not an element of the offense.

Value Is An Element Of The Offense

The Second Circuit agreed with the defendant that the value of the stolen property is an element of the offense under § 641, which requires that a defendant steal a “thing of value” and, therefore, that “value” is “integral to the prohibition.”  If the Government only proved that the stolen property had “some” value, but did not prove that the value exceeded $1000, it would have proved only a misdemeanor violation, i.e., “a complete crime upon the fewest facts.”  The Second Circuit’s holding was in line with those of most other Circuits to have addressed the issue.  Indeed, this was the rule in the Circuit even before ApprendiSee United States v. Robie, 166 F.3d 444, 449 (2d Cir. 1999) (“there must be both charge and proof [of] the value of the property stolen”).  Furthermore, the court found considerable support in the reasoning of other Supreme Court cases emphasizing that, where the determination of a particular fact drastically increases the penalty for a crime, typically that fact is an element of an offense that must be decided by the jury. 

Because the value of the property was an element of the offense under § 641, the Second Circuit held that, under the Grand Jury Clause of the Fifth Amendment, the value should have been charged in the indictment.  Nevertheless, following a discussion of structural and non-structural constitutional errors, the court arrived at the conclusion that an error of this sort was non-structural and subject to harmless error analysis.  This conclusion seemed foregone given prior precedent:  even the lack of a finding of an offense element by the trial jury is non-structural.

The court then turned to the defendant’s argument alleging a constructive amendment of, and variance from, the grand jury indictment.  Noting the animating principles underlying the constitutional requirement for an indictment – notice and double-jeopardy protection – the Second Circuit concluded that an indictment’s failure to allege an element that increases the authorized punishment from the misdemeanor to the felony level may be harmless if “the concerns as to fair notice and double-jeopardy protection are otherwise satisfied.” 

Here, the court concluded, in light of the criminal complaint, the requested jury instructions, and the evidence, the defendant was clearly on notice that the Government intended to prove that he stole more than $1000 worth of property.  Indeed, defense counsel admitted as such.  Furthermore, the S3 Indictment gave the defendant specific notice of the nature of the offense and the core criminal conduct to be proved at trial and afforded him full protection against a subsequent prosecution for the same conduct.  Finally, the court concluded, there was ample evidence on which to convict the defendant of a felony offense under § 641.  As a result, the Second Circuit determined that, although it was constitutional error to omit from the indictment the value of the stolen property, under the circumstances, the error was harmless.  Finding no merit in any of the defendant’s remaining evidentiary challenges, the Second Circuit affirmed the conviction.

The issue presented in this appeal did not sneak up on the government.  It has been the rule for many years that facts that increase the defendant’s sentencing exposure must be alleged in the indictment and the omission here must have been an inadvertent oversight by the prosecutor and his supervisor.  Once the Court held that this preserved error was subject to harmless error analysis, the Court’s decision to affirm may have been unavoidable.  It was difficult for the Court to identify prejudice to the defendant.  The defendant was not surprised by the government’s evidence of value, nor was it unable to prepare a defense to that element.  Particularly damning was trial counsel’s statement that he “always believed the government was seeking to prosecute [Lee] for a felony.”  Also, the Court seemed to recognize the strength of the government’s case on value.  As a result of these factors, the Court gave the government a mulligan on its failure to obtain an indictment that included all of the elements of the offense and affirmed.  Perhaps on other facts—weaker evidence or greater uncertainty over the charged offense—a reversal might have been possible.  One can expect that this error is unlikely to recur, at least in SDNY, given the close call here.

-By Elena Steiger Reich and Harry Sandick