Case 3:16-cr-00051-BR

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BILLY J. WILLIAMS, OSB #901366

United States Attorney
District of Oregon
ETHAN D. KNIGHT, OSB #992984
GEOFFREY A. BARROW
CRAIG J. GABRIEL, OSB #012571
Assistant United States Attorneys
ethan.knight@usdoj.gov
geoffrey.barrow@usdoj.gov
craig.gabriel@usdoj.gov
1000 SW Third Ave., Suite 600
Portland, OR 97204-2902
Telephone: (503) 727-1000
Attorneys for United States of America

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON
UNITED STATES OF AMERICA
v.
RYAN BUNDY and
KENNETH MEDENBACH,

3:16-CR-00051-BR
GOVERNMENTS MEMORANDUM
REGARDING ELEMENT OF INTENT TO
PERMANENTLY DEPRIVE UNDER
18 U.S.C. 641

Defendants.
The United States of America, by Billy J. Williams, United States Attorney for the
District of Oregon, and through Ethan D. Knight, Geoffrey A. Barrow, and Craig J. Gabriel,
Assistant United States Attorneys, respectfully submits this Memorandum Regarding the
Element of Intent to Permanently Deprive Under 18 U.S.C. 641 as it relates to Counts 4 and 5
of the Superseding Indictment filed herein.

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The Court has requested briefing on whether the crime of converting government
property in violation of 18 U.S.C. 641 has, as an element, the intent to deprive the government
of the use or benefit of its property permanently rather than just temporarily.

More than sixty

years ago, in Morisette v. United States, 342 U.S. 246 (1952), the Supreme Court indicated that it
did not.
The defendant in Morisette was charged with knowingly steal[ing] and convert[ing] to
his own use spent and rusting bomb casings that he had collected from an Air Force bombing
range and sold for scrap.

Id. at 247-48, 270.

He asserted at trial that he had innocently

misunderstood the casings to have been abandoned, contending he thus lacked the criminal intent
required to commit the crime. Id. at 248.

The district court ruled that any such mistake was

irrelevant to the charge of conversion, however, and he was convicted. Id. at 249. The Eighth
Circuit affirmed, holding that criminal conversion requires no element of criminal intent. Id.
at 250.
The Supreme Court reversed, holding that criminal statutes incorporating common-law
crimes are presumed to incorporate the common-law element of evil intent.

Although

knowing conversion was not a crime at common law, the Court imputed the same mens rea
requirement to that offense by analogy to the dominant offenses of embezzlement and larceny
with which it was grouped in the statute. See id. at 266-69 & n.28.
The Court nevertheless took pains to emphasize that criminal conversion under 641 was
distinct fromand broader thanits common-law antecedents and was included because the
authors of the statute wanted to reach all circumstances in which one may obtain wrongful
advantages from anothers property. Id. at 271.
Governments Memorandum Regarding Element of Intent to Permanently
Deprive Under 18 U.S.C. 641

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Probably every stealing is a conversion, but certainly not every knowing

conversion is a stealing. To steal means to take away from one in lawful
possession without right with the intention to keep wrongfully. (Italics added.)
Conversion, however, may be consummated without any intent to keep . . . .
Id. at 271-72 (internal citation omitted) (second emphasis added).

Criminal conversion, the

Court thus elaborated, may include not only the theft of property but its mere misuse or abuse.
Id. at 272.
Accordingly, the courts of appeals that have squarely addressed such defenses have
uniformly rejected claims that 641 excludes circumstances in which the defendant means
eventually to return the converted property.

The Eighth Circuits decision in United States v.

Rehak, 589 F.3d 965 (8th Cir. 2009), is illustrative.

That case involved an FBI anti-corruption

sting operation in which a cooperator told two officials with a sheriffs office in Minnesota that a
drug dealer had been arrested in Wisconsin and was trying to recover cash and drugs stashed in a
local hotel room. See id. at 968. The officials searched the hotel room and pocketed nearly
half the cash they found while a supervisor was distracted; they later purported to have just
discovered only the remaining half, which was seized. See id. at 969.

Over the ensuing eight

hours, the officials apparently surmised that the incident was a set-up and called the supervisor to
alert him that they had located the rest of the cash, which they then lodged in evidence. See id.
The officials were nevertheless charged with and convicted of stealing and converting the bait
money they briefly pocketed, in violation of 18 U.S.C. 641.
On appeal, they challenged the district courts instruction that convert means to
deliberately take or retain something with the intent to deprive the things owner of its use or
benefit either temporarily or permanently.

589 F.3d at 973. The defendants protested that,

Governments Memorandum Regarding Element of Intent to Permanently

Deprive Under 18 U.S.C. 641

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[i]f the conversion is limited in time, and lacks the partys intent to steal permanently, . . . it is
not a crime. Id. at 973. This, the court of appeals held, is not the law. Id. (citing
Morisette, 342 U.S. at 271-72).

Relying on decisions from the Fifth, Seventh, and Eleventh

Circuits, the court made clear that [s]ection 641 prohibits both permanent and temporary
takings. Id. (citing United States v. McRee, 7 F.3d 976, 980 (11th Cir. 1993) (en banc));
United States v. Howard, 30 F.3d 871, 875 (7th Cir. 1994); United States v. Sparkman, 112 F.
Appx 358, 360 (5th Cir. 2004) (emphasis added).
The Ninth Circuit has not squarely addressed this issue in the context of a conviction
under 641, but in enumerating the elements of that provision the court has conspicuously
omitted any requirement that a defendant intend to deprive the government of the benefit of its
property on a permanent basis:
To obtain a conviction under 641, the government must prove the following
four elements: (1) the defendant embezzled, stole, purloined, or knowingly
converted to his use or the use of another; (2) things of value; (3) the things of
value were federal money or property worth more than $100; and (4) the
defendant did such acts willfully and with the intent to appropriate the property to
a use inconsistent with the owners rights and benefits.
United States v. Seaman, 18 F.3d 649, 650 (9th Cir. 1994).

It might be argued that the term

knowingly converted itself comprises as an element the intent to permanently deprive the
owner of the benefit of his property, but the Ninth Circuit has rejected any such inference in
interpreting analogous criminal statutes. See, e.g., United States v. Thordarson, 646 F.2d 1323,
1335 & n.22 (9th Cir. 1981) (holding theft of union funds in violation of 29 U.S.C. 501(c)
comprises same two substantive elements as 641, fraudulent intent and conversion, which
may be accomplished without any intent to keep possession); United States v. Faulkner, 638
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Deprive Under 18 U.S.C. 641

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F.2d 129, 130 (9th Cir. 1981) (holding that intent to return the property does not exculpate the
defendant charged with taking goods in interstate shipments with intent to convert [them] to
his own use, in violation of 18 U.S.C. 659); see also United States v. Maloney, 607 F.2d 222,
229-30 (holding that intent to steal or purloin in federal larceny statute, 18 U.S.C. 661, does
not require intent to permanently deprive as was required by the common law definition of
larceny (emphasis added)).1
Because knowing conversion in violation of 641 includes not only outright theft but
misuse and abuse, there is no requirement that the defendant inten[d] to keep or deprive the
government of its property on a permanent basis. Morisette, 342 U.S. 272.

The government

accordingly urges the Court to instruct the jury in conformity with Ninth Circuit Model Jury
Instruction 8.39.
Dated this 9th day of September 2016.
Respectfully submitted,
BILLY J. WILLIAMS
United States Attorney

s/ Ethan D. Knight
ETHAN D. KNIGHT, OSB #992984
GEOFFREY A. BARROW
CRAIG J. GABRIEL, OSB #012571
Assistant United States Attorneys
1

The Ninth Circuits decision in Maloney is seemingly inconsistent with its earlier dictum in
United States v. Deggs, 632 F.2d 829, 831 (9th Cir. 1980), in which the court noted that 641
requires that a defendant steal or convert the property and thus demands proof of an intent to
permanently deprive the owner thereof. The issue in Deggs was not the sufficiency of evidence
or adequacy of instructions on appeal from a conviction under 641, however, but a (perverse)
claim that the defendant, having been joy riding in a postal vehicle, could only have been convicted
under that statute. The court unsurprisingly rejected that contention.
Governments Memorandum Regarding Element of Intent to Permanently
Deprive Under 18 U.S.C. 641

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