Elanith Valansi v. John Ashcroft, Attorney General of the United States
|Publisher||United States Court of Appeals for the Fourth Circuit|
|Publication Date||23 January 2002|
|Citation / Document Symbol||00-2293|
|Cite as||Elanith Valansi v. John Ashcroft, Attorney General of the United States , 00-2293, United States Court of Appeals for the Fourth Circuit, 23 January 2002, available at: http://www.refworld.org/docid/4152e0f312.html [accessed 30 September 2014]|
|Comments||On Petition For Review of an Order of the Board of Immigration Appeals United States Immigration and Naturalization Service|
|Disclaimer||This is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States.|
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
JOHN ASHCROFT,* Attorney General
of the United States,
On Petition For Review of an Order of the
Board of Immigration Appeals
United States Immigration and Naturalization Service
Argued: April 6, 2001
Before: SCIRICA, AMBRO, and GIBSON,**
(Opinion Filed January 23, 2002)
Thomas E. Moseley (Argued)
One Gateway Center
Newark, NJ 07102
Counsel for Appellant
* Substituted pursuant to Rule 43(c) of the F.R.A.P.
** The Honorable John R. Gibson, Circuit Judge, United States Court of
Appeals for the Eighth Circuit, sitting by designation.
Michael P. Lindemann
Alison M. Igoe (Argued)
Matthew R. Hall
United States Department of Justice
Office of Immigration Litigation
P.O. Box 878
Ben Franklin Station
Washington, DC 20044
Counsel for Appellee
OPINION OF THE COURT
AMBRO, Circuit Judge
Petitioner Elanith Valansi seeks judicial review of a final
order of removal entered by the Board of Immigration
Appeals (the "BIA" or "Board") for the United States
Immigration and Naturalization Service (the "INS" or
"Government"). The Board ruled that the petitioner's
conviction for embezzling, in violation of 18 U.S.C.S 656, in
excess of $400,000 in cash and checks from her employer
(the First Union National Bank) was an aggravated felony
as defined in section 101(a)(43)(M)(i) of the Immigration and
Nationality Act of 1952 (the "INA" or "Act") (codified as
amended at 8 U.S.C. S 1101(a)(43)(M)(i)). It therefore
ordered her removed to Israel pursuant to 8 U.S.C.
S 1227(a)(2)(A)(iii). Valansi's petition asks us to vacate the
Board's final order of removal because her conviction under
18 U.S.C. S 656 does not qualify as an aggravated felony
authorizing her removal from the United States. For the
reasons explained below, we grant the petition for review
and vacate the Board's order.
I. Background Facts and Procedural History
Valansi was born in Israel in 1974. She first came to the
United States with her parents and older sister only a
month and a half after her birth, and has been a lawful
permanent resident in this country since 1990. Valansi's
family settled in Monmouth County, New Jersey, where she
attended elementary and high school and received her high
school diploma. She later attended a local community
college. Her father, mother, and sister are all lawful
permanent residents. Her sister's son is a United States
citizen, and she has two siblings from her father's prior
marriage who are both United States citizens.
From 1992 to 1995, Valansi was employed as a bank
teller in Tinton Falls, New Jersey. From 1995 to 1997, she
was a bank teller with First Union National Bank ("First
Union") in Eatontown, New Jersey. Prior to 1997, she had
never been arrested and had no criminal record. However,
on six separate occasions spanning four months in 1997,
Valansi embezzled in the aggregate more than $400,000 in
cash and checks entrusted to First Union. A federal grand
jury returned an indictment charging that, "with intent to
injure and defraud the Bank, [Valansi] knowingly and
willfully embezzle[d] and purloine[d] . . . moneys, funds,
credits, and assets belonging to the Bank and intrusted
[sic] to her custody and care," in violation of 18 U.S.C.
On October 30, 1998, Valansi pled guilty to the six-count
indictment in exchange for the Government's agreement not
to prosecute her further for any charges that might arise
from her embezzlement, and in exchange for a stipulation
regarding the federal sentencing guidelines that would
apply to her case. During the plea colloquy during which
Valansi's plea was accepted by the Court, the Government
set forth the following essential elements of the crime to
which she agreed to plead guilty:
First, that at the time of the offense charged, Valansi
was an employee of First Union National Bank, which
is a national bank.
Second, that she wilfully embezzled money or credits of
First Union, or money, funds or assets entrusted to the
custody or care of First Union.
Third, that the value of those moneys or assets was in
excess of $1,000.
And, lastly, that Valansi acted with the intent to"injure
or defraud" the bank.
The Court asked Valansi a series of questions designed to
determine whether her criminal conduct conformed to the
elements of the offense. It confirmed that she was an
employee of First Union and that she "deliberately" removed
funds in the amounts charged within the indictment with
the intent to "deprive" the bank of those funds. The Court
concluded that her conduct violated the elements of the
offense under 18 U.S.C. S 656 and accepted Valansi's guilty
plea. On January 22, 1999, Valansi was sentenced under
United States Sentencing Guideline S 2B1.1, the Sentencing
Guideline for theft offenses, to six months imprisonment
followed by five years supervised release, the first six
months of which to be served at home under electronic
monitoring. She was ordered to pay restitution in the
amount of $32,260.22 for the cash amounts embezzled. 3
Valansi served her prison term. She sought employment
in the prison education department and was hired to teach
basic literacy and American Sign Language. In January
1999, Valansi became engaged to marry a United States
citizen, and the couple planned a May 1999 wedding. On
April 24, 1999, the INS served Valansi with a notice to
appear for a removal proceeding charging her with removal
for committing an aggravated felony as defined in 8 U.S.C.
S 1101(a)(43)(M)(i). Valansi was taken into INS custody
almost immediately after being released from prison. 4 She
was later released in May 2000 to complete the house
arrest portion of her sentence.
On December 7, 1999, an Immigration Judge held that
Valansi was removable under 8 U.S.C. S 1227(a)(2)(A)(iii) as
an alien who had been convicted of an aggravated felony.
On July 20, 2000, the BIA affirmed. In doing so it rejected
3. The restitution amount does not reflect the amounts embezzled
through checks because the checks could not be negotiated without
proper endorsements and were recovered when the thefts were
4. Valansi's brief describes inconsiderate treatment from INS agents
when attending her father's funeral while in their custody. Although we
believe that conduct was serious, and that it may have caused
unnecessary emotional distress to Valansi, we do not repeat it at length
here because it does not bear on our analysis of whether her conviction
qualifies as an aggravated felony.
Valansi's argument that her conviction under 18 U.S.C.
S 656 was not an aggravated felony because it was a theft
offense with a term of imprisonment of less than one year.
It concluded that Valansi's conviction under S 656 was
properly considered an aggravated felony because it was an
offense involving fraud or deceit (and not theft) that
resulted in loss to the victim greater than $10,000.
Valansi filed this petition for review on August 7, 2000.
The Government moved to dismiss her petition on
September 11, 2000, for lack of subject matter jurisdiction,
and Valansi filed an opposition to this motion on October 2,
2000. By order dated November 1, 2000, our Court referred
this motion to a merits panel.5 By letter dated October 20,
2000, Valansi's attorney notified this Court that she would
become eligible for removal on November 7, 2000, but that
he had not received notice from the INS expressing an
intent to execute the removal order at that time. To
preserve the status quo and allow us to make a decision on
this case, we granted Valansi's motion for stay of removal.
Valansi's petition for review is governed by 8 U.S.C.
S 1252(a)(2)(C), which provides that "no court shall have
jurisdiction to review any final order of removal against an
alien who is removable by reason of having committed a
criminal offense covered in section . . . 1227(a)(2)(A)(iii)." We
have recently explained that this jurisdiction-stripping
provision comes into play only when two facts exist:"(1) the
petitioner is an alien (2) who is deportable by reason of
having been convicted of one of the enumerated offenses."
Drakes v. Zimski, 240 F.3d 246, 247 (3d Cir. 2001). In
keeping with the views of several other circuit courts, we
held that we have jurisdiction "to determine whether these
jurisdictional facts are present." Id.; Tapia Garcia v. INS,
237 F.3d 1216, 1220-21 (10th Cir. 2001); Mahadeo v. Reno,
5. On October 12, 2000, Valansi moved for summary reversal of the
BIA's decision and for a stay of removal. The Government filed a
response on November 13, 2000, and Valansi submitted a reply on
November 29, 2000. This motion was also referred to the merits panel on
January 3, 2001.
226 F.3d 3, 9 (1st Cir. 2000), cert. denied, 121 S. Ct. 2590
(2001); Bell v. Reno, 218 F.3d 86, 89-90 (2d Cir. 2000), cert.
denied, 121 S. Ct. 784 (2001); Santos v. Reno, 228 F.3d
591, 597 n.11 (5th Cir. 2000); Flores-Miramontes v. INS,
212 F.3d 1133, 1135 (9th Cir. 2000); Lewis v. INS, 194
F.3d 539, 542 (4th Cir. 1999); Diakite v. INS , 179 F.3d 553,
554 (7th Cir. 1999) (per curiam).
In this case, Valansi does not dispute that she is an
alien. Instead she argues that her conviction for
embezzlement of bank funds under 18 U.S.C. S 656 does
not qualify as an aggravated felony as defined in 8 U.S.C.
S 1101(a)(43)(M)(i), and that she therefore cannot be
deported pursuant to 8 U.S.C. S 1227(a)(2)(A)(iii). If she is
right, judicial review is not precluded, and the removal
order will be vacated for failing to allege a removable
offense. If she is wrong, 8 U.S.C. S 1252(a)(2)(C) deprives us
of jurisdiction to inquire any further into the merits, and
the removal order will stand. Because we are determining a
purely legal question, and one that governs our own
jurisdiction, we review de novo whether the petitioner's
conviction qualifies as an aggravated felony. See, e.g.,
Lopez-Elias v. Reno, 209 F.3d 788, 791 (5th Cir. 2000), cert.
denied, 121 S. Ct. 757 (2001) ("Reviewing the matter de
novo, we nevertheless conclude that we have no jurisdiction
under IIRIRA [Illegal Immigration Reform and Immigrant
Responsibility Act of 1996], because Lopez-Elias was
convicted of a crime of violence . . . ."); Solorzano-Patlan v.
INS, 207 F.3d 869, 872 (7th Cir. 2000) ("[B]oth our
jurisdiction to hear this case and the merits of the appeal
turn on the question of whether Solorzano-Patlan is an
aggravated felon, a decision we review de novo."); Ye v. INS,
214 F.3d 1128, 1131 (9th Cir. 2000) ("This court reviews de
novo the question of whether a particular offense
constitutes an aggravated felony for which an alien is
subject to removal.").
Despite our exercise of de novo review, we will give
deference to the agency's interpretation of the aggravated
felony definition if Congress's intent is unclear."We do not
doubt that the principles of Chevron v. Natural Resources
Defense Council, 467 U.S. 837 (1984) . . . apply in general
to the statutory scheme set out in the INA." Drakes, 240
F.3d at 250 (citing INS v. Aguirre-Aguirre, 526 U.S. 415,
424-25 (1999)). The Aguirre-Aguirre Court explained that
"the BIA should be accorded Chevron deference as it gives
ambiguous statutory terms `concrete meaning through a
process of case-by-case adjudication.' " 526 U.S. at 425.
The courts of appeals have likewise employed Chevron
when interpreting immigration statutes that ultimately
determined their jurisdiction. See, e.g., Bell, 218 F.3d at 90
(analyzing under Chevron standard whether the
Immigration Act of 1990 superseded the Anti-Drug Abuse
Act of 1988 date restriction with regard to aggravated
felonies); Lettman v. Reno, 207 F.3d 1368, 1370 (11th Cir.
2000) (same); Lewis, 194 F.3d at 544 (same); Maghsoudi v.
INS, 181 F.3d 8, 14 (1st Cir. 1999) (according"due
deference" to the BIA's interpretation of whether a crime
involved "moral turpitude" within the meaning of 8 U.S.C.
S 1227(a)(2)(A)(i)); Coronado-Durazo v. INS, 123 F.3d 1322,
1323-24 (9th Cir. 1997) (applying Chevron when deciding
whether a conviction for solicitation under Ariz. Rev. Stat.
S 13-1002 is a deportable offense within the meaning of 8
U.S.C. S 1251(a)(2)). But see Lopez-Elias , 209 F.3d at 791
("Even assuming the ambiguity of the statutory terms of
IIRIRA, however, the fact that courts defer to the INS's
construction of its statutory powers of deportation does not
mean that similar deference is warranted with respect to
the enforcement of this court's jurisdictional limitations.").
Under Chevron, "[w]e only defer . . . to agency
interpretations of statutes that, applying the normal `tools
of statutory construction,' are ambiguous." INS v. St. Cyr,
121 S. Ct. 2271, 2290 n.45 (2001) (quoting INS v. Cardoza-
Fonseca, 480 U.S. 421, 447-48 (1987)). In St. Cyr, the
Supreme Court refused to defer to the BIA's interpretation
of whether certain provisions of IIRIRA should be applied
retroactively because "there is, for Chevron purposes, no
ambiguity in such a statute for an agency to resolve." Id.
Prior to St. Cyr, courts of appeals agreed that deference to
the BIA's interpretation of the Act is only appropriate when
Congress's intent is unclear. See, e.g., Sandoval v. Reno,
166 F.3d 225, 240 (3d Cir. 1999) ("Assuming arguendo that
Chevron does apply, it directs us to ascertain, by `employing
traditional tools of statutory construction,' whether
Congress has expressed `an intention on the precise
question at issue.' ") (quoting Chevron , 467 U.S. at 843 n.9);
Bell, 218 F.3d at 90 ("If, by employing traditional tools of
statutory construction, we determine that Congress's intent
is clear, that is the end of the matter. However, if the
statute is silent or ambiguous with respect to the specific
issue, we then ask whether the agency's answer is based on
a permissible construction of the statute.") (internal
citations and quotation marks omitted); Lewis , 194 F.3d at
544 ("If we conclude that Congress has not directly
addressed the question at issue in a statute or its intent is
ambiguous, we must defer to the Board's interpretation of
the statute provided it is not an unreasonable one.")
(internal citations and quotation marks omitted). Thus, our
task is to determine, using ordinary tools of statutory
construction, whether Congress intended the definition of
aggravated felony provided in 8 U.S.C. S 1101(a)(43)(M)(i) to
include embezzlement of bank funds under 18 U.S.C.
"The first step in interpreting a statute is to determine
`whether the language at issue has a plain and
unambiguous meaning with regard to the particular dispute
in the case.' " Marshak v. Treadwell, 240 F.3d 184, 192 (3d
Cir. 2001) (quoting Robinson v. Shell Oil Co. , 519 U.S. 337,
340 (1997)). When the statutory language has a clear
meaning, we need not look further. Id.; see also In re
Crammond, 23 I&N Dec. 9 (BIA 2001) (examining first the
"terms of the statute itself " before turning to "traditional
tools of statutory construction, such as the legislative
history" to determine Congressional intent).
"The plainness or ambiguity of statutory language is
determined by reference to the language itself, the specific
context in which that language is used, and the broader
context of the statute as a whole." Marshak , 240 F.3d at
192 (internal quotation marks omitted). In this case, the
specific provision providing a definition of aggravated
felony, 8 U.S.C. S 1101(a)(43)(M)(i), does not mention
embezzlement. It provides that an aggravated felony
includes "an offense that – involves fraud or deceit in
which the loss to the victim or victims exceeds $10,000." Id.
Valansi does not dispute that her conviction satisfies the
$10,000 monetary requirement. Instead, she argues that
her conviction for embezzlement is not an offense that
"involves fraud or deceit."
The BIA argues to the contrary. It has acknowledged that,
because the term "fraud" is not defined in the INA, "it
should be used in the commonly accepted legal sense, that
is, as consisting of false representations of a material fact
made with knowledge of [their] falsity and with intent to
deceive the other party. The representation must be
believed and acted upon by the party deceived to his
disadvantage." Matter of GG, 7 I&N Dec. 161, 164 (BIA
1956); see also Agathos v. Starlite Motel, 977 F.2d 1500,
1508 (3d Cir. 1992) ("Under general principles of tort law,
the elements of fraud are: (1) a material factual
misrepresentation; (2) made with knowledge or belief of its
falsity; (3) with the intention that the other party rely
thereon; (4) resulting in justifiable reliance to that party to
his detriment.") (citing Restatement (Second) of Torts
SS 525-526 (1977)); Black's Law Dictionary 670 (7th ed.
1999) (defining fraud as "a knowing misrepresentation of
the truth or concealment of a material fact to induce
another to act to his or her detriment" and explaining that
"[f]raud is usu. a tort, but in some cases (esp. when the
conduct is willful) it may be a crime.").
The term "deceit" also is not defined in the INA. However,
it is commonly perceived as "[t]he act of intentionally giving
a false impression," Black's Law Dictionary 413 (7th ed.
1999), or "the act or process of deceiving," which is in turn
defined as "to cause to believe the false." Webster's Third
New International Dictionary of the English Language
Unabridged 584 (3d ed. 1993).
Turning back to 8 U.S.C. S 1101(a)(43)(M)(i), we
determine whether the phrase "offense that – involves
fraud or deceit" has a plain meaning. The word"involves"
means "to have within or as part of itself " or "to require as
a necessary accompaniment." Webster's Third New
International Dictionary at 1191. Thus, an offense that
"involves fraud or deceit" is most naturally interpreted as
an offense that includes fraud or deceit as a necessary
component or element. It does not require, however, that
the elements of the offense be coextensive with the crime of
An examination of the surrounding sections providing
further examples of aggravated felonies supports this
reading of the phrase "involves fraud or deceit." In
S 1101(a)(43)(A) Congress defined the term aggravated
felony to mean "murder, rape, or sexual abuse of a minor."
In that case, it may have intended only those specific
crimes, and not other offenses "involving" those crimes, to
qualify as aggravated felonies. In S 1101(a)(43)(F) Congress
defined an aggravated felony to mean "a crime of violence
(as defined in section 16 of Title 18, but not including a
purely political offense) for which the term of imprisonment
[is] at least one year." It thus limited the scope of the
provision to apply only to crimes specified in a certain
section within the United States Code. By analogy, had
Congress intended S 1101(a)(43)(M)(i) to cover only
convictions for the crime of fraud, it could have stated that
an aggravated felony includes "the offense of fraud" or "the
offense of fraud as defined in [a specific provision for the
crime of fraud]." Thus, the use of the word"involves"
expands the scope of S 1101(a)(43)(M)(i) to include offenses
that have, at least as one element, fraud or deceit.
Using this framework, we examine whether a conviction
under 18 U.S.C. S 656 qualifies as a crime"involving fraud
or deceit." The statute provides that
[w]hoever, being an officer, director, agent or employee
of, or connected in any capacity with any . . . national
bank . . . embezzles, abstracts, purloins or willfully
misapplies any of the moneys, funds or credits of such
bank . . . shall be [subject to fines provided in the
statute . . .].
Id. The Government is required to establish five elements to
obtain a conviction under this provision: (1) the defendant
was an employee, (2) of a federally connected bank, (3) who
took cash or other assets, (4) in the custody or care of the
bank, (5) with the intent to injure or defraud the bank. See,
e.g., United States v. Schoenhut, 576 F.2d 1010, 1024 (3d
Cir. 1978) (citing United States v. Schmidt, 471 F.2d 385
(3d Cir. 1972)).
The predecessor of 18 U.S.C. S 656 explicitly enunciated
the last element, the intention to injure or defraud the
bank, but the 1948 revision omitted this language.
Nevertheless, Golden v. United States, 318 F.2d 357 (1st
Cir. 1963), and Seals v. United States, 221 F.2d 243 (8th
Cir. 1955), held that this revision did not change the
meaning or substance of the existing law. In Schmidt we
cited Golden and Seals for the proposition that an intent to
injure or defraud, "while no longer explicitly required by the
statute, is still considered an essential element of the
crime." 471 F.2d at 386. Because the element is stated in
the disjunctive, it may be shown either by intent to injure
or intent to defraud. As Judge Posner wrote in United
States v. Angelos, "Moreover, it is important to distinguish
between intent to injure and intent to defraud; either will
do, and they are not the same." 763 F.2d 859, 861 (7th Cir.
No doubt the crime of "embezzlement with intent to
defraud" would qualify as an offense "involving fraud or
deceit." The common meaning of the term "defraud" is "to
take or withhold from (one) some possession, right, or
interest by calculated misstatement or perversion of truth,
trickery, or other deception." Webster's Third New
International Dictionary at 593.
However, the mens rea element under S 656 may also be
established by proof of an "intent to injure." The plain
meaning of the term "injure" is "to do an injustice to," "to
harm, impair or tarnish the standing of," or"to inflict
material damage or loss on." Webster's Third New
International Dictionary at 1164. Acting with the intent to
injure does not require "false representations of a material
fact made with knowledge of [their] falsity and with intent
to deceive the other party," Matter of GG, 7 I&N Dec. at
164, or "a knowing misrepresentation of the truth or
concealment of a material fact to induce another to act to
his or her detriment." Black's Law Dictionary 670 (7th ed.
1999). Nor does it require deception, which is defined as
causing another to believe what is false. Thus, a conviction
under S 656 establishing only that the defendant acted with
an intent to injure his or her employer is not an offense
that "involves fraud or deceit" under 8 U.S.C.
The INS maintains that a conviction for embezzlement
under S 656 includes as a necessary element a finding that
Valansi had the specific intent to defraud or deceive her
employer. In its view, Valansi necessarily admitted that she
committed a crime with intent to defraud her employer
when she pled guilty.6
We disagree. The cases establish that a conviction may
be established under 18 U.S.C. S 656 by proving that the
defendant acted with either an intent to injure or an intent
to defraud. See United States v. Krepps, 605 F.2d 101, 104
(3d Cir. 1979); Schoenhut, 576 F.2d at 1024; Schmidt, 471
F.2d at 386; United States v. Moraites, 456 F.2d 435, 441
n.9 (3d Cir. 1972)). The Government's isolated citation to
United States v. Thomas, 610 F.2d 1166, 1174 (3d Cir.
1979), does not persuade us that a conviction under the
statute necessarily requires an intent to defraud. Although
Thomas listed as a basic element of the crime that "the
defendant must have acted with intent to defraud the
bank," it cited to Schoenhut, which, as noted above, held
that a conviction may be obtained by proving either an
intent to injure or an intent to defraud. We do not believe
that Thomas intended to change the landscape of the law.
Consequently, some but not all convictions under 18
U.S.C. S 656 qualify as aggravated felonies under 8 U.S.C.
S 1101(a)(43)(M)(i). A conviction establishing that the
defendant acted with the intent to defraud his or her
employer qualifies as an offense that involves fraud or
deceit, and therefore as an aggravated felony. A conviction
6. Our dissenting colleague agrees, citing Gov't of the V.I. v. Moolenaar,
133 F.3d 246, 250 (3d Cir. 1998), for the proposition that embezzlement
"necessarily" involves deception. In that case we held an information to
be sufficient even though it used the term "theft" rather than the
statutory term "larceny." The thrust of our analysis was that the word
"theft" may be taken to mean "breaking and entering," in contrast with
"[f]raud and embezzlement," which "necessarily involve securing
possession of another's property by deception." Id. This brief
characterization of the crimes of "fraud and embezzlement" does not
outweigh case law establishing that intent to injure alone may suffice for
guilt under 18 U.S.C. S 656, particularly when linking "embezzlement
and fraud" renders ambiguous whether "embezzlement" taken alone
necessarily involves deception.
establishing that the defendant acted only with an intent to
injure his or her employer does not.7
Taking a position directly opposite the Government's,
Valansi argues that Congress intended convictions under
18 U.S.C. S 656 to qualify as aggravated felonies only when
they meet the requirements of S 1101(a)(43)(G) rather than
S 1101(a)(43)(M)(i). Section 1101(a)(43)(G) defines an
aggravated felony as "a theft offense (including receipt of
stolen property) or burglary offense for which the term of
imprisonment [is] at least one year." Because Valansi's
conviction resulted in a term of imprisonment of less than
one year, she maintains that it should not be considered an
Valansi's argument relies upon background law with
which Congress may be presumed to be familiar. See
Cannon v. Univ. of Chicago, 441 U.S. 677, 699 (1979);
Matter of Gomez-Giraldo, 20 I&N Dec. 957, 964 n.3 (BIA
1995) (Congress is "presumed to be cognizant of existing
law pertinent to the legislation it enacts."). She directs our
attention principally to three sources of law to assist in
determining Congress's intent – the federal criminal
statutes, the Sentencing Guidelines, and the Model Penal
7. In this respect, our conclusion is different from that of the Eleventh
Circuit. In Moore v. Ashcroft, 251 F.3d 919 (11th Cir. 2001), that Court
acknowledged that "to establish the offense of misapplication of bank
funds under 18 U.S.C. S 656, the government must prove as an element
of the offense that the accused `acted with intent to injure or defraud the
bank.' " Id. at 923. It then observed that "the `intent to injure or defraud'
element of the offense is established by proof that the defendant
knowingly participated in a deceptive or fraudulent transaction." Id. It
therefore concluded that "the crime of misapplication of bank funds
under 18 U.S.C. S 656 necessarily involves fraud or deceit and is
appropriately considered an aggravated felony under INA
S 101(a)(43)(M)(i), 8 U.S.C. S 1101(a)(43)(M)(i)." Id. We agree that the
Government may establish that the accused acted with"intent to injure
or defraud" by offering proof that he or she"knowingly participated in a
deceptive or fraudulent transaction." However, we also believe that
element could be satisfied by proof that the defendant acted with merely
an intent to injure his or her employer. Under the latter circumstance,
a conviction under 18 U.S.C. S 656 does not, in our view, necessarily
involve fraud. That depends on how the conviction under S 656 unfolds.
Valansi points out that, under federal criminal statutes,
embezzlement of bank funds is an offense under 18 U.S.C.
S 656, whereas bank fraud is a separate offense under 18
U.S.C. S 1344. Moreover, embezzlement underS 656 is
grouped together with theft offenses in Chapter 31 of Title
18, whereas fraud offenses are grouped in Chapters 47 and
63 of that Title. She also directs our attention to precedent
stating that the term "theft" was intended to encompass all
forms of stealing, including embezzlement, under the
federal criminal statutes. See United States v. Turley, 352
U.S. 407, 412-13 & n.8, 415 n.14 (1957); United States v.
Schneider, 14 F.3d 876, 880-81 (3d Cir. 1994); United
States v. Maloney, 607 F.2d 222, 230-31 (9th Cir. 1979);
United States v. Henry, 447 F.2d 283, 285 (3d Cir. 1971).
She argues that we may presume that Congress was aware
of these classifications and likewise intended that
embezzlement be treated as a theft offense for purposes of
the aggravated felony definition rather than an offense
involving fraud or deceit.
Valansi also urges us to take notice of the distinction
between theft offenses and fraud offenses in the U.S.
Sentencing Guidelines Manual. U.S.S.G. S 2B1.1 creates a
distinct Guideline for theft offenses, including
embezzlement under 18 U.S.C. S 656, whereas U.S.S.G.
S 2F1.1 creates a separate Sentencing Guideline for fraud
and deceit offenses that does not include embezzlement
under S 656. She urges us to compare the commentary to
U.S.S.G. S 2B1.1, identifying that Guideline's applicability
to convictions under 18 U.S.C. S 656, with the commentary
to U.S.S.G. S 2F1.1, which does not list 18 U.S.C. S 656
among the convictions to which that Guideline applies.
Consistent with this distinction, Valansi was sentenced
under U.S.S.G. S 2B1.1, the Guideline for theft offenses, not
fraud offenses. She argues that because the definition of
aggravated felony under S 1101(a)(43) adopted the same
categories of offenses that are found in the Guidelines, a
conviction for embezzlement under 18 U.S.C. S 656 should
be treated as a theft offense under S 1101(a)(43)(G) rather
than an offense involving fraud and deceit under
Finally, Valansi argues that the treatment of
embezzlement as a theft rather than fraud offense in the
Model Penal Code constitutes background law that we can
presume Congress intended to parallel. She directs our
attention to the fact that the Model Penal Code consolidates
all stealing offenses, including embezzlement, under"theft,"
and places theft offenses in a section separate from fraud
offenses. Compare Model Penal Code S 223 with S 224.
We do not dispute that courts may look to these sources
when attempting to divine Congress's intent when passing
the INA. Indeed, the BIA appears to have done so on several
occasions when interpreting whether various criminal
convictions may be classified as aggravated felonies in
S 1101(a)(43). See, e.g., In re Espinoza, Int. Dec. 3402, 1999
WL 378088 (BIA 1999) (en banc) (examining classifications
under federal statutes and Sentencing Guidelines when
determining whether misprision of felony constitutes an
offense relating to the obstruction of justice under
S 1101(a)(43)(S)); In re Perez, Int. Dec. 3432, 2000 WL
726849 (BIA 2000) (en banc) (relying on Model Penal Code
definition of burglary when determining whether breaking
into a vehicle qualifies as an aggravated felony under the
INA); In re VZS, Int. Dec. 3434, 2000 WL 1058931 (BIA
2000) (holding that a conviction under Model Penal Code
S 223.2, which includes embezzlement, constitutes a theft
offense under S 1101(a)(43)(G));8 In re Bahta, Int. Dec. 3437,
2000 WL 1470462 (BIA 2000) (relying on Model Penal Code
definition of theft offense when determining whether
conviction for attempted possession of stolen property was
an attempted theft offense under S 1101(a)(43)(G)).
However, Valansi's argument suffers from a defect similar
to that of the INS: it classifies convictions under 18 U.S.C.
S 656 in an all-or-nothing manner. Valansi urges us to
conclude that every conviction under 18 U.S.C. S 656
8. Valansi maintains that In re VZS is binding precedent that required
the BIA to classify her conviction as a theft offense rather than an
offense involving fraud or deceit. We disagree. The fact that the BIA
classified embezzlement as defined in the Model Penal Code as a theft
offense under S 1101(a)(43)(G) does not mean that it could not also
classify it as an offense involving fraud or deceit under
S 1101(a)(43)(M)(i). Moreover, a conviction under 18 U.S.C. S 656 may be
different from embezzlement under the Model Penal Code if the former
includes an element of fraud or deceit that the latter does not.
should be treated as a theft offense for purposes of the
aggravated felony definition because in other areas of the
law Congress has chosen to align embezzlement offenses
more closely with the crime of theft than with the crime of
fraud. However, as we have explained above, the scope of
the aggravated felony definition in S 1101(a)(43)(M)(i) is not
coextensive with the crime of fraud. Congress's placement
of the crime of embezzlement in the same Title of the
United States Code as theft offenses, and treatment of
sentencing for embezzlement offenses like sentencing for
theft offenses, does not compel us to conclude that
Congress intended to exclude the possibility of fraud within
a conviction for embezzlement under 18 U.S.C. S 656. An
analysis of the plain meaning of the statute suggests that
embezzlement with intent to defraud would qualify as an
offense that "involves fraud or deceit." When the statutory
language has a clear meaning, we need not look further.
Marshak, 240 F.3d at 192.9
Having determined the plain meaning of 8 U.S.C.
S 1101(a)(43)(M)(i), we turn our attention to Valansi's
specific case. We have cautioned that where "a criminal
statute on its face fits the INA's deportability classification
. . .[,] [t]o go beyond the offense as charged and scrutinize
9. We pause to address Valansi's argument that the "longstanding
principle of construing any lingering ambiguities in deportation statutes
in favor of the alien," Cardoza-Fonseca, 480 U.S. at 449, requires that
her conviction under 18 U.S.C. S 656 be treated as a theft offense rather
than an offense involving fraud or deceit. This rule of construction
(which Valansi refers to as the "rule of lenity," a term traditionally
reserved for the criminal, not immigration, context) may be applied as a
canon of last resort to determine the intent of Congress on an
ambiguous issue. See id.; Marincas v. Lewis, 92 F.3d 195, 200 & n.6 (3d
Cir. 1996); In re Crammond, 23 I&N Dec. 9 (BIA 2001). However, it need
not be applied when the intent of Congress is already clear based on an
analysis of the plain meaning of the statute. See Cardoza-Fonseca, 480
U.S. at 449; Marincas, 92 F.3d at 200. After analyzing the text of
S 1101(a)(43)(M)(i), we believe there is no ambiguity to resolve because
the plain meaning of the section is evident: it includes offenses that have
fraud or deceit as an element. A conviction under 18 U.S.C. S 656
qualifies as an offense that has fraud or deceit as an element if there
was a finding that the embezzlement was committed with an intent to
the underlying facts would change our inquiry from a
jurisdictional one into a full consideration of the merits.
Such an approach would fly in the face of the jurisdiction
limiting language of IIRIRA." Drakes, 240 F.3d at 247-48.
However, in this case we have determined that the criminal
statute does not fit squarely within the INA's deportability
classification because some, but not all, of the convictions
under 18 U.S.C. S 656 qualify as offenses involving fraud or
deceit. Because we are unable to determine from the face of
the statute whether Valansi's conviction is among those
that qualify as an aggravated felony, we must take the
additional step of examining the underlying facts to
determine whether Valansi pled guilty to an offense
involving fraud or deceit.
A federal grand jury issued an indictment against Valansi
charging that, "with intent to injure and defraud the Bank,
[she] knowingly and willfully embezzle[d] and purloine[d]
. . . moneys, funds, credits, and assets belong to the Bank
and intrusted [sic] to her custody and care," in violation of
18 U.S.C. S 656. Although the Government urges us to
conclude based upon the indictment that Valansi pled
guilty to the intent to injure and defraud the bank, we
hesitate to do so. While Valansi pled guilty to the
indictment, her specific statements during the colloquy
clarified what that plea entailed. "To comport with the Fifth
Amendment, a defendant's plea of guilty must be voluntary
and intelligent." Parry v. Rosemeyer, 64 F.3d 110, 113 (3d
Cir. 1995); accord United States v. Salmon, 944 F.2d 1106,
1130 (3d Cir. 1991). The court is required to ensure that
the defendant understands the nature of the charge before
accepting his or her guilty plea as voluntary and intelligent.
See Fed. R. Crim. P. 11(c). We therefore decline to limit our
inquiry to the charge as stated in the indictment. We
instead examine the entire context of Valansi's conviction,
including not only the offense as charged in the indictment,
but also as explained to her and confirmed by the District
Court during the plea colloquy.
When the District Court asked the Government to read
the elements of Valansi's crime into the record during the
plea colloquy, the Government included as a necessary
element that Valansi "acted with the intent to injure or
defraud the bank." The District Court then asked a series
of questions with the goal of confirming that Valansi's
conduct conformed to the elements charged. Valansi's
responses demonstrate the intent to injure her employer by
depriving it of its property. But never do they demonstrate
clearly that Valansi's specific intent was to defraud the
The Court first established that Valansi was an employee
of First Union, and that she was "responsible, along with
others, for processing night deposit bags which had been
left by customers in the night deposit drop at the bank."
Valansi agreed that this was correct. The Court then asked
whether she "removed each of the [night deposit] bags from
the bank deliberately," and whether she took the"batch of
checks from the bank deliberately and knowing that it was
wrong to do so." It asked Valansi whether she"intend[ed] in
each case to deprive the bank of the cash and checks
contain[ed] in the bags," and whether she"intend[ed] to
deprive the bank of the checks contained in that batch
knowing that they had not yet been fully processed."
Valansi answered yes to each of these questions.
The Court then asked the following question: "Ms.
Valansi, you have admitted here today that you did not
intend to return those checks back from your apartment to
the bank, that you intended to deprive the bank of that
property, is that correct?" Valansi answered"No, it's not."
The following dialogue between her counsel (Mr. Pascarella),
the prosecutor (Mr. Weissman), the Court, and Valansi then
MR. PASCARELLA: There was discussion between
myself and Mr. Weissman with reference to the checks,
and the admission was that she in fact took the
checks, deprived the bank, sustaining a loss, they had
not been fully processed.
The question posed [is] whether or not she
deliberately took those checks in depriving the bank. I
don't know if Ms. Valansi is prepared to actually state
that up until the time she gave the statement to
Detective Cleary she did not intend to actually return
the checks, because, quite frankly, at the time of
sentence your Honor will hear certain remarks by
myself regarding the fact that the checks were
valueless to her. They only signified signatures on a
piece of paper and they were worth maybe the amount
of two cents per piece of paper.
THE COURT: Let's talk about what the plea today is
to and what the admission was, because Question 13
on Schedule A, and I will refer to it, it says "Did you
intend to deprive the bank of the checks contained in
that batch, knowing that they had not been fully
MR. PASCARELLA: What I think the answer to the
question is, at the time she actually took the checks
she committed a crime because she intended to deprive
the bank of those checks knowing that they had not
been fully processed.
There came a point in time when Ms. Valansi
recognized two things: One, they were useless to her,
and two, they knew they were gone and that she had
intended to return them.
The crime had been complete. We are not talking
about a crime that had not been completed at this
If the question were posed in that fashion to Miss
Valansi, she would acknowledge that number 13 is
Is that correct Ms. Valansi?
MS. VALANSI: Yes.
MR. WEISSMAN: I agree with that analysis.
THE COURT: What everybody is telling me is . . .[t]he
taking meant an intent to deprive.
MR. PASCARALLA: That's correct.
THE COURT: That's what Miss Valansi is admitting
MR. PASCARELLA: That's correct.
BY THE COURT:
Q Is that correct, Ms. Valansi?
Q You are saying it is, yes, I took it – I took them, I
intended to deprive the bank of them, but I'm not
going to say that I also never intended to return
them. Is that fair to say?
Q Is there anything else that you wish to add in terms
of my understanding of what you're admitting to on
the issue of checks?
A No, ma'am.
After confirming Valansi's intent to deprive the bank of
its property, the Court abruptly switched to the general
charges in the indictment which, as noted above, listed as
an element of her crime the intent to "injure and defraud."
Q In terms of all of the charges in the indictment, and
if you wish to review them one more time before
you answer, or if you can answer directly, how do
you plead to all the charges in the indictment,
guilty or not guilty?
THE COURT: I find that in this case that Ms. Valansi
is fully competent and capable of entering an informed
plea, that she's aware of the nature of the charges and
the consequences of the plea, and entering the plea of
guilty is knowingly and voluntarily done. I accept Ms.
Valansi's plea and she is now adjudged guilty of that
When reviewing this plea colloquy, we are faced with a
dilemma. On one hand, the plea colloquy viewed in a
general sense contains a plea of guilt to the charges of the
indictment, which contained the phrase "injure and
defraud." On the other hand, the District Court and the
Government failed to establish throughout the plea colloquy
whether Valansi was admitting that she had acted with the
intent to defraud her employer. The Court repeatedly asked
whether Valansi had the intent to "deprive" the bank of the
checks, to which she responded affirmatively. The meaning
of "deprive" is "to take something away from." Webster's
Third New International Dictionary at 606; accord Black's
Law Dictionary at 453 (defining deprivation as an"act of
taking away."). That word connotes an injury to the bank,
but nothing of an intent to defraud, which means"to cause
injury or loss to (a person) by deceit," Black's Law
Dictionary at 434, or "to take or withhold . . . by calculated
misstatement . . . or other deception." Webster's Third New
International Dictionary at 593. But the District Court and
the Government failed to establish that Valansi deceived
the bank (i.e., by causing it to believe what is false) or acted
fraudulently (i.e., by making a knowing misrepresentation
of the truth or concealment of a material fact to induce the
bank to act to its detriment).10
In this case, Valansi accepted guilt for theft and an intent
to injure, but did not clearly accept guilt as to any
fraudulent intent. Several times during the sentencing the
Judge referred to Valansi's act as a "theft." The Court also
stated that Valansi admitted to the specific acts that she
committed that made her criminally responsible. In
imposing sentence the Court referred to the money Valansi
had taken, rather than a fraud the Government now alleges
she had committed.
In this context, we cannot conclude, after scrutinizing the
10. We recognize that it is common practice for United States Attorneys'
Offices to pursue a strategy of "plead in the conjunctive, but instruct in
the disjunctive" in order to "avoid uncertainty." Dep't of Justice Criminal
Resource Manual S 227. This tactic relies on the fact that
[w]hen a statute specifies several alternative ways in which an
offense may be committed, the indictment may allege the several
ways in the conjunctive, and this fact neither renders the indictment
bad for duplicity nor precludes a conviction if only one of the several
allegations linked in the conjunctive in the indictment is proven.
Id., citing United States v. McCann, 465 F.2d 147, 162 (5th Cir. 1972).
The use of the conjunctive in the indictment is"to avoid uncertainty"
only; just as the Government may obtain a conviction if "only one of the
several allegations linked in the conjunctive in the indictment is proven,"
so may a defendant plead guilty to only one of the allegations required
to prove an element of her crime.
entire plea colloquy and record, that Valansi knowingly pled
guilty to embezzlement with the specific intent to defraud.
We simply do not know and may not speculate (though
indeed we are skeptical about) whether Valansi would have
accepted that her conduct amounted to an intent to
defraud rather than to injure her employer. This skepticism
is fed by what we do know: Valansi, advised by experienced
immigration counsel, wanted strongly to avoid subjecting
herself to deportation as a result of her plea. Not conceding
this alternative element of embezzlement allowed her both
a way to plead affirmatively to the crime and to offer an
argument to elude deportation.
The Supreme Court has recently explained that "[p]lea
agreements involve a quid pro quo between a criminal
defendant and the government, . . . There is little doubt
that . . . alien defendants considering whether to enter into
a plea agreement are acutely aware of the immigration
consequences of their convictions." St. Cyr , 121 S. Ct. at
2291. The plea colloquy in this case states explicitly that
"to the extent that there [was] any immigration or
deportation issue, [Valansi was] apprised of the
consequences of the plea as they may affect her status." In
fact she retained separate counsel to advise her on the
immigration consequences of the guilty plea. We believe
that Valansi would have avoided pleading guilty to
embezzlement with the specific intent to defraud and
therefore cannot conclude that she pled guilty to"an
offense that [ ] involves fraud or deceit." 8 U.S.C.
The plain meaning of S 1101(a)(43)(M)(i) defines an
aggravated felony as an offense that has fraud or deceit as
at least one required element. Some but not all convictions
under 18 U.S.C. S 656 qualify as an aggravated felony
under that definition: a conviction for embezzlement with
specific intent to defraud qualifies as an offense involving
fraud or deceit, and thus an aggravated felony; a conviction
with only the specific intent to injure does not.
In Valansi's case, the specific intent to defraud was not
established. It appears that Valansi was counseled to avoid
admitting to that intent, and the plea colloquy fails to pin
down the mens rea element sufficiently for us to conclude
that Valansi acted with the intent to defraud rather than to
injure her employer. The Government had ample
opportunity during the plea colloquy to explore the fraud or
deceit element, but made no effort to do so. In light of this
failure to make its case, particularly in a situation where it
must have realized that little things mean a lot, we will
grant Valansi's petition for review and vacate the final order
of removal for failure to establish that she was convicted of
an aggravated felony.
SCIRICA, Circuit Judge, dissenting.
At her guilty plea to embezzlement (18 U.S.C S 656),
Valansi's counsel engaged in a clever bit of lawyering that
was not picked up on by the government or the District
Judge. As a consequence, the majority holds that although
pleading guilty to embezzlement, Valansi never pled guilty
to a crime involving fraud or deceit. Because I believe the
majority mistakenly defines the crime of embezzlement
under 18 U.S.C. S 656, I respectfully dissent.
Valansi embezzled in the aggregate more than $400,000
in cash and checks entrusted to First Union National Bank
on six separate occasions spanning four months in 1997.1
She pled guilty to six counts of embezzlement under 18
U.S.C. S 656.2 As a lawful permanent resident, Valansi is
removable if her conviction qualifies as an aggravated
felony under 8 U.S.C. S 1101(a)(43)(M)(i). See 8 U.S.C.
The critical issue on appeal is whether a conviction for
embezzlement under 18 U.S.C. S 656 constitutes an
aggravated felony, defined in 8 U.S.C. S 1101(a)(43)(M)(i) as
"an offense that – involves fraud or deceit in which the loss
to the victim or victims exceeds $10,000." Because Valansi
pled guilty to embezzling more than $10,000, the sole
1. Valansi's indictment was based on the following criminal conduct: On
April 30, 1997, Valansi embezzled $5,084.99 in cash and checks; on
May 27, 1997, Valansi embezzled $11,287.86 in cash and checks; on
June 7, 1997, Valansi embezzled $3,904.22 in cash and checks; on June
16, 1997, Valansi embezzled $8,239.05 in cash and checks; on August
4, 1997, Valansi embezzled $14,003.34 in cash and checks; on August
12, 1997, Valansi embezzled $370,674.69 in cash and checks entrusted
to the care of First Union National Bank.
2. Valansi was charged with six counts of embezzlement in the
indictment. Each count charged her with "knowingly and wilfully"
embezzling deposits "intrusted to her custody and care." Valansi pled
guilty to each count.
question is whether embezzlement is an offense that
"involves fraud or deceit."3
18 U.S.C. S 656 provides, in part:
Whoever, being an officer, director, agent or employee
of, or connected in any capacity with any . . . national
bank . . . embezzles, abstracts, purloins or willfully
misapplies any of the moneys, funds or credits of such
bank . . . shall be fined not more than $1,000,000 or
imprisoned not more than 30 years, or both; but if the
amount embezzled, abstracted, purloined or misapplied
does not exceed $1,000, he shall be fined under this
title or imprisoned not more than one year, or both.
The statute does not define "embezzle." Therefore, we
must resort to its settled meaning. In Morissette v. United
States, 342 U.S. 246 (1952), the Supreme Court held:
[W]here Congress borrows terms of art in which are
accumulated the legal tradition and meaning of
centuries of practice, it presumably knows and adopts
the cluster of ideas that were attached to each
borrowed word in the body of learning from which it
was taken and the meaning its use will convey to the
judicial mind unless otherwise instructed. In such
case, absence of contrary direction may be taken as
satisfaction with widely accepted definitions, not as a
departure from them.
Id. at 263; see also Standard Oil Co. of N.J. v. United
States, 221 U.S. 1, 59 (1911) ("[W]here words are employed
in a statute which had at the time a well-known meaning
at common law or in the law of this country, they are
presumed to have been used in that sense unless the
context compels to the contrary.").4
3. I agree with the majority that "the use of the word `involves' expands
the scope of S 1101(a)(43)(M)(i) to include offenses that have, at least as
one element, fraud or deceit" and that the provision does not require
"that the elements of the offense involving `fraud or deceit' be coextensive
with the crime of fraud." Supra at 9.
4. Similarly, "where Congress uses a common law term in a federal
criminal statute, absent a new instruction defining it, Congress is
presumed to adopt the term's widely accepted common law meaning."
United States v. Cicco, 10 F.3d 980, 984 (3d Cir. 1993) (citing Morissette,
342 U.S. at 263); United States v. Nedley, 255 F.2d 350, 357 (3d Cir.
The term "embezzlement" has been defined consistently
by the Supreme Court for more than 100 years. In 1887,
the Supreme Court said embezzlement had a "settled
technical meaning."5 United States v. Northway, 120 U.S.
327, 334 (1887). In 1895, the Supreme Court held
"[e]mbezzlement is the fraudulent appropriation of property
by a person to whom such property has been intrusted, or
into whose hands it has lawfully come." Moore v. United
States, 160 U.S. 268, 269 (1895); see also United States v.
Petti, 459 F.2d 294, 295 (3d Cir. 1972).6 In 1902, the
Supreme Court declared "the word `embezzled' itself implies
fraudulent conduct on the part of the person receiving the
money. . . . Indeed, it is impossible for a person to embezzle
the money of another without committing a fraud upon
him." Grin v. Shine, 187 U.S. 181, 189 (1902).
Later cases have articulated that the act of embezzlement
violates a relationship of trust and confidence."In
embezzlement, breach of fiduciary duty is an inherent
element of the crime." United States v. Maurello, 76 F.3d
1304, 1310 (3d Cir. 1996); see also United States v.
Sayklay, 542 F.2d 942, 944 (5th Cir. 1976) ("The essence
of embezzlement lies in breach of a fiduciary relationship
deriving from the entrustment of money."). In order to be
convicted of embezzlement, the accused must be entrusted
with another's money or property or have lawful possession
by virtue of some office, employment, or position of trust
5. "By the late 18th century, courts were less willing to expand common-
law definitions. Thus, when a bank clerk retained money given to him by
a customer rather than depositing it in the bank, he was not guilty of
larceny, for the bank had not been in possession of the money. Stautory
crimes such as embezzlement and obtaining property by false pretenses
. . . were created to fill this gap." Bell v. United States, 462 U.S. 356, 359
(1983) (citations omitted). See 2 W. LaFave & A. Scott, Substantive
Criminal Law S 8.6 at 369 (1986) ("[E]mbezzlement . . . [was a] crime
created by the legislature for the specific purpose of plugging loopholes
left by the narrowness of the crime of larceny.").
6. See Black's Law Dictionary 522 (6th ed. 1990) (Embezzlement is
defined as "the fraudulent appropriation of property by one lawfully
entrusted with its possession."); 2 W. LaFave & A. Scott, Substantive
Criminal Law S 8.6 at 368 (1986) (Embezzlement is defined as: "(1) the
fraudulent (2) conversion of (3) the property (4) of another (5) by one who
is already in lawful possession of it.").
before converting it.7 The Court of Appeals for the First
The notion of "fraudulent conversion," at the heart of
embezzlement, may sound obscure, but, in fact, it is
not. It essentially refers to, say, a bank teller, trustee,
or guardian using money entrusted to him by another
person for his own purposes or benefit and in a way
that he knows the "entruster" did not intend or
United States v. Young, 955 F.2d 99, 102 (1st Cir. 1992).
Valansi pled guilty to "knowingly and willfully"
embezzling bank deposits. Despite the settled definition of
"embezzlement," the majority declines to apply that
definition to Valansi's conduct and guilty plea. Nor does it
address her position of trust as an employee,8 or the breach
of her fiduciary duties to the bank. As a result, I believe the
majority misinterprets the elements of embezzlement under
18 U.S.C. S 656.
As a bank teller for First Union National Bank, Valansi
was in a fiduciary relationship.
7. "The crime of embezzlement builds on the concept of conversion, but
adds two further elements. First the embezzled property must have been
in the lawful possession of the defendant at the time of its appropriation.
Second, embezzlement requires knowledge that the appropriation is
contrary to the wishes of the owner of the property." United States v.
Stockton, 788 F.2d 210, 216-17 (4th Cir. 1986) (citations omitted).
8. "Fraud inherently involves some exploitation of trust." United States v.
Iannone, 184 F.3d 214, 231 (3d. Cir. 1999) (Becker, C.J., concurring)
(citing United States v. Koehn, 74 F.3d 199, 201 (10th Cir. 1996) ("In
every successful fraud the defendant will have created confidence and
trust in the victim . . . ."); United States v. Mullens, 65 F.3d 1560, 1567
(11th Cir. 1995) ("[T]here is a component of misplaced trust inherent in
the concept of fraud . . . ."); United States v. Hathcoat, 30 F.3d 913, 915
(7th Cir. 1994) ("By its definition, embezzlement requires a finding of a
breach of trust.")).
The essence of a fiduciary relationship is that the
fiduciary agrees to act as his principal's alter ego. . . .
Hence the principal is not armed with the usual
wariness that one has in dealing with strangers; he
trusts the fiduciary to deal with him as frankly as he
would deal with himself--he has bought candor.
United States v. Dial, 757 F.2d 163, 168 (7th Cir. 1985).
On six separate occasions spanning four months, Valansi
appropriated checks and cash entrusted to her for deposit.
Under any definition, this breach of her fiduciary duties
involved fraud and deceit.9 By pleading guilty to
"knowingly" embezzling the deposits "intrusted to her care,"
Valansi demonstrated the requisite intent for "fraudulent
conversion."10 These actions were paradigmatic examples of
embezzlement. As the Court of Appeals for the First Circuit
An embezzler, like a thief or a swindler, may commit
the crime in any of a myriad of different ways. But, in
each instance, the embezzler will have acted for his
own purposes and contrary to authorization. He will
have "fraudulently converted" property entrusted to
him by another. (citations omitted).
Young, 955 F.2d at 103.
A crime involving fraud or deceit qualifies as an
9. "Fraud in the common law sense of deceit is committed by deliberately
misleading another by words, by acts, or, in some instances – notably
where there is a fiduciary relationship, which creates a duty to disclose
all material facts – by silence." Dial, 757 F.2d 163.
10. One basic source says "the mental state required for embezzlement
generally appears in the statutes in the form of the adverb `fraudulently'
modifying the verb `converts.' (If the statute should instead punish one
who `embezzles,' it would not signify anything different, for `embezzles'
means `fraudulently converts.')" 2 W. LaFave & A. Scott, Substantive
Criminal Law S 8.6 at 379 (1986). Another source defines "fraudulent
conversion" as "[r]eceiving into possession money or property of another
and fraudulently withholding, converting, or applying the same to or for
one's own use and benefit, or to [the] use and benefit of any person other
than the one to whom the money or property belongs." Black's Law
Dictionary 662 (6th ed. 1990).
aggravated felony.11 Independent of the fraud analysis,
Valansi's conduct also constituted a crime involving deceit.12
We have stated that "[f]raud and embezzlement necessarily
involve securing possession of another's property by
deception . . . ." Gov't of the V.I. v. Moolenaar, 133 F.3d
246, 250 (3d Cir. 1998).
As a result, a conviction for embezzlement under 18
U.S.C. S 656 constitutes an offense involving fraud and
deceit and qualifies as an aggravated felony under 8 U.S.C.
S 1101(a)(43)(M)(i). See Moore v. Ashcroft , 251 F.3d 919, 923
(11th Cir. 2001) (holding "[t]he `intent to injure or defraud'
element of the offense is established by proof that the
defendant knowingly participated in a deceptive or
fraudulent transaction") (citations omitted).
The "dilemma" the majority wrestles with, whether
Valansi embezzled more than $400,000 with the "intent to
defraud" or the "intent to injure," is unnecessary to the
resolution of this appeal. Knowledge satisfies the required
mental state under S 656.13 Valansi pled guilty to
11. Valansi's counsel ignores the fact that offenses that "involve deceit"
qualify as aggravated felonies.
12. "Deceit" is defined as the "act or process of deceiving (as by
falsification, concealment, or cheating)," which is in turn defined as "to
be false, to betray . . . to deprive especially by fraud or stealth."
Webster's Third New International Dictionary of the English Language
Unabridged 584 (3d ed. 1993).
13. The Third Circuit cases the majority cites (all of which involve the
"willful misapplication of funds" under S 656 rather than embezzlement)
favor the government's position. "It is well settled that `intent to injure or
defraud a bank exists if a person acts knowingly and if the natural result
of his conduct would be to injure or defraud the bank even though this
may not have been his motive.' " United States v. Krepps, 605 F.2d 101,
104 (3d Cir. 1979) (quoting United States v. Schmidt, 471 F.2d 385, 386
(3d Cir. 1972)); see also United States v. Schoenhut, 576 F.2d 1010,
1024 (3d Cir. 1978) ("Intent to injure or defraud a bank exists whenever
the defendant acts knowingly and the result of his conduct would be to
injure or defraud the bank, regardless of his motive."). Furthermore,
"reckless disregard of the interests of the bank is equivalent to intent to
"knowingly and willfully" embezzling deposits"intrusted to
her custody and care." (A-90, 104-110). Because
"embezzlement" means to convert by fraud and deception,
it makes no difference whether Valansi pled guilty to
embezzlement with the "intent to injure" or the "intent to
defraud."14 Embezzlement with the "intent to injure" still
injure or defraud." Krepps, 605 F.2d at 104; Schoenhut, 576 F.2d at
1024. By pleading guilty to "knowingly and wilfully" embezzling the
money, which showed a reckless disregard of the interests of the bank
and had the natural result of injuring and defrauding the bank (to
defraud "means `to cause injury or loss to (a person) by deceit' or `to take
or withhold . . . . by calculated misstatement . . . or other deception.' "
Supra at 21), Valansi was guilty of embezzling $400,000.00 with the
intent to injure and defraud the bank.
In discussing the mens rea requirement under S 656, we stated in
Section 656 penalizes willful misapplication, but that term must
be placed in context with the other acts prohibited by the section.
It proscribes actions of one who "embezzles, abstracts," and
"purloins." When this is read together with willful misapplication, it
is evident that the mens rea for the crime is not fulfilled by mere
indiscretion or even foolhardiness on the part of the bank officer.
His conduct must amount to reckless disregard of the bank's
interest or outright abstraction of funds.
576 F.2d at 1024.
14. The majority's citation to United States v. Angelos, 763 F.2d 859 (7th
Cir. 1985) is inapposite. That case involved the willful misapplication of
funds rather than embezzlement. In Angelos, a bank president arranged
a loan, without the approval of the bank's board of directors, to a
business in which he owned 80 percent of stock. Convicted under 18
U.S.C. S 656 for willful misapplication of funds, Angelos argued on
appeal that because he intended to repay the loan his conduct did not
violate S 656.
The court held Angelos' argument was irrelevant not only because one
can injure a bank "by taking its money even if you intend to return it,"
but because Angelos breached his fiduciary duty to the bank and as a
result intended to defraud it. Id. at 861.
By lending the bank's money in effect to himself in violation of
accepted banking procedures, Angelos breached his fiduciary
obligation to the bank, and it is irrelevant whether he thought, and
constitutes an offense that involves fraud and deceit. Based
on her guilty plea, Valansi fraudulently converted $400,000
with the intent to injure the bank and committed an
Valansi pled guilty to "knowingly and willingly"
embezzling more than $400,000 "intrusted to her care." As
a result, she committed a crime involving fraud and deceit;
a crime which constitutes an aggravated felony under 8
U.S.C. S 1101(a)(43)(M)(i). For the foregoing reasons, I would
affirm the judgment of the BIA.
Therefore, I respectfully dissent.
A True Copy:
Clerk of the United States Court of Appeals
for the Third Circuit
thought correctly, that the bank would not be hurt. Intent to
defraud – which means, to take financial advantage of a
confidential relationship . . . is all that is required to make out a
violation of section 656; intent to injure the bank need not be
Id. at 861-862 (citations omitted).
Even under the Angelos analysis, Valansi intended to defraud First
Union as she breached her fiduciary obligation to the bank and took
financial advantage of her position of trust and confidence. The majority
does not discuss Valansi's breach of her fiduciary duties nor does it
define "embezzlement" or apply it to these circumstances.
Because "embezzlement," unlike "willful misapplication of funds," has
a precise definition ("the fraudulent appropriation of property. . . .") it is
irrelevant whether Valansi fraudulently appropriated the deposits with
the intent to injure or the intent to defraud the bank. Either way, she
committed an offense involving "fraud."