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803. Actions Proscribed

The term "embezzlement" means the unlawful taking or conversion by a person to his/her own use of the monies, funds or credits which came into that person's custody or possession lawfully by virtue of his/her office or employment. See United States v. Northway, 120 U.S. 327 (1887); FIF Manual at 142. If embezzlement is charged, the conversion alleged may not be to some third party other than the embezzler himself/herself. See United States v. Williams, 478 F.2d 369 (4th Cir. 1973). Rather, abstraction or misapplication should be charged when there is a third-party beneficiary. It is a jury question whether or not the defendant had sole access to the funds so as to support a charge of embezzlement. See United States v. Walker, 677 F.2d 1014, 1016 (4th Cir. 1982).

Abstraction is the act of wrongfully taking or withdrawing monies, funds or credits with the intent to injure or defraud the bank or some other person, and without the bank's knowledge or consent, or that of its board of directors, and converting them to the use of oneself or some other person or entity other than the bank. The word "abstract" has long been a term of certain, simple and unambiguous meaning. See United States v. Archambault, 441 F.2d 281 (10th Cir. 1971), cert. denied, 404 U.S. 843 (1971); Norway, 120 U.S. at 335.

There has apparently been only one case which discussed "purloining" in the context of 18 U.S.C. § 656, and the court therein accepted the definition that has applied to other criminal statutes, Archambault, 441 F.2d at 282. "Purloining is a species of larceny that fills the gap between the sometimes doubtful common law definition of larceny and the modern criminal code definition of larceny.þ See Id. at 283, citing, United States v. Handler, 142 F.2d 351 (2d Cir. 1944); Crabb v. Zerbst, 99 F.2d 562 (5th Cir. 1938).

Although "misapplication" has no precise meaning, it has been defined as a willful and unlawful misuse of monies, funds or credit of the bank made with intent to injure or defraud the bank. See Hernandez v. United States, 608 F.2d 1361 (10th Cir. 1979); United States v. Garrett, 396 F.2d 489, 491 (5th Cir), cert. denied, 393 U.S. 952 (1968). See also United States v. Moraites, 456 F.2d 435, 441 (3d Cir. 1972), cert. denied, 409 U.S. 891 (1972).

"The misapplication of funds proscribed by 18 U.S.C. § 656 occurs when funds are distributed under a record which misrepresents the true state of the record with the intent that bank officials, bank examiners or the Federal Deposit Insurance Corporation will be deceived." United States v. Twiford, 600 F.2d 1339 (10th Cir. 1979) quoting, United States v. Kennedy, 564 F.2d 1329, 1339 (9th Cir. 1977), cert. denied, 435 U.S. 944 (1978).

A majority of the United States Supreme Court held that the Federal Bank Robbery Act, which proscribes the "taking and carrying away" of bank property with an intent to steal, 18 U.S.C. § 2113(b), is not limited in its application to common-law larcenies and that the statute can also be applied to some instances of obtaining money under false pretenses. See Bell v. United States, 462 U.S. 356 (1983). The majority carefully point out, however, that the statute would not apply to a false pretenses case when there is no taking and carrying away.

[cited in USAM 9-40.000]

Updated December 18, 2015