United States v. Darryl S. Granberry

Citations: 908 F.2d 278; 1990 WL 91377Docket: 89-3055EM

Court: Court of Appeals for the Eighth Circuit; December 11, 1990; Federal Appellate Court

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In the case United States v. Darryl S. Granberry, the Eighth Circuit Court is reviewing a dismissal of an indictment for mail fraud by a District Court, which found that the indictment did not allege an offense against the United States. The court based its decision on the interpretation of "money or property" in the context of 18 U.S.C. § 1341, referencing the Supreme Court's ruling in McNally v. United States. The government accuses Granberry of fraudulently obtaining a Missouri school-bus-operator permit by concealing a prior murder conviction, which, if disclosed, would have prevented both the permit issuance and his employment as a bus driver by the Normandy School District.

The indictment asserts that Granberry's fraudulent actions resulted in the acquisition of several types of money or property from both the Normandy School District and the State of Missouri, including wages, control over job distribution, hiring authority, and the processing costs associated with the fraudulent permit application. The court emphasizes that while the McNally decision limits the definition of property in mail fraud cases, it allows for the inclusion of intangible property provided it meets traditional property definitions. The court's task is to apply these legal standards to assess whether the indictment sufficiently alleges the deprivation of property as intended by the mail fraud statute.

Subdivision (B) of the indictment, which concerns money and property allegedly taken from the State of Missouri, does not qualify for protection under the McNally rule, as these alleged deprivations are deemed abstract. While a governmental permit may be considered property for the recipient, licensing authorities do not possess a property interest in these licenses or permits; therefore, allegations of fraudulent acquisition do not constitute an offense under Section 1341, referencing *United States v. Murphy*. In contrast, the alleged money deprivation from the Normandy School District in paragraph (A) does meet the statute's criteria. Specifically, wages paid by the School District are unequivocally categorized as money, which is explicitly mentioned in the statute. The defendant's argument that the School District would incur the same financial loss regardless of his truthfulness is rejected, as the School District sought a competent and honest bus driver and was deprived of funds due to fraud.

Item (A)(5), which relates to the School District’s desire to avoid tort liability, does not qualify as property under the McNally-Carpenter rule, while items (A)(2), (3), (4), and (6) do constitute property. An employment contract is recognized as property, providing rights to both employee and employer regarding wages and services. The right to control the spending of one’s funds is also considered intangible property under 18 U.S.C. Sec. 1341, as established in *United States v. Shyres*.

The judgment to dismiss the indictment for failure to state an offense is reversed, and the case is remanded for further proceedings, with allegations (A)(5) and (B) to be stricken from the indictment. The remaining allegations in paragraph (A) can be used for jury instructions. Notably, Congress amended the statute following the *McNally* decision, but this amendment is not retroactive and does not apply to the current indictment.