CAAF decided the Army case of United States v. Williams, 75 M.J. 129, No. 15-0140/AR (CAAFlog case page) (link to slip op.), on Tuesday, February 23, 2016. Explaining that larceny in violation of Article 121 requires the theft of something from on with a greater possessory interest, and that larceny involving a debit or credit card is typically a larceny from the financial institution even though the true cardholder may suffer a consequence, the court reverses the decision of the Army CCA and the appellant’s convictions of larceny from two soldiers by unauthorized use of their debit cards.

Judge Ryan writes for a unanimous court. Notably, CAAF did not hear oral argument in this case.

CAAF granted review to determine:

Whether Appellant committed larcenies of the property of two soldiers by using their debit card information without authority. See United States v. Lubasky, 68 M.J. 260 (C.A.A.F. 2010).

The appellant used the debit cards of two fellow soldiers to make various purchases, and he was charged with two specifications of larceny. Each specification alleged that he “did . . . steal money, of a value of more than $500.00, the property of [another soldier]).” Slip op. at 3-4. At trial the appellant moved for a finding of not guilty under R.C.M. 917, asserting that the soldiers were not the victims of the larcenies. The military judge denied the motion.

The Army CCA affirmed the convictions reasoning that the other soldiers were the:

actual victims in this case. Appellant caused the movement of [PFC Irvine’s and SPC Aldrich’s] money from their control, intending to permanently deprive them and actually depriving them of its use and benefit.” 2014 CCA LEXIS 665, at *13, 2014 WL 7228945, at *5 (citing United States v. Cimball Sharpton, 73 M.J. 299 (C.A.A.F. 2014)).

Slip op. at 4-5. Readers may recall a similar analysis by the Army CCA in United States v. Endsley, 73 M.J. 909 (A. Ct. Crim. App. Oct. 17, 2014), which I analyzed here and concluded was erroneous. CAAF summarily reversed the CCA’s decision in Endsley soon after (discussed here). 74 M.J. 216.

Now, reversing the Army CCA and the convictions, Judge Ryan explains:

While it is true that the credit or debit cardholder may also suffer a consequence — such as a bank fee or loss of access to funds in an account — the defendant nonetheless did not obtain money or goods from the cardholder.

Further:

The instant case is not an unusual case — there were no agency relationships, no joint accounts, and no contracts. Our unfortunate choice of language in Cimball Sharpton does not change the law, and we urge the Government to cleave to the rule set forth in the MCM in the “usual case.” See MCM pt. IV, para. 46.c.(1)(h)(vi). This is such a case: Appellant’s actions constituted a garden-variety larceny by unauthorized use of debit card information, and the usual rule — that the person who was stolen from, or, in the case of computergeeks.com, from whom larceny was attempted, was the merchant from whom the goods were obtained or the bank from whom money was obtained — applies. The account holders here did not own either the goods or the bank funds available to satisfy the debit card purchases.

While it is both intuitively and objectively true that PFC Irvine and SPC Aldrich were “victims” and “suffered the financial loss[es],” see Cimball Sharpton, 73 M.J. at 299, 301–02, because of Appellant, he neither took nor obtained nor withheld anything from them. Though he was the but-for cause of their financial problems, that does not constitute larceny from them. If a defendant did not steal from the person the government names in the larceny specification, the conviction is legally insufficient. See Lubasky, 68 M.J. at 263, 265.

Slip op. at 10-11.

7 Responses to “Opinion Analysis: CAAF explains that unauthorized use of a debit card is a larceny from the financial institution, in United States v. Williams, No. 15-0140/AR”

  1. Christian Deichert says:

    File under “why we need larceny updated.”  The proposed UCMJ update will take care of issues like this.

  2. Tami a/k/a Princess Leia says:

    I interpret this opinion as:  “Sorry for the confusion our previous decisions caused.  But now we’re clarifying, the accused stole from the bank or merchant.  The individual is a victim, but charge it as a larceny from the bank or merchant.”

  3. Shawn says:

    I am a layman, not an attorney, and a vet, not active duty.  I think this opinion misses the crucial distinction between debit cards and credit cards, a distinction that many are unaware of, including presumably these very judges.  If it had been a credit card, where the owner is protected from fraud by statute and the card issuer assumes most if not all responsibility for misuse, then I would wholly concur.  A debit card has no such protection.  The card holder might be indemnified, or more likely not, and certainly cannot count on that happening.  It’s why debit cards are such a hoax.  They are your cash put right out there and ripe for the taking.  Those cardholders might not have incurred any tangible loss, ultimately, but surely they were exposed to the very real probability of loss.  At the very least, they lost use of actual funds for a period of time.  Now, there is no question that a crime was committed.  The question is, who is the victim?  If it had been a credit card, the issuer would be the victim.  When it is your debit card, you are the victim.

  4. Zachary D Spilman says:

    Shawn:

    I addressed the issue of indemnification in the comments to my analysis of Endsleythis comment in particular. The issue depends somewhat (or maybe not, as I noted in that other comment) on whether the debit card was used as a credit card or with a PIN. 

    Further, as discussed in that other comment, a debit card is a credential. 

  5. stewie says:

    I’m just a caveman.  Your cars frighten me.  Are they demons about to eat me? I just don’t know. But what I do know is that this entire area of the law is just overly formulaic legalese that could stand to be simplified so that it can be charged with the cardholder as the victim in appropriate cases.

  6. John says:

    It’s actually not that formulaic. It’s quite simple, really. Account-holders do not own the funds in the bank. The bank does. This is a “basic principle of hornbook law.”  (See U.S. v. Duncan, cited in the Drafter’s Analysis). Thus, at common law, one cannot steal from the possession of the account-holder when they fraudulently access funds from the bank.  And yes, a debit card fraud statute would also cover this misconduct and allow the government to charge it with the card-holder as the victim, as is the case in most states and the US Code. But, in the end, it’s not that overly difficult to read the MCM and charge these cases appropriately, thus CAAF’s simple guidance that the government “cleave to the rule set forth in the MCM.” Call the “victim” at sentencing to discuss the impact. But charge the possessor of the property. No rocket science involved.

  7. stewie says:

    I’m just a caveman. Your computers confuse me. Are little tiny people running through those wires? Is it magic? I just don’t know.  What i do know is that while you are correct as to how the laws are currently written, one could as easily write laws that allow the government to pick and choose among several victims in cases like this whether the bank, merchant OR the account holder and no logical laws would be trampled upon…much like my pelt-mate was trampled by that Mammoth…#Mammothpancake.