CAAFlog » September 2013 Term » United States v. Hines

CAAF decided the certified Army case of United States v. Hines, No. 13-5010/AR, 73 M.J. 119 (CAAFlog case page) (link to slip op.), on Monday, February 24, 2014. The court reverses the decision of the Army CCA that found that the fraudulent receipt of a housing allowance constitutes a separate larceny for each month, and affirms Appellee’s guilty plea and the sentence.

Judge Ryan writes for a unanimous court.

Appellee was a Sergeant stationed at Fort Bragg, NC, in October, 2008, when he began to steal housing and family separation allowances failing to inform the military of his divorce and subsequently asserting on numerous forms that he was still married. Over the following three years and multiple assignments Appellee received various undeserved allowances, including the Basic Allowance for Housing (BAH) at the higher “with dependents” rate, and the Family Separation Allowance (FSA).

The Government discovered Appellee’s fraud and aggregated the improperly-received monthly allowances to charge him with two specifications of larceny and one specification of wrongful appropriation of military property, all of a value of more than $500. Appellee then pleaded guilty, at a general court-martial composed of a military judge alone, to two specifications of false official statement, two specifications of larceny of military property of a value more than $500, and one specification of wrongful appropriation of military property of a value more than $500, in violation of Articles 107 and 121, UCMJ. He was sentenced to confinement for three months, total forfeitures, reduction to E-1, and a bad-conduct discharge. The convening authority disapproved the forfeitures but otherwise approved the sentence.

On review, the Army CCA rejected the Government’s aggregate theory of the case, finding that Appellee “never satisfactorily admitted to a single larceny in an amount over $500.00 and only providently admitted to a series of separate larcenies each in an amount less than $500.00 and each, at a month apart, at substantially different times.” This part of the CCA’s decision created a split with the Navy-Marine Corps CCA that specifically adopted the aggregated, “continuing larceny” theory in United States v. Lepresti, 52 M.J. 644, 653 (N.M. Ct. Crim. App. 1999). The court also found that Appellee’s plea did not satisfactorily resolve the question of whether he was entitled to the housing allowance at the lower individual (without-dependents) rate. The CCA modified the findings but affirmed the sentence as approved by the convening authority.

The Army JAG then certified two issues to CAAF:

I. Whether the Army Court of Criminal Appeals erred when it held that Appellee’s pleas to Specifications 1, 2, and 3 of Charge II were improvident because theft of basic allowance for housing and family separation allowance occurring over multiple months “amounts to a separate larceny each month the money is received.”

II. Whether the Army Court of Criminal Appeals erred when it held that Appellee’s pleas to Specifications 1 and 3 of Charge II were improvident because the military judge “never satisfactorily resolved the inconsistency between [Appellee’s] pleas to the entire amount [of basic allowance for housing] in light of his apparent entitlement to a lesser amount.”

Judge Ryan answers both questions in the affirmative, expressly adopting the reasoning of the 5th Circuit Court of Appeals in United States v. Billingslea, 603 F.2d 515, 520 (5th Cir. 1979), and concluding that any questions of Appellee’s lack of entitlement to the lower individual rate were resolved during the plea inquiry.

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Audio of today’s oral arguments in United States v. Hines, No. 13-5010/AR (CAAFlog case page) and United States v. Knapp, No. 13-5012/AF (CAAFlog case page) is available at the following links:

Hines argument audio

Knapp argument audio

CAAF will hear oral argument in the certified case of United States v. Hines, No. 13-5010/AR (CAAFlog case page) on Monday, November 18, 2013, at 9:30 a.m. The case involves the fraudulent receipt of a housing allowance, and a determination by the Army Court of Criminal Appeals that the monthly receipt of the allowance constitutes a separate larceny for each month.

Active duty personnel are often entitled to a market-based and tax-exempt allowance for housing expenses called the Basic Allowance for Housing (“BAH”). This allowance is payable at an individual rate and at a higher “with dependents” rate, though junior enlisted personnel housed in barracks generally receive no significant allowance. The existence of this allowance encourages all manner of stunningly bad decision-making, such as hasty marriages by junior personnel (entitling them to move out of the barracks and receive an allowance at the higher “with dependents” rate), the purchase of unaffordable properties at inflated prices (as the tax-free nature of the allowance distorts the member’s true income), and numerous fraudulent schemes (because it’s “free money”).

Appellee was a Sergeant stationed at Fort Bragg, NC, in October, 2008, when he employed one such scheme by failing to inform the military of his divorce and subsequently asserting on numerous forms that he was still married. Over the following three years and multiple assignments Appellee received various undeserved allowances, including BAH at the higher “with dependents” rate (whether Appellee was actually entitled to the lower individual rate of BAH is an unresolved question of fact, and is discussed below).

The Government discovered Appellee’s fraud and aggregated the improperly-received monthly allowances to charge Appellee with two specifications of larceny and one specification of wrongful appropriation of military property, all of a value of more than $500. The aggregation of the monthly amounts is significant because the difference between the individual rate and the with-dependents rate of the BAH was less than $500 per month, and proving a larceny of property of a value of more than $500 increases the maximum authorized confinement by an order of magnitude: from one year per specification to ten.

Appellee then pleaded guilty, at a general court-martial composed of a military judge alone, to two specifications of false official statement, two specifications of larceny of military property of a value more than $500, and one specification of wrongful appropriation of military property of a value more than $500, in violation of Articles 107 and 121, UCMJ. He was sentenced to confinement for three months, total forfeitures, reduction to E-1, and a bad-conduct discharge. The convening authority disapproved the forfeitures but otherwise approved the sentence.

But on automatic review, the Army CCA rejected the Government’s aggregate theory of the case:

We reject the approach of the Navy and Marine Corps Court of Criminal Appeals and find that theft of BAH, under these circumstances, amounts to a separate larceny each month the money is received. See United States v. Rupert, 25 M.J. 531, 532 (A.C.M.R. 1987); contra United States v. Lepresti, 52 M.J. 644, 653 (N.M. Ct. Crim. App. 1999) (describing this type of theft as a continuing larceny of an aggregated amount). “For an accused to be convicted of larceny of property having a value of over [$500.00], the record must show either that one item of the property stolen has such a value or that several items taken at substantially the same time and place have such an aggregate value.” United States v. Christensen, 45 M.J. 617, 619 (Army Ct. Crim. App. 1997) (quoting Rupert, 25 M.J. at 532). See also United States v. Harding, 61 M.J 526, 528 (Army Ct. Crim. App. 2005). Here appellant never satisfactorily admitted to a single larceny in an amount over $500.00 and only providently admitted to a series of separate larcenies each in an amount less than $500.00 and each, at a month apart, at substantially different times. Therefore, we approve findings of guilty to reflect that lower amount. Id.; United States v. Hayes, 70 M.J. 454, 458 (C.A.A.F. 2012); United States v. Phillippe, 63 M.J. 307, 309 (C.A.A.F. 2006); UCMJ art. 45(a); Rule for Court-Martial [hereinafter R.C.M.] 910(h)(2).

United States v. Hines, No. 20120024, slip op. at 3 (A.Ct.Crim.App. May 24, 2013) (link to unpub. op.). The court modified the findings but affirmed the sentence as approved by the convening authority.

The Army JAG then certified two issues to CAAF in August:

I. Whether the Army Court of Criminal Appeals erred when it held that Appellee’s pleas to Specifications 1, 2, and 3 of Charge II were improvident because theft of basic allowance for housing and family separation allowance occurring over multiple months “amounts to a separate larceny each month the money is received.”

II. Whether the Army Court of Criminal Appeals erred when it held that Appellee’s pleas to Specifications 1 and 3 of Charge II were improvident because the military judge “never satisfactorily resolved the inconsistency between [Appellee’s] pleas to the entire amount [of basic allowance for housing] in light of his apparent entitlement to a lesser amount.”

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