Tamatha Hilton was the bookkeeper for a company called Woodsmith’s. Woodsmith’s made furniture. Ms. Hilton made bad decisions.
Specifically, for a few years, she took checks written by Woodsmith’s customers and gave them to her husband, Jimmy Hilton. Mr. Hilton did not work at Woodsmith’s.
Mr. Hilton gave the checks to his ex-wife, Jacqueline Hilton. Ms. Hilton opened a bank account at Suntrust in her name, saying that she was the owner of a company called Woodsmiths Furniture Company.
She was not.
She was, however, the owner of a pre-printed stamp from an office supply store that said checks made out to Woodsmiths should be deposited into her Suntrust Account.
You can probably guess how that was used.
Over two years Woodsmiths lost around $650,000 to Ms. Hilton’s Suntrust Account.
The three were charged with identity theft, mail fraud, mail theft, money laundering, conspiracy, passing forged securities, and making a false statement to a financial institution.
At trial, Ms. Hilton was acquitted of making a false statement to a financial institution. Everyone else was convicted of everything else.
In their appeal to the Fourth Circuit, resolved in United States v. Hilton, Mr. and Ms. Hilton challenged their convictions for identity theft, on very clever grounds:
Jimmy and Jacqueline appeal their convictions for identity theft and aggravated identity theft, in violation of 18 U.S.C. §§ 1028(a)(7) and 1028A (the identity theft statutes). They argue that the conduct charged, namely, the use of the stamp bearing Woodsmiths’ name in endorsing the stolen checks, did not constitute a violation of the identity theft statutes, because the language of those statutes does not encompass the act of stealing the identity of a corporation.
Ultimately, the Fourth Circuit agreed.
In light of the serious consequences flowing from a criminal conviction, the rule of strict construction rests on the principle that “no [person] shall be held criminally responsible for conduct which he could not reasonably understand to be pro- scribed.” Accordingly, although “[t]he simple existence of some statutory ambiguity is not sufficient” to trigger automatic resolution of the ambiguity in favor of a defendant, “we will construe [a] criminal statute strictly and avoid interpretations not clearly warranted by the text.”
(internal citations omitted)
The statute, 18 U.S.C. § 1028(a)(7) makes it illegal to transfer, possess, or use “a means of identification of another person with the intent to commit, or to aid or abet, or in connection with, any unlawful activity that constitutes a violation of [f]ederal law, or that constitutes a felony under any applicable [s]tate or local law.” The vicious § 1028A – which imposes a two-year consecutive mandatory minimum if someone commits and identity theft crime in connection with another felony – uses the same language.
In the definition section for both statute defines “means of identification” as “any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual.”
Under the Dictionary Act – the Act that defines terms used in federal statutes if there isn’t another definition that’s more closely tailored – “person” includes corporations. “Individual” though, might not.
Because that’s an ambiguous question, the Fourth Circuit held that the identity theft statute does not apply to corporations.
we are left with a “grievous ambiguity or uncertainty in the statute[s],” and we decline to speculate regarding Congress’ intent. Instead, faced with the choice of two plausibly valid interpretations, “we yield to the rule of lenity.”
(internal citations omitted)
Though the convictions for mail fraud, mail theft, money laundering, conspiracy, and passing forged securities still stood. The folks who were convicted were remanded for resentencing.