Metropolitan News-Enterprise


Thursday, March 24, 2005


Page 3


Conviction of Former Sheriff for Stealing Federal Funds Is Upheld


From Staff and Wire Service Reports


The Ninth U.S. Circuit Court of Appeals yesterday upheld the conviction of a former Nevada county sheriff who was sentenced to prison for stealing federal funds while in office.

The court rejected former Lander County Sheriff Michael Kranovich’s argument that prosecutors presented insufficient evidence of a connection with federal programs to bring the misconduct within the two federal laws he was convicted of violating.

One statute, 18 U.S.C. Sec. 666, criminalizes theft involving a federally funded program, but applies only where money or property is taken from an organization that “receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant...or other form of Federal assistance.” The other, 18 U.S.C. Sec. 641, proscribes embezzling funds “of the United States.”

Prosecutors contended Kranovich cashed checks written on an account established for forfeited assets which were to be shared with local law enforcement under a program jointly operated with the federal government. He kept the cash in a locked box to which only he had access, they claimed, and by the time the county finance director conducted an audit more than $15,000 was missing.

Seeking to establish the $10,000 element of Sec. 666, prosecutors presented testimony about a $12,775 grant the county received to buy bulletproof vests for officers. Though the grant was for a four-year period, less than $2,000 had so far been spent, and it was not connected with the asset sharing program, Senior Judge J. Clifford Wallace said the evidence was enough to support the jury’s verdict.

Wallace, writing for the three-judge appellate panel, declared:

“[T]here is no reason to distinguish between access to funds in a County bank account and access to guaranteed grant funds that are available upon request. As a result of the grant, the County essentially had access to a $12,775 line of credit. The statute simply requires that the ‘benefits’ be ‘received.’ In fact, once the grant was awarded, the County ‘received’ the ‘benefits’ of the grant. At most, the government was simply holding the funds for the benefit of the County.”

A rational trier of fact, Wallace said, could have found the element proven beyond a reasonable doubt. He noted that in 2000 the U.S. Supreme Court held in Fischer v. United States, 529 U.S. 667, that Sec. 666 should be interpreted broadly.

Turning to Kranovich’s argument under Sec. 641, Wallace noted that the forfeited asset sharing program restricted how the funds could be used and required reports on the spending to be filed with federal agencies.

He reasoned:

“[T]he nature and extent of the federal government’s control over the Program funds was commensurate with controls we have previously deemed sufficient for section 641. We therefore hold there was ample evidence for a rational trier of fact to find beyond a reasonable doubt that the stolen funds were property of the United States.”

Kranovich was sentenced to 18 months in federal prison and ordered to pay $12,500 in restitution. The district judge ruled Kranovich would not have to serve the sentence until his appeal was heard.

The former sheriff, who was elected to office in 1998 after eight years as police chief of Carlin, Nev., still faces state charges of theft, fraudulent appropriation of property and misconduct of a public officer. Trial on those charges is set for June 1 in Lander County.

The case is United States v. Kranovich, 03-10226.


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