Embezzlement, Computer Fraud, and Corruption—Federal Employee Legal Problems

A number of federal employees have been indicted, pleaded guilty, or sentenced for various federal crimes in the past couple of days.

In Alabama, John Tilton has been indicted for embezzling Postal Services funds.^[1] According to prosecutors, Mr. Tilton embezzled more than $20,000 over four years while being employed as a counter clerk at the Madison, Alabama, Post Office.^[2]

In Connecticut, George Stockley has waived an indictment and pleaded guilty to misappropriating US Postal Service funds.^[3] Mr. Stockley was accused of misappropriating more than $14,000.^[4]

In California, Robert E. Beehler, the former supervisor and Field Manager for the US Bureau of Land Management, was sentenced to three years of probation and fined $5,000 for stealing US government money.^[5] Mr. Beehler used US government charge cards and checks to make personal expenditures and to pay non-governmental expenses; he admitted to stealing at least $17,939.43, and he has been ordered to make full restitution.^[6]

Embezzlement is covered by 18 U.S.C. § 641, which makes it a crime for a person to embezzle, steal, or purloin any money or thing of value of the United States. The punishment for doing so can be a fine, imprisonment for up to ten years, or both.

In Missouri, Candice G. Smith was sentenced to four years of probation for illegally using her computer access at the Department of Health and Human Services [hereinafter DHHS] to promote her own unlawful prostitution business.^[7] She pleaded guilty in July to unauthorized computer intrusion when she used the LexisNexis database that was made available to her as an employee at DHHS “to aid her in avoiding arrest and prosecution for her prostitution activities”; access to LexisNexis’s personal information databases can not be used to promote personal financial gain.^[8]

Computer fraud is covered by 18 U.S.C. § 1030, which makes it a crime for a person who has an intent to defraud, to exceed her authorization to access a computer system and obtain anything of value from it.^[9] The punishment for a violation of this section is a fine, imprisonment for up to 5 years, or both.^[10]

And finally, in Tennessee, two US Department of Veterans Affairs [hereinafter VA] officials were arrested on November 29, on public corruption charges.^[11] Joseph Haymond and Natalie Coker have been accused of receiving kickbacks worth more than $100,000 each during a two-year period.^[12] Ironically, they are accused of buying red tape for the VA at inflated prices, purchasing more than 100,000 rolls of red tape at a 176% markup, taking $1.00 per roll in kickbacks.^[13]

Kickbacks are covered by 18 U.S.C. § 201(b)(2)(c), which makes it a crime for a public official and corruptly receive anything in value in return for doing any act in violation of his official duty. The punishment for a violation of section 201(b) is a fine of up to 3 times the monetary equivalent of the thing of value, imprisonment for up to 15 years, or both.

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[1] US Attorneys Office [hereinafter USAO], Postal Service Employee Indicted for Embezzlement of Postal Funds, Nov. 30, 2005, available here.
[2] Id.
[3] USAO, Weston Postal Employee Pleads Guilty to Misappropriating Funds, Nov. 30, 2005, available here.
[4] Id.
[5] USAO, Head of Bureau of Land Management Sentenced for Felony Theft of U.S. Government Money, Nov. 29, 2005, available here. (PDF)
[6] Id.
[7] USAO, Federal Employee Sentenced for Computer Hacking to Promote Prostitution, Nov. 30, 2005, available here. (PDF)
[8] Id.
[9] 18 U.S.C. § 1030(a)(4).
[10] Id. § 1030(c)(3)(A).
[11] USAO, V.A. Officials Arrested on Corruption Charges, Nov. 29, 2005, available here.
[12] Id.
[13] Id.