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UNITED STATES INC. v. RICHARDS

May 27, 1998

UNITED STATES OF AMERICA INC.,
v.
DANIEL D. RICHARDS, Defendant.



The opinion of the court was delivered by: ACKERMAN

OPINION

 Ackerman, D.J.

 On May 15, 1998, this court concluded a three day hearing on the admissibility of expert testimony under United States v. Pohlot, 827 F.2d 889 (3d Cir. 1987). *fn1" For reasons which I will detail further, defendant's mental disease evidence is INADMISSIBLE.

 I. Background

 The eighteen count indictment alleges that the defendant, Daniel Richards, embezzled money in his capacity as the general partner of six limited partnerships formed to build low income housing under the Rural Rental Housing Program ("RRH") administered by the Farmers Home Administration ("FmHA") in violation of 18 U.S.C. §§ 666(a)(1)(A), 658. According to the Indictment, the defendant was the general partner of six limited partnerships each of which was formed to build separate rural housing projects. The housing projects rented to low income tenants at rates below that of the prevailing market. As part of the agreement, the FmHA subsidized the interest payments on construction loans used to build the projects. The defendant was also required to maintain two accounts: a General Operating Account and a Reserve Account. The General Operating Account held the deposits from all project revenues and the Reserve Account contained funds for meeting capital expenses. By design, a fixed amount of money was transferred annually from the General Operating Account to the Reserve Account for the purpose of satisfying these capital expenses.

 The Indictment alleges that the defendant violated 18 U.S.C. §§ 666(a)(1)(A), 658 by making unauthorized withdrawals from Reserve Accounts and failing to transfer monies to the Reserve Account. Counts 1-12 allege violations of § 666(a)(1) which provides that:

 
Whoever . . . being an agent of an organization . . . [that benefits more than $ 10,000 from a Federal program]. . . embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that is valued at $ 5,000 or more, and . . . is owned by, or is under the care, custody, or control of such organization, government, or agency [shall be guilty of an offense against the United States].
 
18 U.S.C. § 666(a)(1)(A).

 Counts 12-18 allege violations of 18 U.S.C. § 658 which provides that:

 
Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or pledged to, or held by, . . . the Secretary of Agriculture acting through the Farmers Home Administration . . . [shall be guilty of an offense against the United States]
 
18 U.S.C. § 658.

 Prior to trial, the court held a hearing to determine whether evidence of the defendant's alleged "major depressive disorder" should be admitted for the purpose of negating the mens rea element of the crimes charged. See United States v. Pohlot, 827 F.2d 889 (3d Cir. 1987).

 II. Pohlot

 When confronted with mental disease evidence, Congress has instructed courts to be extremely cautious. Through the Insanity Defense Reform Act of 1984, Congress significantly limited the role played by mental disease evidence in criminal trials. While the Act establishes insanity, as that term is defined by the statute, as a viable affirmative defense, it has eliminated all other affirmative defenses or excuses based upon mental disease or defect. See United States v. Westcott, 83 F.3d 1354, 1357-58 (11th Cir.), cert. denied, 136 L. Ed. 2d 193, 117 S. Ct. 269 (1996). Nevertheless, defendants may still introduce mental disease evidence for the purpose of negating the mens rea element of the offense. See Id.; Pohlot, ...


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