USA v. Kyle Melkonian

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-13543
Non-Argument Calendar
____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
KYLE MELKONIAN,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:21-cr-20414-DPG-1
____________________
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2 Opinion of the Court 22-13543
Before L AGOA , BRASHER , and ABUDU, Circuit Judges.
PER CURIAM:
Kyle Melkonian appeals his conviction and sentence for theft
of government funds, in violation of paragraph 2 of 18 U.S.C. § 641.
For the reasons set forth below, we affirm.
I. FACTUAL BACKGROUND & PROCEDURAL
HISTORY
In 2021, a federal grand jury indicted Melkonian on one
count of theft of government funds, charging him with “know-
ingly and willfully” receiving, concealing, and retaining “with the
intent to convert to his own use and gain” money belonging to the
United States Social Security Administration (“SSA”), “knowing the
money to have been stolen, purloined and converted.” The indict-
ment contained a forfeiture provision, explaining that Melkonian
must forfeit his real and personal property that constituted or was
derived from the proceeds of the charged crime upon conviction.
Melkonian pled not guilty and waived his right to a trial by
jury. He proceeded to a bench trial on the following stipulated
facts. Melkonian’s father (“P.M.”) lawfully received retirement ben-
efits from the SSA. P.M. lawfully received those benefits until his
death on October 15, 2006. P.M.’s entitlement to SSA benefits
ceased in the month of his death, but Melkonian, who lived with
P.M. at the time he died, did not inform the SSA of P.M.’s passing.
Thus, the SSA continued to pay the benefits after P.M. died.
Melkonian had no entitlement to P.M.’s retirement benefits.
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22-13543 Opinion of the Court 3
The SSA deposited P.M.’s SSA benefits into an account at
American Bank (the “American Bank account”). Melkonian knew
of these deposits, that the SSA made them, and that he had no law-
ful authority to access the account or to receive, retain, or use any
of the money in it. Melkonian “knowingly and willfully” concealed
P.M.’s death so he could continue to receive SSA benefits to use for
his own purposes, such as paying his bills and making personal pur-
chases.
P.M. also had a bank account at J.P. Morgan Chase Bank (the
“Chase account”), which Melkonian had no legal authority to ac-
cess. After P.M.’s death, Melkonian had a recurring check issued
every three months in P.M.’s name from the American Bank ac-
count which automatically deposited into the Chase account.
Melkonian would then withdraw cash from the Chase account for
his own use.
After P.M.’s death, between 2011 to 2020, Melkonian re-
ceived several letters addressed to P.M. from the SSA concerning
P.M.’s benefits. One of the letters stated that a SSA employee
would call to speak with P.M. about the correct payment of the
benefits. When the employee called, Melkonian answered the
phone, claimed to be P.M., provided P.M.’s personal information,
and claimed to be living with his son “Kyle.” Melkonian did this
“knowingly and willfully” in an effort to “intentionally conceal”
P.M.’s death so he could continue to receive the SSA benefits. After
the call, Melkonian received follow-up letters asking P.M. to appear
at the local SSA field office, but Melkonian never responded or
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4 Opinion of the Court 22-13543
appeared. SSA employees also visited Melkonian’s residence to
speak with P.M., but Melkonian told them P.M. could not speak
with them and instructed them to leave the property.
Ultimately, the SSA learned of P.M.’s death in early 2020 and
ceased making payments. By then, the SSA had deposited a total
of $286,944 in benefits into P.M.’s accounts. In April 2020, the gov-
ernment seized the remaining $2,784.03 in the American Bank ac-
count.
The government presented no additional evidence and sub-
mitted the case on the above stipulations. Melkonian moved for a
judgment of acquittal, explaining that he did not dispute the basic
facts of the case, but he did believe the basic facts did not suffi-
ciently qualify as a violation of paragraph 2 of § 641. After addi-
tional arguments, the district court denied the motion. Melkonian
then presented no additional evidence and renewed his motion for
an acquittal, requesting an opportunity to brief his arguments for
the court. The district court granted Melkonian’s request for brief-
ing and issued a continuance.
In his brief, fashioned as a motion for reconsideration of the
district court’s denial of his motion for a judgment of acquittal,
Melkonian argued that the stipulated facts failed to show that he
knew the money was stolen separately from the facts showing he
was the actual thief, nor did the evidence sufficiently establish that
the SSA deposits were even stolen. The government opposed
Melkonian’s arguments.
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22-13543 Opinion of the Court 5
At a hearing, following additional arguments, the district
court found Melkonian guilty of theft of government property and
denied his renewed motion for acquittal. The court found the evi-
dence sufficiently established that Melkonian knew that the money
was stolen or converted due to the number of payments involved
and the active steps he took to conceal P.M.’s death.
Before sentencing, a probation officer prepared Melkonian’s
presentence investigation report (“PSI”), which recommended
denying him the acceptance of responsibility reduction, to which
Melkonian objected. The PSI also set Melkonian’s offense level at
18 and assigned him to criminal history category I, meaning his
guideline imprisonment range was 27 to 33 months. The PSI noted
the maximum fine Melkonian could face was $573,888, pursuant to
18 U.S.C. § 2571(d), and that the guideline fine range was between
$10,000 to $100,000, pursuant to U.S.S.G. § 5E1.2(c)(4).
Meanwhile, Melkonian submitted a pro se letter to the court
reiterating that he did not believe a “theft” occurred and explaining
that “if ” taxpayers had been harmed, he “would be ashamed and
genuinely remorseful.” He also stated that “if ” he had been
“greedy,” he “would also feel very sorry and low even for taking
money that [he] viewed as akin to non-transparent intellectual
property that was not owned by the government.”
The government moved for forfeiture in the amount of
$284,159.97, the difference between the total paid after P.M.’s death
and the amount recovered from the American Bank account. The
government requested substitute forfeiture of all real estate owned
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6 Opinion of the Court 22-13543
by Melkonian, including his residence, explaining that it had not
been able to locate all directly forfeitable property. Melkonian op-
posed the forfeiture, arguing that it would violate the Excessive
Fines Clause of the Eighth Amendment.
At the sentencing hearing, Melkonian argued that he was en-
titled to a reduction for acceptance of responsibility. The court
overruled Melkonian’s objection, citing to Melkonian’s letter to the
court.
Then, after considering the statutory sentencing factors, the
parties’ arguments, and the PSI’s recommendation, the court sen-
tenced Melkonian to fourteen months’ imprisonment and three
years’ supervised release, declined to impose a fine, and ordered
him to pay $284,159.97 in restitution. The court then granted the
government’s motion for forfeiture, noting that the impact on
Melkonian could be determined once his house was sold.
Melkonian’s appeal followed.
II. STANDARD OF REVIEW
We review de novo whether evidence sufficiently supports a
conviction. United States v. Isnadin, 742 F.3d 1278, 1303 (11th Cir.
2014). “A determination of whether a defendant accepted respon-
sibility for his crimes is reviewed for clear error.” United States v.
Williams, 627 F.3d 839, 844 (11th Cir. 2010). Finally, we review de
novo whether a forfeiture order is constitutionally excessive. United
States v. Browne, 505 F.3d 1229, 1278 (11th Cir. 2007).
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22-13543 Opinion of the Court 7
III. DISCUSSION
A. Sufficient Evidence Supports Melkonian’s Conviction.
On appeal, Melkonian continues to argue that insufficient
evidence supports his conviction because the stipulated facts never
established that he knew the funds in his father’s account were sto-
len upon deposit. He alternatively argues that, even if the money
was stolen, he could not receive stolen property from himself.
Evidence sufficiently supports a conviction “if a reasonable
trier of fact could find that the evidence established guilt beyond a
reasonable doubt.” Isnadin, 742 F.3d at 1303 (quoting United States
v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009)). In cases involving
bench trials on stipulated facts, the test is “whether the judge could
accept the stipulated facts, considered in the light most favorable to
the government, as adequate and sufficient to support the conclu-
sion that the defendant was guilty beyond a reasonable doubt.”
United States v. Moore, 427 F.2d 38, 41-42 (5th Cir. 1970).
Paragraph 2 of § 641 prohibits the receiving, concealing, or
retaining of government property “with intent to convert it to his
use or gain, knowing it to have been” stolen or converted. 18 U.S.C.
§ 641. To convict a defendant for theft of government property
under paragraph 2, the government must establish three elements:
(1) the money referenced in the indictment belonged to the United
States or a United States agency; (2) the defendant appropriated the
money to his own use; and (3) the defendant did so knowingly with
the intent to deprive the government. United States v. McRee, 7 F.3d
976, 982 (11th Cir. 1993) (en banc); see also United States v. Rodgers,
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8 Opinion of the Court 22-13543
732 F. App’x 849, 851 (11th Cir. 2018) (unpublished) (relying on
McRee and outlining the three elements needed to support a prose-
cution brought under paragraph 2 of § 641).
Generally, a defendant cannot be convicted under § 641 for
both stealing government property and receiving the same prop-
erty. Milanovich v. United States, 365 U.S. 551, 554-55 (1961). How-
ever, Milanovich does not stand for the principle “that paragraph
two of section 641 is uniformly inapplicable to the person who
stole the Government property in question.” United States v.
Minchew, 417 F.2d 218, 219 (5th Cir. 1969). Thus, the government
can charge a defendant for receiving or retaining stolen govern-
ment property even if the defendant was the one who originally
stole the government property, just so long as the defendant is not
then convicted and punished for both offenses. Id. at 219-20.
Here, the stipulated facts considered in a light most favora-
ble to the government are sufficient to affirm Melkonian’s convic-
tion for violating paragraph 2 of § 641. Moore, 427 F.2d at 41-42.
The stipulated facts establish that Melkonian purposefully con-
cealed his father’s death from the SSA for 13 years, which caused
the SSA to continue sending funds to P.M.’s American Bank ac-
count. Melkonian knew the SSA improperly made these deposits
because he admittedly understood that the deposits should have
ceased upon his father’s passing. Instead of informing the SSA of
P.M.’s death, Melkonian, knowingly and willfully, understanding he
had no lawful authority to do so, accessed his father’s bank ac-
counts and used money he was not entitled to, to pay his bills and
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22-13543 Opinion of the Court 9
make personal purchases. Thus, based on the stipulated facts, the
evidence establishes that Melkonian knew the improperly depos-
ited funds, induced by his continued wrongdoing, were stolen
from the government upon deposit into P.M.’s American Bank ac-
count.
Moreover, even if the initial deposits into the American Bank
account would not put Melkonian on notice that the funds were
stolen, his subsequent post-deposit activity surely did. Melkonian
admittedly understood that the initial deposits into the American
Bank account were not intended for him and that his father was not
entitled to the payments due to his passing. Nevertheless,
Melkonian knowingly and willfully accessed his father’s Chase ac-
count to set up recurring payments from the American Bank ac-
count. At the very least, the transfer of funds from the American
Bank account to the Chase account, then to Melkonian’s posses-
sion, establishes that he knew the funds he received and used were
stolen. Thus, we affirm on this issue.
B. The District Court Did Not Clearly Err in Declining to
Decrease Melkonian’s Offense Level Because He Did
Not Accept Responsibility.
Melkonian also argues that the district court erred in not giv-
ing him a reduction for acceptance of responsibility because he ad-
mitted his guilt through the stipulation of facts and only proceeded
to trial to preserve arguments related to the application of § 641 to
his acts. He contends that the district court should have given more
weight to the stipulations than to his letter which, he maintains,
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10 Opinion of the Court 22-13543
was incoherent and a reflection of his mental illness as opposed to
his sense of remorse.
District courts should decrease a defendant’s offense level if
he “clearly demonstrates acceptance of responsibility for his of-
fense.” U.S.S.G. § 3E1.1(a). This reduction is given to a defendant
as a “reward” for expressing remorse for his wrongdoing and who
wants to reform his future conduct. Williams, 627 F.3d at 844. We
will not set aside the district court’s determination on this issue un-
less “the record clearly establishe[s] that a defendant has accepted
personal responsibility.” United States v. Amedeo, 370 F.3d 1305,
1320-21 (11th Cir. 2004).
The Sentencing Guidelines explain that truthfully admitting
the offense conduct helps show acceptance of responsibility.
U.S.S.G. § 3E1.1(a), comment. (n.1(A)). Furthermore, “[t]his ad-
justment is not intended to apply to a defendant who puts the gov-
ernment to its burden of proof ” except where the defendant goes
to trial to preserve an issue that does not relate to factual guilt. Id.
comment. (n.2).
Additionally, in determining whether a defendant has ac-
cepted responsibility, a court may consider, inter alia, “the of-
fender’s recognition of the wrongfulness of his conduct, his re-
morse for the harmful consequences of that conduct, and his will-
ingness to turn away from that conduct in the future.” United States
v. Scroins, 880 F.2d 1204, 1215 (11th Cir. 1989). A wide range of
conduct can be considered, even the assertion of constitutional
rights, so long as the conduct relates to whether the defendant has
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22-13543 Opinion of the Court 11
accepted responsibility. United States v. Smith, 127 F.3d 987, 989
(11th Cir. 1997) (en banc).
Here, the district court did not clearly err in declining to de-
crease Melkonian’s offense level because the record does not clearly
establish that he accepted responsibility. Amedeo, 370 F.3d at 1320-
21. Melkonian’s letter to the district court evidenced his lack of
actual remorse for the crime he committed. Melkonian disputed
the thefts and emphasized that he would have felt remorse “if ” he
thought he had actually committed a crime. The district court
acted within its authority to consider Melkonian’s letter, and the
record supports the court’s decision in finding that Melkonian
failed to demonstrate an acceptance of responsibility. Thus, we af-
firm on this issue.
C. The Forfeiture Order is Not Unconstitutional.
Finally, Melkonian argues that the forfeiture order violates
the Eighth Amendment because it is grossly disproportionate in
consideration of the maximum guideline fine, the money he used
was not used for criminal activities, he was not the primary target
of the statute, and his offense was rooted on mere inaction.
Where forfeitures are authorized and the government gives
notices of the forfeiture in the defendant’s indictment, the district
court must order forfeiture as part of the defendant’s sentence.
United States v. Hernandez, 803 F.3d 1341, 1343 (11th Cir. 2015) (hold-
ing that the district court erred in denying the government’s forfei-
ture motion in prosecution for a violation of § 641). Theft of gov-
ernment funds, as outlined in § 641, is subject to civil forfeiture
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12 Opinion of the Court 22-13543
pursuant to 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7)(D), and 28 U.S.C.
§ 2461(c). Id. Additionally, the government may move for a substi-
tute forfeiture in instances where the defendant does not retain the
stolen funds, meaning the government can take a defendant’s prop-
erty that was involved in or is reasonably traceable to the crime to
fulfil the forfeiture amount. United States v. Waked Hatum, 969 F.3d
1156, 1166 (11th Cir. 2020).
Because a forfeiture in this context is punishment for an of-
fense, the forfeiture is considered a “fine” within the meaning of
the Eighth Amendment. Id. at 1167 (quoting United States v. Ba-
jakajian, 524 U.S. 321, 328 (1998)). Under the Excessive Fines
Clause of the Eighth Amendment, a punitive forfeiture is unconsti-
tutional when “it is grossly disproportional to the gravity of a de-
fendant’s offense.” Id. (quoting Bajakajian, 524 U.S. at 334)). We
consider three main factors to determine if a forfeiture violates the
Eighth Amendment: (1) whether the defendant is within the class
of persons the criminal statute was principally directed at; (2) the
other penalties authorized by Congress or the Sentencing Commis-
sion; and (3) the harm the defendant has caused. Id.
“If the value of the forfeited property is within the permis-
sible rage of fines under the relevant statute or sentencing guide-
line, the forfeiture is presumptively constitutional.” Id. at 1168. In
fact, “[w]e have upheld all forfeitures imposed by district courts in
amounts up to twice the maximum authorized fine.” United States
v. Sperrazza, 804 F.3d 1113, 1127-28 (11th Cir. 2015) (collecting
cases). The statutory maximum fine for a § 641 violation cannot
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22-13543 Opinion of the Court 13
be more than twice the gross loss. 18 U.S.C. § 3571(d). Addition-
ally, the guideline maximum fine for a defendant with an offense
level of 18 is $100,000. U.S.S.G. § 5E1.2(c)(3).
Here, the forfeiture is not unconstitutional. First, Melkonian
squarely fits within the class of individuals § 641 is principally di-
rected at—an individual who intentionally concealed his father’s
death from the SSA to induce the SSA to continue issuing money
to P.M.’s account for Melkonian’s personal use, knowing he was not
the intended beneficiary. Moreover, the forfeiture amount falls
well below the statutory maximum fine allowed, meaning it is pre-
sumptively constitutional. Finally, Melkonian fraudulently took al-
most $300,000 from the United States for his own use and actively
concealed the fraud, causing great harm. Thus, we affirm on this
issue.
IV. CONCLUSION
For the reasons set forth herein, we AFFIRM Melkonian’s
conviction and sentence.
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