In the Courts

In United States v. De La Cruz, ____ F.3d ____, 2006 WL 3423143 (7th Cir. Nov. 29, 2006), the Seventh Circuit held that when there is sufficient evidence of an intent to misapply funds, ex post facto approval of the expenditures by the controlling government body is not a defense to a violation of 18 U.S.C. ' 666.

Defendants, public officials in the city of East Chicago, IN, were convicted after a jury trial of misapplying public funds. The case involved a project to pour concrete for public sidewalks. The defendants are alleged to have been involved in a scheme to direct the concrete work to specific contractors without proper approval. It is also alleged that they directed that concrete work be performed on private property using public funds. On appeal, the pair argued that they could not have misapplied funds because the expenditures in question were later properly approved by the city government, and that ratification is a complete defense to a federal prosecution for misapplication of funds under 18 U.S.C. ' 666(a)(1)(A). The Seventh Circuit disagreed, explaining that the key issue is whether the defendants' intended to misapply the funds. Later ratification can be important evidence that the misapplication was not intentional, but it does not serve as a defense when, as here, there is sufficient evidence of criminal intent.