Keselica v. Commonwealth

COURT OF APPEALS OF VIRGINIA

Present: Judges Fitzpatrick, Annunziata and Senior Judge Duff
Argued at Alexandria, Virginia

MICHAEL GEORGE KESELICA, S/K/A
MICHAEL GEORGES KESELICA
OPINION BY
v. Record No. 1105-95-4 JUDGE CHARLES H. DUFF
FEBRUARY 4, 1997
COMMONWEALTH OF VIRGINIA

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Stanley P. Klein, Judge
Richard S. Stolker for appellant.

Kimberley A. Whittle, Assistant Attorney
General (James S. Gilmore, III, Attorney
General; Richard H. Rizk, Assistant Attorney
General, on brief), for appellee.

Michael George Keselica appeals his conviction for

embezzlement. He contends that the trial court lacked subject

matter jurisdiction to try the case. We disagree and affirm.

I.

"On appeal, we review the evidence in the light most

favorable to the Commonwealth, granting to it all reasonable

inferences fairly deducible therefrom." Martin v. Commonwealth,

4 Va. App. 438, 443, 358 S.E.2d 415, 418 (1987).

So viewed, the evidence showed that Robert A. Winstead

resided in Fairfax County until December 4, 1993. In 1989,

appellant was Winstead's "financial adviser, telling [him] which

stocks were available, and what stocks were a good buy."

Winstead testified that he and appellant "were good friends," and

that Winstead "even had [appellant] over to speak to [Winstead's]
Men's Brotherhood at [Winstead's] church." Appellant "would call

[Winstead at his home], by phone" and recommend stocks to buy.

Winstead would agree to purchase shares over the phone.

Appellant sent Winstead invoices requiring payment within seven

days of placing an order. Pursuant to appellant's instructions,

Winstead wrote out and mailed personal checks to appellant's

residence in Gaithersburg, Maryland. From May 1990 until

November 1990, per appellant's instructions, Winstead wrote ten

checks made payable to First Montauk Securities. Winstead mailed

the checks to appellant. Winstead never received "ownership

certificates" for the stocks purchased, so he telephoned

appellant and asked about them. Appellant told Winstead that the

stocks were "in a street name." Although he was concerned about

the absence of ownership certificates, Winstead continued to buy

stocks from appellant; however, Winstead continued to ask about

the certificates, and appellant continued to explain that "it was

in a street name." It was not until June 1993 that appellant

informed the Winsteads that he had misappropriated their money in

order to support a cocaine addiction and discussed repayment.
In a letter dated February 18, 1994, appellant told Winstead

that "[w]hen we first did business together when I was with Dean

Witter I was not guilty of fraud, deceit and greed. I was your

normal stockbroker and family man. However, several years later

is when my life started going downhill because of my addiction to

cocaine."

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 Elta Winstead, Robert's wife, testified that she also

purchased stock from appellant between May 1990 and November 1990

for which she wrote four personal checks. Like her husband, she

mailed personal checks to appellant believing that he would

purchase stock with the funds.

During an interview with Detective Purvis Dawson, appellant

confessed his wrongdoing and confirmed Winstead's account of

events. In a handwritten statement provided to Dawson, appellant

admitted that he advised Winstead "to purchase more Perpetual

stock" in order to "convert the funds to [his] own use to

purchase more coke." According to appellant, "[a]s [he] became

more involved with the drug [he] found [him]self lying more and

stealing more to feed [his] habit. [He] would continue to make

interest payments to Mr. Winstead to give him the impression that

[the] investments were doing well."
On appeal, appellant argues that he gained lawful possession

of the Winsteads' money, and did not convert or form the intent

to convert the funds until later, when he was in Maryland.

Appellant contends that no elements of the offense were committed

in Virginia, and that the trial court lacked subject matter

jurisdiction to prosecute the case, thereby rendering his

judgment of conviction void.

II.
If any person wrongfully and fraudulently
use, dispose of, conceal or embezzle any
money, bill, note, check, order, draft, bond,
. . . or any other personal property,

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 tangible or intangible, which he shall have
received for another or for his employer,
principal, or bailor, or by virtue of his
office, trust, or employment, or which shall
have been entrusted or delivered to him by
another . . . he shall be guilty of
embezzlement. Embezzlement shall be deemed
larceny and upon conviction thereof, the
person shall be punished as provided in
§ 18.2-95 or § 18.2-96.

Code § 18.2-111.

Virginia's venue statute provides:
Prosecution for offenses committed wholly or
in part without and made punishable within
this Commonwealth may be in any county or
city in which the offender is found or to
which he is sent by any judge or court; and
if any person commit larceny or embezzlement
beyond the jurisdiction of this Commonwealth
and bring the stolen property into the same
he shall be liable to prosecution and
punishment for larceny or embezzlement in any
county or city into which he shall have taken
the property as if the same had been solely
committed therein; . . . provided, that if
any person shall commit embezzlement within
this Commonwealth he shall be liable as
aforesaid or to prosecution and punishment
for his offense in the county or city in
which he was legally obligated to deliver the
embezzled funds or property.

Code § 19.2-245.

"Acts done outside a jurisdiction, but intended to produce

and producing detrimental effects within it, justify a state in

punishing the cause of the harm as if he had been present at the

effect, if the state should succeed in getting him within its

power." Strassheim v. Daily, 221 U.S. 280, 285 (1911). The

concept enunciated by Justice Holmes in Strassheim, i.e., that a

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state may punish someone for acts done outside its borders where

the acts were intended to produce and actually produced

detrimental effects within the state, has been termed the "Result

Theory." See State v. Miller, 755 P.2d 434, 437 (Ariz. 1988)

(discussing four theories to determine whether Arizona had

jurisdiction; one theory, based on international law, was termed

the "Result Theory"); 1 see also Herbert B. Chermside, Jr.,

Annotation, Where is Embezzlement Committed for Purposes of
Territorial Jurisdiction or Venue, 80 A.L.R.3d 514 at § 7 (1977)

(explaining that, in a proper case, territorial jurisdiction may

be exercised by state in which accused was only constructively

present at time of offense if the accused "put into operation an

agency or force which does harm in another jurisdiction").

Virginia adopted the "Result Theory" in Travelers Health

Ass'n v. Commonwealth, 188 Va. 877, 51 S.E.2d 263 (1949), aff'd,

339 U.S. 643 (1950). In Travelers, the defendant company

(Travelers) offered and sold "membership contracts" that were

deemed securities. The contracts/securities were offered solely

through mail solicitations; however, Travelers failed to apply

for the requisite securities permit. To obtain a permit, a

prospective seller had to execute a document agreeing that

service could be effected on it through the Secretary of the

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The other theories included "Failure to Perform a Duty,"
"Accomplice Theory," and "Conspiracy Theory." 755 P.2d at
439-40.

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Commonwealth. Travelers argued that because it conducted no

business in Virginia and "transacted [its] entire business

outside the state through the mails," Virginia had no

jurisdiction to prosecute the company for securities violations

in Virginia. Id. at 884, 51 S.E.2d at 265.

The Supreme Court phrased the issue as whether "the

Commonwealth possess[es] the jurisdiction and power to deal with

the commission of crimes of this nature within its borders and

punish same, although the transactions are principally carried on

from without the State through the United States mail." Id. at

891, 51 S.E.2d at 268. The Court established the following

general rule:
"A question often arises as to the
jurisdiction of a crime where the accused,
while in one state, sets in motion a force
which operates in another state, as where a
shot is fired at a person across a state line
or an injurious substance is sent to a person
in another state with the intent to injure
him. In such cases the view has generally
been taken that actual presence in a state is
not necessary to make a person amenable to
its laws for a crime committed there; for if
a crime is the immediate result of his act,
he may be made to answer for it in its
courts, although actually absent from the
state at the time he does the act."

Id. (citation omitted).

In finding Travelers amenable to prosecution in Virginia,

the Court explained: "'It has long been a commonplace of

criminal liability that a person may be charged in the place

where the evil results, though he is beyond the jurisdiction when

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he starts the train of events of which that evil is the fruit.'"

Id. at 892, 51 S.E.2d at 269 (quoting United States v.

Steinberg, 62 F.2d 77, 78 (2d Cir. 1932), cert. denied, 289 U.S.

229 (1933) (citing, inter alia, Strassheim, 221 U.S. at 284,

285)). The Court added that there are "[a]dditional authorities

to the effect that a person may be guilty of crime by reason of

the use of the mails, and that the crime is deemed to be

committed in the State where the mail is received and the

prohibited results occur." Id. at 892, 51 S.E.2d at 269.

In Gregory v. Commonwealth, 5 Va. App. 89, 360 S.E.2d 858

(1987), the defendant was convicted of fraudulent removal and

conversion of a tractor and trailer in violation of

Code § 18.2-115 (fraudulent conversion). Gregory, a resident of

Botetourt County, Virginia, had earlier pledged the tractor and

trailer to a Botetourt County bank as security for a loan.

Gregory, 5 Va. App. at 90, 360 S.E.2d at 859. Pursuant to the

loan, Gregory agreed that he would not sell the rig without the

bank's consent. Id. at 90-91, 360 S.E.2d at 859. Gregory later

admitted that he sold the tractor in Louisiana without the bank's

consent. Id.

Gregory contended that the Virginia circuit court lacked

jurisdiction because the alleged criminal acts did not occur in

Virginia. He also asserted that his criminal intent was not

formed until after he removed the vehicle from Virginia. The

trial court agreed that Gregory did not form the "intent to

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convert the secured property [until] after he removed it from

Virginia," yet it found Gregory guilty. Id. at 92, 360 S.E.2d at

860. We affirmed the conviction and held that "nothing in the

language of [Code § 18.2-115] requires proof that the fraudulent

intent to dispose or the actual disposal of the secured property

occurred within the boundaries of Virginia." Id. at 93, 360

S.E.2d at 860. Applying the result theory, we concluded that

"[w]here harm is caused in Virginia by criminal acts partially

committed within this Commonwealth, such acts can be prosecuted

here." Id. at 94, 360 S.E.2d at 861 (quoting from Travelers, 188

Va. at 892, 51 S.E.2d at 269, that "'a person may be charged in

the place where the evil results, though he is beyond the

jurisdiction when he starts the train of events'"). See also

Foster-Zahid v. Commonwealth, 23 Va. App. 430, 440-41, 477 S.E.2d

759, 764 (1996) (finding that Virginia court had jurisdiction to

prosecute out-of-state parent for parental abduction where

Virginia parent delivered child to defendant out-of-state and

defendant failed to return child to Virginia).

Here, the facts showed that while appellant was in Maryland,

he used the telephone and the mails in a continuing scheme to

solicit funds from the Winsteads for the sole purpose of

diverting their funds to his own use. Appellant purposely lied

about the absence of stock certificates and made sham interest

payments in order to continue his embezzlement scheme and inflict

further harm on the Winsteads in Virginia.

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 The record established that appellant, while located in

Maryland, set in motion a scheme intended to produce and which

did produce immediate detrimental effects in Virginia, namely,

the fraudulent taking of money from Virginia residents and its

attendant conversion to his own use. Appellant used the mails

and telephone system to produce the intended detrimental effects.

Appellant's reliance on Moreno v. Baskerville, 249 Va. 16,

452 S.E.2d 653 (1995), is misplaced. In that case, Moreno sold

drugs to a man named Moore in Arizona, who transported the drugs

to Virginia. Unbeknownst to Moreno, Moore sold them to two men

in Virginia. Id. at 17-18, 452 S.E.2d at 654. The Supreme Court

held that Virginia courts had no jurisdiction to hear the case

and reversed the convictions.

Applying a proximate cause analysis, the Court stated that

"[t]he act of distribution by Moore to [Virginia buyers]

intervened. The situation here is entirely unlike a case in

which a shot fired across a state line 'immediately' results in

harm, thus enabling the forum state to exercise extraterritorial

jurisdiction over the assailant." Id. at 19-20, 452 S.E.2d at

655. Despite its finding that Moreno's acts did not cause the

immediate result in Virginia, the Supreme Court reaffirmed the

rule of law in Virginia
that actual physical presence in a state is
not necessary to make an individual amenable
to its criminal laws if the crime is the
"immediate result" of the accused's act;
[and] under such circumstances, the accused
may be tried in the state's courts even

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 though actually absent at the time the act
was committed.

Id. at 19, 452 S.E.2d at 655.

Here, appellant's acts caused the immediate and intended

result or harm, and no intervening acts broke the causal chain he

set in motion. Therefore, Moreno is distinguishable from and

inapplicable to the facts of this case. Because appellant set in

motion a criminal scheme, the immediate result of which caused

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the intended harm in this state, Virginia had jurisdiction to try

the case. Accordingly, appellant's conviction is valid and is

affirmed.

Affirmed.

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