New Precedent: Intent-to-Repay Not a Defense to Postal Funds Misappropriation under 18 U.S.C. §§ 1711 and 641

Introduction

In United States v. Martínez-Mercado, 1st Cir. No. 23-1067 (Mar. 19, 2025), the First Circuit reviewed the conviction of Pedro A. Martínez-Mercado, a former Puerto Rico postmaster, for misappropriating postal funds and converting government property in violation of 18 U.S.C. §§ 1711 and 641. The case arose from Martínez-Mercado’s decision, in the aftermath of Hurricane Maria, to take a sealed “remittance bag” containing $11,435.02 in customer cash and money orders from the Sabana Grande Post Office vault to his new duty station in New Jersey. After a jury convicted him and the district court imposed a six-month sentence, Martínez-Mercado appealed the exclusion of intent-to-repay evidence, a supplemental jury instruction on intent, prosecutorial remarks during rebuttal argument, and the sufficiency of the evidence.

Summary of the Judgment

The First Circuit unanimously affirmed. It held that:

The defense waived any challenge to the district court’s in limine exclusion of evidence showing Martínez-Mercado’s intent to repay the misappropriated funds.
The appellant likewise waived his objection to the district court’s supplemental jury instruction on intent to deprive, having expressly approved the revised charge.
Prosecutorial remarks in rebuttal that likened Martínez-Mercado’s theory to “blaming the victim” were improper but did not constitute plain error in light of their isolated nature, curative instructions, and strong evidence of guilt.
The evidence—direct and circumstantial—amply supported convictions under §§ 1711 and 641, including proof of knowledge, willfulness, conversion, and deprivation of government property exceeding $1,000.

Analysis

1. Precedents Cited

United States v. Lanza-Vázquez, 799 F.3d 134, 138 n.1 (1st Cir. 2015), and United States v. Burgos-Montes, 786 F.3d 92 (1st Cir. 2015)—guiding standards for reviewing challenges to jury instructions and contradictory evidence.
United States v. Olano, 507 U.S. 725 (1993)—distinction between forfeiture and waiver of appellate rights.
United States v. Bruno-Cotto, 119 F.4th 201 (1st Cir. 2024)—requiring an “intentional relinquishment” for waiver and contrasting plain‐error review.
United States v. Tajeddini, 996 F.2d 1278 (1st Cir. 1993), and United States v. Boldt, 929 F.2d 35 (1st Cir. 1991)—prosecutorial impropriety from personal‐opinion remarks.
Morissette v. United States, 342 U.S. 246 (1952)—definition of “conversion” of property entrusted to one’s custody.
United States v. González-Martínez, 825 F.3d 51 (1st Cir. 2016)—specific intent requirement under § 641.
O’Malley v. United States, 378 F.2d 401 (1st Cir. 1967)—failure to deliver government funds supports inference of personal use.

2. Legal Reasoning

The Court’s reasoning unfolded in four parts:

Waiver of Intent-to-Repay Challenge
Although Martínez-Mercado argued on appeal that intent to repay was relevant to intent, he never opposed the in limine motion in district court and conceded the ruling at trial. Because he failed to invoke the plain‐error standard in his opening brief, he waived appellate review of this issue.
Waiver of Jury-Instruction Objection
Martinez-Mercado initially objected to a supplemental instruction conflating “willfulness” and “intent to deprive.” After the court rephrased the instruction and he expressly agreed—“Yes, yes”—he foreclosed further challenge.
Prosecutorial Remarks and Plain Error
In rebuttal, the prosecutor improvidently likened defense counsel’s argument to “blaming the victim” when “you have no defense.” Under the Darden-Young framework, the comment was improper but did not amount to plain error due to its isolated nature, the district court’s admonitory charge, and the strength of the government’s case.
Sufficiency of the Evidence
Viewing the evidence in the light most favorable to the verdict, a rational jury could find beyond a reasonable doubt that Martínez-Mercado:
- Opened a sealed remittance bag of over $11,000;
- Used a portion for personal or unauthorized expenses;
- Kept the full bag out of the banking chain for months;
- Acted knowingly and willfully with intent to deprive the United States of its funds;
- Triggered all elements of §§ 1711 (misappropriation of postal funds) and 641 (conversion of government property).

3. Impact

This decision clarifies critical points in postal‐funds prosecutions:

Intent to Repay Irrelevant: Once unauthorized use of funds is established, a defendant’s post-hoc promise to repay does not negate criminal intent under §§ 1711 or 641.
Strict Preservation Rules: Defense counsel must timely object if they wish to preserve in limine rulings or jury-instruction errors for appellate review.
Prosecutorial Limits: Counsel may respond forcefully to defense theories, but personal‐opinion remarks comparing a strategy to “blaming the victim” risk reversal unless clearly harmless.
Reinforced Standards for Conversion: Accepting Morissette’s broad definition, courts will imply intent to deprive from unauthorized custody, even if funds were later returned in kind.

Complex Concepts Simplified

Waiver vs. Forfeiture: Forfeiture is failing to make a timely objection; the claim survives only under plain‐error review. Waiver is intentionally relinquishing a known right, barring any appellate review.
Plain Error: A four‐part test requiring a showing of (1) error, (2) that is clear or obvious, (3) affecting the defendant’s substantial rights, and (4) seriously affecting the fairness or integrity of the trial.
Conversion of Government Property: An unauthorized use or withholding of government funds entrusted to an employee—even temporarily—counts as conversion under § 641.
Willfulness and Intent to Deprive: Willfulness means acting with knowledge and purpose, not accident. Intent to deprive may be temporary or permanent removal of the owner’s use or benefit.

Conclusion

United States v. Martínez-Mercado establishes that in postal‐funds prosecutions, a defendant’s professed intent to repay misappropriated funds is not a defense to charges under 18 U.S.C. §§ 1711 and 641. It underscores the rigorous standards for preserving evidentiary and instructional objections and delineates the boundaries of permissible prosecutorial argument. Finally, it reaffirms that unauthorized use of government entrusted funds—no matter the motive or post-hoc remediation—supports convictions for conversion and misappropriation when proven beyond a reasonable doubt.