Insufficient proof that ATM was used ‘without authority’

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Even assuming an ATM is a computer, appellant did not operate it without authority when she used it to deposit forged checks. Her computer fraud conviction is reversed.

The computer fraud statute forbids using a computer without authority to do so. However, the statute does not ban using a computer for unauthorized purposes, such as uttering a forged check or obtaining money by false pretenses.

Background

Appellant Wallace deposited four checks into her bank account at BB&T using an ATM. They were made out to her and drawn upon George Starling’s account at Southern Bank.

The checks were forged. She agreed to a police interview and admitted that she deposited the checks and that she did not know Starling. She refused to say where she obtained the checks.

She was arrested and granted bail. She signed a continuance order but did not appear. Wallace was charged “with four counts of forging a check, four counts of uttering a forged check, four counts of obtaining money by false pretenses, four counts of computer fraud, one count of using false identification to obtain money, and one count of felony failure to appear[.]”

At her bench trial, Wallace said Sumner, her stepfather, was in Wallace’s vehicle when some of the checks were deposited. She testified that Sumner gave her the checks. She explained that the checks were paychecks Sumner received from Starling. She denied endorsing the checks.

Wallace was barred from testifying that she did not appear on the advice of counsel. The court ruled the testimony would be hearsay. The attorney did not testify.

Starling testified he did not write the four checks and that they likely were taken from his work truck.

“BB&T investigator Kevin Wolfe testified that the ATM was a ‘very sophisticated machine’ and had ‘a number of different functions,’ including depositing checks, withdrawing cash, and making balance inquiries. Wolfe opined that an ATM ‘would be considered a computer.’ …

“[T]he trial court found Wallace guilty of uttering forged checks, obtaining money by false pretenses, computer fraud, and failure to appear. It did not find Wallace guilty of forgery or identity fraud.”

Wallace argues on appeal there was insufficient evidence to support her convictions.

Computer fraud

“Wallace challenges her computer fraud convictions under Code § 18.2-152.3. She argues that, first, the ATM she used was not a ‘computer’ under the statute, and second, she did not use the ATM ‘without authority.’

“Assuming, without deciding, that the ATM was a computer, we find that the trial court misinterpreted Code § 18.2-152.3 in finding that Wallace used it ‘without authority.’ …

“Under the Virginia Computer Crimes Act (‘VCCA’), ‘[a]ny person who uses a computer or computer network, without authority’ and ‘[o]btains property or services by false pretenses,’ ‘[e]mbezzles or commits larceny,’ or ‘[c]onverts the property of another’ is guilty of computer fraud.” …

“[T]he words ‘without authority’ clearly modify ‘use[] [of] a computer or computer network’ in Code § 18.2-152.3, rather than the purposes of such use – that is, obtaining property or services by false pretenses, embezzlement, larceny, and conversion.

“Thus, combining Code §§ 18.2-152.2 and -152.3, a computer fraud conviction requires that the defendant either ‘has no right, agreement, or permission’ to use the computer or computer network or uses it ‘in a manner knowingly exceeding such right, agreement, or permission.’ …

“The question here is whether a person who uses a computer to obtain money by false pretenses is per se ‘without authority.’

“To prove that a defendant knowingly exceeded their authorization, the Commonwealth must first establish the scope of the right, agreement, or permission. The manner, rather than purpose, of the use must be unauthorized. …

“The definition of ‘without authority’ explicitly includes “in a manner knowingly exceeding” authorization. Code § 18.2-152.2 (emphasis added). At the same time, the words ‘without authority’ in the computer fraud statute do not modify the enumerated purposes of obtaining property by false pretenses, embezzlement, larceny, and conversion.”

Rule of Lenity

“The unambiguous language of Code § 18.2-152.3 demonstrates that ‘without authority’ modifies the use of the computer itself, rather than the purpose of the use. But even if the language were ambiguous, the rule of lenity would nevertheless compel the same interpretation.

“If the General Assembly found our traditional fraud statutes insufficient and intended to enhance the punishment for all defendants who use computers or computer networks as a tool in committing false pretenses, embezzlement, larceny, or conversion, it could have made it clear by eliminating the words ‘without authority’ in the computer fraud statute.

“Absent such an express legislative intent, we refuse to adopt this broad interpretation.

Intent

“[C]onsidering all evidence, the trial court was entitled to conclude that Wallace knew the falsity of the checks. Despite Wallace’s argument that she was ‘not a sophisticated banker,’ the trial court found that Wallace ‘knew when she got the check that something was wrong.’

“Wallace did not know the payer and was not entitled to be paid, the memo fields reflected work that she did not do, and the checks were already endorsed by someone else in her name. Furthermore, the trial court, as the fact finder, was entitled to find her testimony incredible.”

Failure to appear

“[U]ncontested evidence shows that Wallace signed the continuance order requiring her to appear in court on January 30, 2020, but that she failed to appear on that day. Thus, there is prima facie evidence that her failure to appear was willful.

“While Wallace testified that an attorney’s advice affected her failure to appear, she could not establish what the attorney told her, and the trial court was entitled to determine her credibility as a witness.”

Ruling

“The evidence is insufficient to establish that Wallace used the ATM ‘without authority’ under the computer fraud statute, but sufficient to support the remaining charges.

“Therefore, we reverse her convictions of computer fraud, affirm her convictions of uttering forged checks, obtaining money by false pretenses, and failure to appear in court, and remand the case for entry of a sentencing order consistent with the rulings of this Court.”

Affirmed in part, reversed in part and remanded.

Wallace v. Commonwealth, Record No. 1040-21-1, Feb. 28, 2023. CAV (published opinion) (Ortiz; Athey, concurring in part and dissenting in part). From the Circuit Court of the City of Chesapeake (Brown). Samantha Offutt Thames for appellant. Stephen J. Sovinsky, Jason S. Miyares for appellee, VLW 023-7-091, 18 pp.