Real estate developer David Miller never pretended to be someone else when he used the names of fellow investors on a document he provided to a bank to secure a $337,500 personal loan.

Even so, in 2012 federal prosecutors in Tennessee charged Miller with making a false statement to a bank and, on top of that, aggravated identity theft. The alleged crime: using the names of other investors on the resolution he presented to the bank.

Miller was convicted at trial and sentenced to nearly four years in prison—including a mandatory-minimum two years on the identity-theft counts. He challenged the convictions, setting up a first-impression test case in the U.S. Court of Appeals for the Sixth Circuit.

A three-judge panel on Wednesday unanimously wiped out the identity theft convictions, concluding that the law, on the books since 2004, is ambiguous when it comes to the meaning of “uses.” The ruling narrows the scope of the federal aggravated identity theft law—at least in Michigan, Ohio, Tennessee and Kentucky, the states that make up the Sixth Circuit.

Miller was charged under a federal statute that says it’s a crime to transfer, possess or use the identification of a person to advance another crime. In the case against Miller, for instance, prosecutors tacked on the identity theft charge to a false-statements count.

On the bank document, Miller used the names of investors—two are identified in court papers—and indicated that the group had agreed to put up a piece of property as collateral for a personal loan for his company. The investors had made no such agreement, prosecutors said. Miller, the government said, lied to the bank when he said the investors met and voted to allow Miller to pledge the property.

“Unfortunately, there is nothing in the legislative history to indicate conclusively that Congress intended [the aggravated identity theft law] to cover defendants falsely claiming that other individuals did things that they actually did not do,” Judge Richard Griffin wrote in the Sixth Circuit panel decision.

That Miller lied about having authority to pledge the property, the appeals court said, is “conceptually distinct” from him acting on behalf of any of the individual investors.

Miller’s attorney, Eli Richardson of Nashville’s Bass, Berry & Sims, didn’t immediately comment on the ruling. Earlier this year, in an interview, Richardson said a ruling for prosecutors would give the government “extremely broad use of a powerful tool.”

Sandra Moses, the assistant U.S. attorney in Nashville who argued the case in the Sixth Circuit, didn’t immediately comment on the ruling.

In court papers, Moses argued the law doesn’t require a person to impersonate someone else—a hallmark in the identity theft arena. The words “impersonate” and “pretend,” she said, don’t appear in the statute.

“Though impersonation is certainly conduct that falls within and is often addressed by [aggravated identity theft], the statute does not require it,” Moses said.

The Sixth Circuit panel, which included judges Jeffrey Sutton and Eric Clay, rejected the government’s broad interpretation of the word “use.”

Miller, the Sixth Circuit panel said, “persuasively argues that the meaning of ‘uses’ is not as expansive as the government suggests and that the term must have practical boundaries, particularly in cases such as this where the only ‘means of identification’ used is a name.”

The government didn’t entirely lose the case. The appeals court kept intact a false-statement conviction against Miller. For that crime, based on Miller’s lying to the bank about having authority to pledge property for his personal loan, he was sentenced to 21 months in prison.

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