U.S. v. Sciortino

• Decision Date: 29 June 1979
• Docket Number: D,No. 616,616
• Citation: 601 F.2d 680
• Parties: 4 Fed. R. Evid. Serv. 1233 UNITED STATES of America, Plaintiff-Appellee, v. Frank SCIORTINO, Defendant-Appellant. ocket 78-1415.
• Court: U.S. Court of Appeals — Second Circuit

Page 680

601 F.2d 680

4 Fed. R. Evid. Serv. 1233

UNITED STATES of America, Plaintiff-Appellee, v. Frank SCIORTINO, Defendant-Appellant.

No. 616, Docket 78-1415.

United States Court of Appeals, Second Circuit.

Argued Feb. 8, 1979.

Decided June 29, 1979.

Arnold E. Wallach, New York City (Harold Borg, Kew Gardens, N. Y., on brief), for defendant-appellant.

Neil Jon Firetog, Sp. Atty., Brooklyn, N. Y. (Edward R. Korman, U. S. Atty., E. D. N. Y.; Thomas P. Puccio, Attorney-in-Charge, U. S. Dept. of Justice, Organized Crime Strike Force, E. D. N. Y., Brooklyn, N. Y., on brief), for plaintiff-appellee.

Before WATERMAN, MANSFIELD and TIMBERS, Circuit Judges.

PER CURIAM:

This appeal is from a judgment entered after a jury trial in the United States District Court for the Eastern District of New York, George C. Pratt, District Judge. Appellant was convicted on two counts for having violated the National Stolen Property Act, 18 U.S.C. § 2314 (1970).

In count one he was charged with transporting in interstate commerce securities valued at more than $5,000, knowing them to have been stolen, converted, or taken by fraud (§ 2314, P 1); and in count two he was charged with transporting in interstate commerce forged securities, knowing them to have been forged (§ 2314, P 3).

Following his conviction, the court sentenced appellant on count one to a two-year term of imprisonment and a $5,000 fine; and on count two to a five-year term of imprisonment, execution of which was suspended and appellant was placed on probation for one month following his release from imprisonment under count one.

We affirm the judgment of conviction on count one, but we reverse the judgment of conviction on count two. The sentence imposed on count one will remain as imposed, for we find no "spill-over" from the sentence on count two which could have affected in any way the sentence on count one.

Briefly, the facts are as follows: In June 1976 a fire destroyed a dwelling owned by appellant and Fergus Norton as tenants in common. They owned the property subject to two mortgages held by Frederick Mannillo and one mortgage held by Nicholas Cone. Appellant notified the insurance broker of the fire and submitted the requisite proofs of losses. The claim was settled for approximately $14,000.

In February 1977 three insurance checks were sent to appellant. Two were for the claim made on the June 1976 fire; one was for $13,396.75 and the other for $624.99. The third was in settlement of a prior fire insurance claim made in October 1975 for $298.34. The checks were made out to appellant and Norton and the mortgagees.

On February 14, 1978, all three checks were deposited into the appellant's personal checking account at the Marine Midland Bank in Huntington, New York. The signature on the deposit slip was the appellant's. The backs of the checks bore what appeared to be endorsements of each payee. Testimony established that the appellant's signatures on these checks were genuine but that those of the other payees were forged. Both Norton and Mannillo testified that they had never seen the checks and that they had never given anyone permission or authority to sign their names to the checks.

The checks were drawn by the New Hampshire Insurance Company on the Merchants National Bank of New Hampshire. A bank manager from the Marine Midland Bank testified as to the actual interstate travel of the drafts through the banking system.

With reference to count one, that of allegedly transporting in interstate commerce securities valued at more than $5,000 with knowledge that they had been stolen, appellant urges reversal of the judgment below on four grounds: first, that there was no showing of the requisite intent on the part of the appellant, for he was under an honest belief that the property was his or, alternately, he was mistaken as to his authority to cash the checks; second, that, inasmuch as he was owner of the insured property and whatever equities the other payees had in the property were not established, he had a right to the insurance proceeds; third, that the government failed to show that the value of the checks stolen exceeded $5,000; and fourth, that, as a matter of law, the checks were not stolen, converted, or taken by fraud.

We have carefully considered each of these claims and we find no merit in any of them. For example, there was substantial evidence from which the jury could infer, as indeed it did, an unlawful intent on the part of appellant. All the evidence indicates a determined effort by the appellant to keep the facts of the insurance settlement a secret: he did not notify his co-owner or mortgagees of the fire or the insurance checks; Norton's signatures on the proofs of losses were forged; the forged endorsements of the other payees on the insurance checks were written in different styles and in different colored inks; and, unlike the accused in Gilbert v. United States, 370 U.S. 650, 82 S.Ct. 1399, 8 L.Ed.2d 750 (1962), a case upon which appellant relies, there was no indication of agency as to the other endorsements, for here appellant did not endorse the forged signatures by adding to the names so signed the word "trustee" under the mistaken belief in his authority to do so as did the accused in Gilbert.

Appellant also asserts a right to all or part of the proceeds of the two checks involved in the indictment and hence claims that the checks were not "stolen" securities within the meaning of section 2314, paragraph 1. The New York statute upon which he relies, however, N. Y. Real Property Law § 254(4) (McKinney 1968), fails to state what appellant claims for it. As the government points out, section 254(4) prescribes a series of steps which appellant has failed to take as prerequisites to any mortgagor's right to the insurance proceeds, such as notifying the mortgagee(s) of the fire loss and such as serving notice of an intention to repair. As holder of the first and second mortgages, Mannillo was still owed over.$19,000 and thus was entitled to the entire amount of the insurance proceeds. Consequently, the $5,000 jurisdictional prerequisite under the first count was established. Apart from the claim that he had a legal right to the proceeds, appellant offers no explanation as to why the checks were not "stolen," in the very broad sense of that word which has been held applicable to section 2314, United States v. Long Cove Seafood, Inc., 582 F.2d 159 (2d Cir. 1978); Lyda v. United States, 279 F.2d 461, 464 (5th Cir. 1960), and which has been used in related statutes. See, e. g., United States v. Turley, 352 U.S. 407, 77 S.Ct. 397, 1 L.Ed.2d 430 (1957).

With reference to count two, that of allegedly transporting in interstate commerce forged securities with knowledge that they had been forged, appellant contends that, even if he knew the endorsements had been forged, such forgeries did not make an otherwise genuine security a forged security within the meaning of the statute.

This contention is not without merit. The legislative history of 18 U.S.C. § 2314 compels us to conclude, as have the Eighth Circuit in Streett v. United States, 331 F.2d 151 (8th Cir. 1964), and the Ninth Circuit in United States v. Simpson, 577 F.2d 78 (9th Cir. 1978), that Congress intended the third paragraph of 18 U.S.C. § 2314 to reach only forged securities, not forged endorsements, and that the forgery of an endorsement on a security which is complete and genuine at the time of the forgery does not render the security a forged security within the meaning of the statute. See United States v. Roby, 499 F.2d 151 (10th Cir. 1974); United States v. Boone, 470 F.2d 908 (4th Cir. 1972); Pauldino v. United States, 379 F.2d 170 (10th Cir. 1967).

As originally enacted, section 2314 did not specifically include within its scope the interstate transportation of forged securities, but extended only to interstate transportation of, Inter alia, stolen securities of the value of $5,000 or more. National Stolen Property Act of May 22, 1934, ch. 333, 48 Stat. 794 (current version at 18 U.S.C. § 2314, P 1). In 1939, Congress extended coverage to "falsely made, forged, altered, or counterfeited" securities, regardless of value. Act of Aug. 3, 1939, ch. 413, § 1, 53 Stat. 1178 (current version at 18 U.S.C. § 2314, P 3).

It is instructive to note that eight years prior to the 1939 amendment, the U. S. Supreme Court in Prussian v. United States, 282 U.S. 675, 51 S.Ct. 223, 75 L.Ed. 610 (1931), interpreted language quite similar to that found in the 1939 amendment and held that an endorsement was not "such a part of the draft as to constitute the...