U.S. v. Taylor

• Decision Date: 16 October 1986
• Docket Number: 85-1278,Nos. 85-1274,s. 85-1274
• Citation: 802 F.2d 1108
• Parties: 21 Fed. R. Evid. Serv. 1233 UNITED STATES of America, Plaintiff-Appellee, v. Bradford S. TAYLOR, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Vincent Carmen PINTO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1108

802 F.2d 1108

21 Fed. R. Evid. Serv. 1233

UNITED STATES of America, Plaintiff-Appellee, v. Bradford S. TAYLOR, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Vincent Carmen PINTO, Defendant-Appellant.

Nos. 85-1274, 85-1278.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 10, 1986.

Decided Oct. 16, 1986.

James W. Erbeck, Asst. U.S. Atty., Las Vegas, Nev., for plaintiff-appellee.

Lorriane J. Mansfield, Mark B. Bailus, Las Vegas, Nev., for defendant-appellant.

Appeal from the United States District Court for the District of Nevada.

Before PREGERSON, POOLE and JOHN T. NOONAN, Jr., Circuit Judges.

POOLE, Circuit Judge:

This case involves the frustrated attempt by several individuals to sell up to $16 million of stolen blank corporate bonds to an undercover FBI agent. As a result of this attempt, Vincent Carmen Pinto was tried and convicted of transporting stolen securities in interstate commerce in violation of 18 U.S.C. Sec. 2314, possessing goods or chattels stolen from interstate shipment in violation of 18 U.S.C. Sec. 659, and conspiracy to commit these two offenses in violation of 18 U.S.C. Sec. 371. Bradford S. Taylor was also tried on these charges but was convicted only on the conspiracy charge. Both appellants challenge their convictions on various grounds.

FACTS AND PROCEEDINGS

In 1973, a blank bond issue for $25 million by A.C.F. Industries, Inc. was consigned to Emery Freight Co. in New York City for air shipment by National Air Lines to Baltimore, Maryland. The bonds, shipped by a financial printer to A.C.F. Industries, were complete except they lacked serial numbers, the names of the registered bond holders, and the signature of the assistant corporate trust officer. When the container arrived in Baltimore and was opened, the bonds were discovered missing.

Approximately twelve years later, in Las Vegas, Nevada, appellant Taylor and co-defendant Harold Szelap contacted Dennis Thomas, a stockbroker, to inquire whether Thomas had connections who would be interested in purchasing $22-25 million dollars in corporate bonds. At this meeting, Taylor showed Thomas a photocopy of one of the stolen A.C.F. Industries bonds. Appellant Vincent Pinto later met with Thomas and told Thomas that he possessed the bonds. Taylor was present at this meeting.

Thomas contacted the FBI and informed the agents of the offer. Cooperating with the FBI, Thomas gave Pinto the name of undercover agent Rick Baken as a potential purchaser of the blank bonds. Pinto contacted Baken and told Baken that Pinto had more than $22 million of A.C.F. Industries bonds available for sale. Pinto claimed that the bonds were in New York City and requested that Baken supply him with $800 so he could have an associate fly to New York and retrieve the bonds. Baken agreed to provide the money and to purchase $16 million of the bonds for 11% of their face value. Pinto and Baken also agreed that Taylor and Szelap would be compensated by Pinto for arranging the introduction.

The next day, at the Barbary Coast Hotel and Casino in Las Vegas, Baken gave Pinto $800. After the delivery of the cash, codefendant Alex Omega was observed to approach Pinto and was overheard stating to Pinto, "We're going now." Pinto and Omega then left the hotel and casino together. Pinto later claimed that he lied to Baken about the bonds being in New York City, and that the truth was he only wanted the money so he could gamble it.

Several days later, Pinto met with agent Baken at Caesars Palace Hotel and Casino to continue negotiations for the sale of the bonds. Undercover agents observed Omega in the hotel and casino. Later that day, Pinto met Baken at a room in the hotel to finalize the sale. While this meeting was The next day, Taylor was recorded in a telephone conversation with Thomas. During the conversation, Taylor, who was unaware of the arrests of Pinto and Omega, demanded his 1% commission for having helped set up the bond transaction. After this conversation, agents arrived at Taylor's home and arrested him.

going on, agents observed Omega waiting at the elevator landing area on the same floor. When Pinto produced $1 million of the stolen A.C.F. Industries bonds he was arrested. Omega thereafter was arrested, and a search of the briefcase he was carrying revealed scraps of paper containing telephone numbers and flight times between Las Vegas and New York.

Taylor and Pinto, as well as co-defendants Omega and Szelap, were indicted for conspiracy, 18 U.S.C. Sec. 371, interstate transportation of stolen securities, 18 U.S.C. Sec. 2314, possession of goods or chattels stolen from interstate shipment, 18 U.S.C. Sec. 659, and aiding and abetting the above crimes, 18 U.S.C. Sec. 2.

At trial, Pinto took the stand and testified that he came into possession of the bonds back in 1976 or 1977 as a result of his winning a $52,500 bet with a gambler and/or bookmaker named Frank Pappas. Pappas told Pinto he was in financial trouble and so paid his debt with twenty $50,000 face value blank A.C.F. Industries bonds. Because Pinto was in good financial condition, he put the bonds away. Later in 1984, Pinto's finances turned sour. He claims he then started making inquiries about selling the bonds. Soon he met with Baken. Pinto maintains that his statements about having $22-25 million of the bonds was just puffing and that the reason Omega accompanied him to Caesars Palace was to provide security in case Baken tried to rob him.

The jury found Pinto guilty of all charges, but it convicted Taylor only on the conspiracy charge. Both timely appealed.

DISCUSSION

1. Blank Bonds as "Securities"

Taylor and Pinto both argue that their convictions should be reversed because the blank A.C.F. Industries bonds are not "securities" for purposes of 18 U.S.C. Secs. 659 and 2314. Statutory interpretation is a question of law subject to de novo review. Trustees of Amalgamated Insurance Fund v. Geltman Industries, Inc., 784 F.2d 926, 929 (9th Cir.1986).

a. 18 U.S.C. Sec. 2314

Section 2314 makes it a crime to transport in interstate or foreign commerce, any securities, of the value of $5,000 or more, knowing the securities to have been stolen. 18 U.S.C. Sec. 2314. ¹ The term "securities," as used in section 2314, is defined in section 2311:

"Securities" includes any note, stock certificate, bond, debenture, check, draft, warrant, traveler's check, letter of credit, warehouse receipt, negotiable bill of lading, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate; valid or blank motor vehicle title; certificate of interest in property, tangible or intangible; instrument or document or writing evidencing ownership of goods, wares, and merchandise, or transferring or assigning any right, title, or interest in or to goods, wares, and merchandise; or, in general, any instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for warrant, or right to subscribe to or purchase any of the foregoing, or any forged, counterfeited, or spurious representation of any of the foregoing.

18 U.S.C. Sec. 2311.

Clearly, the definition encompasses a genuine corporate bond as well as a forged or counterfeited bond. Appellants argue that the statutory definition, however, does not cover genuine blank bonds that, when correctly filled out, would evidence corporate debt. They rely on United States v. Jackson, 576 F.2d 749 (8th Cir.), cert. denied, 439 U.S. 828, 858, 99 S.Ct. 102, 175, 58 L.Ed.2d 167 (1978), for support.

In Jackson, the Eighth Circuit held that genuine blank stock certificates did not fit within the definition of securities under section 2311. Id. at 755. The court observed that the blank certificates lacked several essential ingredients--the name of the registered owner, a transfer agent's signature, a counter-signature, and the punched-out spaces for the odd-lot certificates. Id. Noting that criminal statutes are construed strictly, the court found that the blank stock certificates were too far removed from the genuine to fall under the express terms of section 2311. Id. at 755-56.

The government does not attempt to distinguish Jackson or attack its reasoning. Instead, the government argues that the bonds are facially valid certificates and thus have the status of "securities" under section 2311. See United States v. Urciuoli, 575 F.2d 768, 769 (9th Cir.1978) (per curiam). In Urciuoli, this court held that the fact that the savings certificates, which had been validly issued by the Banco Popular de Puerto Rico, had been cancelled by the owner subsequent to their theft by the defendants did not alter their status as securities.

There was nothing on the face of the Banco Popular de Puerto Rico certificates to indicate that they were invalid and could not be redeemed. Appearing to be valid, the certificates could have been transferred to an innocent purchaser who only later, upon an attempt to redeem them, would learn of their cancellation.

Id.

Contrary to the government's characterization, the bonds in this case are not facially valid. They lack three essential elements. The bonds have no serial numbers, they lack the name of the holder, and they are not signed by the assistant corporate trust officer. Until these three elements are provided, the bonds cannot be negotiated to a bona fide purchaser. See id. (the Banco Popular de Puerto Rico certificates did not disclose on their face that they had been cancelled, thus they could yet have been sold to an innocent purchaser as genuine securities). Nevertheless, we decline to follow the Eighth Circuit's reasoning, and we hold that the blank bonds in this case are securities within the meaning of the statute.

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