U.S. v. Worthington

Decision Date30 June 1987
Docket NumberD,No. 1152,1152
PartiesUNITED STATES of America, Appellee, v. Robert WORTHINGTON, Defendant-Appellant. ocket 87-1008.
CourtU.S. Court of Appeals — Second Circuit

Kenneth Roth, Asst. U.S. Atty., S.D.N.Y. (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., Helen Gredd, Asst. U.S. Atty., S.D.N.Y., of counsel), for appellee U.S.

Herbert M. Levy, New York City, for defendant-appellant Robert Worthington.

Before VANGRAAFEILAND, MESKILL, and CARDAMONE, Circuit Judges.

CARDAMONE, Circuit Judge:

Appellant was convicted upon a theory that naming a fictitious bank as drawee of a check constituted a "false statement". In common parlance a "bad check"--one drawn with insufficient funds in an account at the time--is not a "statement" subjecting the drawer to federal prosecution. The reason is that such a check may nonetheless be honored or may have been drawn negligently or even innocently. But the act of printing the name of a nonexistent drawee bank on a check fits squarely within the dictionary definition of "false statement". As such, it is not therefore similarly susceptible to an innocent explanation. Instead, like "Nye's sleeve stuffed full of aces", the act is done "with intent to deceive" and to euchre the victim out of his money. Bret Harte Plain Language from Truthful James, American Writers 232 (rev. ed. 1939).

Robert Worthington appeals from a conviction for making a false statement to a federal agency. The alleged "statement" was made on a check submitted to the Internal Revenue Service (IRS). The check was drawn on a nonexistent bank. The prosecution proceeded on the theory that designating a fictitious bank as the drawee of a check was a representation that the bank did in fact exist. On appeal from a judgment entered in the United States District Court for the Southern District of New York (Cannella, J.) on December 19, 1986, appellant challenges this theory, arguing that a check cannot assert or represent anything and, therefore, is not a statement. Because we think that the designation of a nonexistent bank as the drawee of a check constitutes a "statement", we affirm the judgment of conviction.

BACKGROUND

The subject check was submitted to the Internal Revenue Service under the following circumstances. In 1981 Technassociates, Inc., a Washington, D.C.-based data processing and management consulting firm, was managed by its two principals, Peter Ythier and Marvin Zentner. In June of that year the company was experiencing serious cash flow problems arising, in part, from $134,000 in taxes due and owing to the IRS. Ythier and Zentner contacted Worthington--the head of American Internax Planning--to discuss obtaining a line of credit. Zentner, Ythier, and Worthington arranged for Internax Planning to assist As a step towards providing these services, on July 1 two associates of Internax Planning were dispatched from New York City to Washington carrying a letter of introduction signed by Worthington. After examining the financial records of Technassociates, they accepted a check for $2,200 as a down payment on the previously contracted for fee. In a telephone conference, Ythier and Worthington agreed to meet in New York on July 2. In the meanwhile--and also on July 1--an individual, who was not identified at appellant's trial, delivered over the counter in an IRS office in Manhattan a third party check in the amount of $134,000. The following day, July 2, Ythier and Worthington met in New York. Worthington gave Ythier an IRS counter receipt showing that a third party check had been presented to the IRS in satisfaction of Technassociates' tax bill. Ythier gave Worthington two checks totalling $16,800. Both men also signed a contract formalizing the agreement mentioned above.

Technassociates in obtaining a line of credit as well as advancing $134,000 to meet the tax liability. Internax Planning's fee was to be $19,000.

Some weeks later Technassociates was faced with another tax liability, this time in the amount of $94,600. Ythier again contacted Worthington who promised to provide the necessary funds in return for a fee of $15,000. On July 27, an unidentified individual presented a check dated July 23 to the IRS in its Manhattan office in the amount of $94,600. The payee was Technassociates; the drawer's signature was illegible. The check, drawn on the International Bank of San Antonio (Texas), contained the following notation on its reverse side:

This item represents a loan to Technassociates, Inc. to be paid to the IRS under conditions and agreements elsewhere determined. This item not to be deposited until three days from date.

The check was endorsed to the IRS by an unidentified endorser. A few days after that, Technassociates received an IRS counter receipt from Internax Planning indicating that the IRS had received a check in satisfaction of its second tax bill.

Subsequently, during the fall of 1981, the IRS notified Technassociates that the first check had been drawn on an imaginary bank. When Ytheir and Zentner called Worthington to complain, appellant responded that he had "abated" Technassociates' tax problem. Afterwards, the IRS notified Technassociates that the second check was also worthless because it too had been drawn on an imaginary bank.

On June 26, 1986 Worthington was indicted on three counts for his involvement in the submission of the two checks to the IRS. The first count alleged a violation of 18 U.S.C. Sec. 1343, the federal statute proscribing wire fraud. The second and third counts based on alleged violations of 18 U.S.C. Sec. 1001 are significant to this appeal. This statute makes illegal the submission of "any false writing or document" containing "any false, fictitious, or fraudulent statements" to a federal agency in connection with a matter within the jurisdiction of the agency. The second count was based on the July 1 tender of the $134,000 check and the third count alleged the July 27 submission of the $94,600 check in satisfaction of taxes owed by Technassociates.

Worthington was found not guilty on count one, the wire fraud charge. Although the jury was unable to reach a verdict on the second ($134,000) count, it did find appellant guilty on the third ($94,600) count, for which Worthington received a five year prison term and a $10,000 fine.

DISCUSSION
A. Whether a Check Drawn on a Nonexistent Bank is a False Statement

The principal question raised on this appeal is whether the district court properly ruled that a check drawn on a nonexistent bank is a false statement within the meaning of Sec. 1001. Appellant relies on United States v. Elliott, 689 F.2d 178 (10th Cir.1982) (per curiam), which held that submission of a third party check--not backed by sufficient funds--to the Small Business Administration Williams involved a conviction under 18 U.S.C. Sec. 1014 that proscribes, inter alia, knowingly making a false statement to a bank insured by the Federal Deposit Insurance Corporation (FDIC) in order to obtain credit. Williams was convicted essentially of check-kiting, that is, for writing checks unsupported by sufficient funds and depositing them in banks insured by the FDIC. In reversing his conviction, the Supreme Court stated first that the deposit of a check with insufficient funds did not represent the making of a false statement because "technically speaking, a check is not a factual assertion at all, and therefore cannot be characterized as 'true' or 'false.' " Williams, 458 U.S. at 284, 102 S.Ct. at 3091. The Court also relied upon another equally important reason in reversing Williams' conviction. It believed that Congress did not intend to "make a surprisingly broad range of unremarkable conduct a violation of federal law." Id. at 286, 102 S.Ct. at 3092.

as payment on a loan was not a false statement within the meaning of 15 U.S.C. Sec. 645(a). Inasmuch as Elliott rested entirely on the authority of Williams v. United States, 458 U.S. 279, 102 S.Ct. 3088, 73 L.Ed.2d 767 (1982), see 689 F.2d at 180-81, reliance on Elliott simply brings into focus the question of whether Williams governs the present case. We now consider that question.

Worthington argues that Williams governs his conviction. We cannot agree. The rationale of Williams --that drawing a check unsupported by sufficient funds is neither a statement nor the type of conduct Congress aimed to criminalize--is simply inapplicable to the circumstances here. The Supreme Court first concluded that a check makes no representation as to the state of the drawer's bank account. Id. at 285, 102 S.Ct. at 3091. Here, of course, the check contains the name of a drawee "bank", which designates where the check may be presented for payment. Naming a bank is a representation that the bank upon which the check is drawn does in fact exist. Thus, unlike Williams, the assertion in the instant case constitutes a statement.

United States v. Price, 763 F.2d 640 (4th Cir.1985), supports this conclusion. In Price, the court held that the credit card receipts with fictitious credit card account numbers, account owners, and amounts of purchase consisted of false statements. Id. at 643. Printing the name of a nonexistent bank on a check is analogous to the entry of a fictitious credit card account owner on a receipt because in each instance there is an averment that an obligor exists. Cf. United States v. Bonnette, 781 F.2d 357, 365 (4th Cir.1986) (sight draft to which title representing a fictitious sale of a car had been attached represented that the car existed and that it had been sold for value); United States v. Tucker, 773 F.2d 136, 139 (7th Cir.1985) (forged...

To continue reading

Request your trial
11 cases
  • U.S. v. Porcelli
    • United States
    • U.S. Court of Appeals — Second Circuit
    • January 11, 1989
    ... ... United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059, 28 L.Ed.2d 493 (1971)). Porcelli refers us to James v. United States, 366 U.S. 213, 221-22, 81 S.Ct. 1052, 1056-57, 6 L.Ed.2d 246 (1961), in which the Court reversed a tax evasion conviction ... ...
  • U.S. v. Falcone, 89-5718
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • July 11, 1991
    ...States, 562 F.Supp. 151, 156-58 (S.D.N.Y.), aff'd mem., 742 F.2d 1436 (3rd Cir.1983), 33 or a fictitious bank, United States v. Worthington, 822 F.2d 315, 319 (2d Cir.), cert. denied, 484 U.S. 944, 108 S.Ct. 331, 98 L.Ed.2d 358 (1987), 34 is itself a false statement, or in which the maker o......
  • U.S. v. Ayewoh
    • United States
    • U.S. Court of Appeals — First Circuit
    • December 13, 2010
    ...(11th Cir.1991), panel opinion reinstated in relevant part, 960 F.2d 988, 990 n. 6 (11th Cir.1992) (en banc); United States v. Worthington, 822 F.2d 315, 318 (2nd Cir.1987) (deposit of check from fictitious bank was misrepresentation because it constituted a false "averment that an obligor ......
  • United States v. Teman
    • United States
    • U.S. District Court — Southern District of New York
    • June 5, 2020
    ...the simple presentation of the check, that constitutes a false representation." (internal citations omitted)); United States v. Worthington , 822 F.2d 315, 318 (2d Cir. 1987) (finding that "the rationale of Williams —that drawing a check unsupported by sufficient funds is neither a statemen......
  • Request a trial to view additional results
7 books & journal articles
  • FALSE STATEMENTS AND FALSE CLAIMS
    • United States
    • American Criminal Law Review No. 58-3, July 2021
    • July 1, 2021
    ...rule of lenity requires us to rule in favor of the defendants and construe the statute narrowly.”). 33. See United States v. Worthington, 822 F.2d 315, 316 (2d Cir. 1987) (holding that a check naming a nonexistent drawee falls “squarely within the dictionary def‌inition of ‘false statement’......
  • False statements and false claims.
    • United States
    • American Criminal Law Review Vol. 45 No. 2, March 2008
    • March 22, 2008
    ...a national "false contract" law, a check with insufficient funds is not encompassed by the statute), with United States v. Worthington, 822 F.2d 315, 316 (2d Cir. 1987) (holding checks that actively mislead and are intended solely to mislead, such as those naming fictitious drawee, fall "sq......
  • False statements and false claims.
    • United States
    • American Criminal Law Review Vol. 43 No. 2, March 2006
    • March 22, 2006
    ...for an amount greater than the balance of the account on which they are drawn, or "bad" checks. Compare United States v. Worthington, 822 F.2d 315, 316 (2d Cir. 1987) (holding checks that actively mislead and are intended solely to mislead, such as those naming fictitious drawee, fall "squa......
  • False statements and false claims.
    • United States
    • American Criminal Law Review Vol. 46 No. 2, March 2009
    • March 22, 2009
    ...to a check drawn on an account containing insufficient funds, constitutes a 'false statement'"), with United States v. Worthington, 822 F.2d 315, 316 (2d Cir. 1987) (holding checks that actively mislead and are intended solely to mislead, such as those naming fictitious drawee, fall "square......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT