State v. Reese

• Decision Date: 13 July 1978
• Docket Number: No. 134,134
• Parties: STATE of Maryland v. Margaret REESE.
• Court: Maryland Court of Appeals

Page 86

283 Md. 86

388 A.2d 122

STATE of Maryland v. Margaret REESE.

No. 134.

Court of Appeals of Maryland.

July 13, 1978.

Bruce C. Spizler, Asst. Atty. Gen., Baltimore (Francis B. Burch, Atty. Gen., Clarence W. Sharp and Maria A. Kendro, Asst. Attys. Gen., Baltimore, on the brief), for appellant.

Walter M. Baker, Elkton (Baker & Lockhart, P. A., Elkton, on the brief), for appellee.

Argued before MURPHY, C. J., and DIGGES, LEVINE, ELDRIDGE, ORTH and COLE, JJ.

LEVINE, Judge.

In the present appeal we are called upon to determine whether the making of a false or fictitious entry in the tax rolls of a county government constitutes the crime of forgery either at common law or under Maryland Code (1957, 1976 Repl.Vol.) Art. 27, § 44. Early in 1976, appellee, then Deputy Treasurer of Kent County, Maryland, was indicted on multiple charges arising out of her alleged misappropriation of public funds and falsification of certain county tax records. ¹ At the conclusion of a three-day trial in the Circuit Court for Caroline County, the jury found appellee guilty on eight counts of forgery. ² Thereafter, appellee noted an appeal to the Court of Special Appeals, which reversed the convictions on the ground that the acts complained of did not amount to forgery under Maryland law. Reese v. State, 37 Md.App. 450, 458, 378 A.2d 4 (1977). Because the issue raised here is one of first impression in this state, we granted certiorari, and for the reasons set out below we now affirm.

The grand jury indictment accused appellee of falsely making, altering, forging and counterfeiting "certain entries declaring acquittance or receipt for money." In particular, it was alleged that appellee had noted upon the Kent County tax rolls, for fiscal year July 1, 1973 to June 30, 1974, false interest charges on the state and county tax accounts of several Kent County property taxpayers. The indictment further averred that appellee had fabricated certain entries indicating the date on which individual property owners had remitted their tax payments.

According to the testimony of the State's principal witness, accountant and auditor William G. Noppinger, property taxes in Kent County are ordinarily billed, paid, and processed in the following manner. Taxpayers receive in the mail a tax bill which has been preprinted on an addressograph machine in the Treasurer's office. A taxpayer wishing to pay his bill may do so either by cash or check. When payment is received at the Treasurer's office, copies of the bill previously sent to the taxpayer are pulled from a special file drawer containing only unpaid tax bills. One of these copies is then marked paid, initialed by the attending official and handed or mailed to the taxpayer. The funds received are placed in a cash drawer where they remain until counted at the end of the day. A clerk then takes one of the remaining duplicates of the tax bill and places it on a spindle. After completing a day's business, the sum total of the money and checks in the cash drawer is compared with the aggregate amount of the paid tax bills placed on the office spindle; in theory these figures should agree. Monies collected are then deposited with a local bank on a daily basis. There was evidence to show that appellee was primarily responsible for making the bank deposits.

In the meantime, another employee takes the paid bills, arranges them by tax district and "posts" them to the tax rolls. The tax rolls are essentially ledgers, consisting of alphabetical computer listings of taxpayers by district. Opposite each taxpayer's name are several vertical columns indicating the description of the property, the values of land and improvements (separately listed), the amount of state and county taxes due, the total tax and the date of payment. Posting a bill to the rolls simply involves entering the date of payment in the appropriate column together with any added interest charges if payment is late. It was customary in the Kent County Treasurer's office to denote the payment date with a rubber stamp entry whenever a bill was paid on time. Late payments on the other hand were designated by a long-hand notation. It was not uncommon for appellee to take part in the posting procedure.

After posting the paid bills, a clerk would then place all such bills into a special binder. In no event would posted bills be returned to the file drawer, which was reserved exclusively for unpaid items. Thus, under this system, all outstanding accounts could be identified by searching the special file drawer for a particular bill or by running the tax rolls.

During the course of a routine audit of the books and records of the Kent County Treasurer's office in mid-1975, Mr. Noppinger, quite by accident, uncovered an intricate scheme whereby the Treasurer, Elizabeth Crowding, with the apparent assistance of appellee, managed to embezzle upwards of $10,000 in tax monies. ³ Just how this scheme was effectuated is best illustrated by the following description of a hypothetical transaction spanning a one-year period.

Sometime in 1973, taxpayers A and B would come to the Treasurer's office to pay their property taxes for fiscal year 1973-1974. Taxpayer A would pay in cash and B by check. A clerk would issue legitimate paid receipts to both. At the time the daily bank deposits were made, however, someone would siphon off A's cash payment and use B's check to cover the embezzlement. The office copy of A's tax bill would then be posted to the tax rolls and filed in the paid-bill binder. B's bill, however, would usually disappear and, as far as the tax rolls were concerned, B's account would appear to be overdue, even though payment had, in fact, been effected. B, of course, would not be aware of any irregularity, since he would have received a properly executed receipt for his check payment.

The next year, taxpayer C would arrive and pay his taxes for fiscal year 1974-75; he too would be given a proper receipt. It was at this juncture that it became necessary to tamper with the tax rolls in order to conceal the embezzlement of the previous year. Had B's account continued to appear delinquent on the tax rolls, his property would have been eventually subject to forced sale at public auction. To avoid this possibility and thereby to prevent B from suspecting any wrongdoing, someone would go to the office typewriter and fabricate a new tax bill for B. Unlike an authentic office copy of a tax bill, the fraudulent "duplicate" would neither have been printed on an addressograph machine nor would it have been placed on the office spindle for paid bills. Using taxpayer C's current payment to cover B's "late payment" for the preceding year's taxes, a clerk would then post B's new and fraudulent tax bill to the tax rolls, noting the date of payment in long-hand just as if B had made a late remittance. The same person would also compute and add accrued interest charges on both state and county taxes; again, the purpose being to create the illusion that B's taxes had been paid a year late and were therefore subject to the statutory interest penalty.

Noppinger testified that at least eight of the long-hand notations in the tax rolls were made in appellee's handwriting. These identifications were subsequently corroborated by Thomas Dulaney, a handwriting analysis expert employed by the Federal Bureau of Investigation in Washington, D. C. It is undisputed that the eight long-hand entries indicating payment date and accrued interest charges were utterly false representations. The sole question before us is whether by making these entries appellee committed the crime of forgery under Maryland law.

I

Broadly defined, forgery is the fraudulent making of a false writing having apparent legal significance. Nelson v. State, 224 Md. 374, 378, 167 A.2d 871 (1961); Smith v. State, 7 Md.App. 457, 460, 256 A.2d 357 (1969); R. Perkins, Criminal Law 340 (2d ed. 1969). The offense is comprised of essentially three elements. First, there must be a writing which is the proper subject of forgery. Secondly, this writing must be false. Finally, the writing must have been rendered false with intent to defraud. Finney v. State, Ala.App., 348 So.2d 876, 877, cert. denied, Ala., 348 So.2d 878 (1977); see State v. Smith, 223 N.W.2d 223, 226 (Iowa 1974). In light of our holding in the present case, it will only be necessary to discuss the first two prongs, that is, whether a tax roll may be the subject of forgery and, more importantly, whether the falsification of an entry in such an instrument renders the entire document a false writing for purposes of the definition of forgery at common law or under the Maryland forgery statute.

As a threshold matter, it must first be determined whether a tax roll is a writing with respect to which forgery may be committed. Article 27, § 44, under which appellee was indicted and convicted, sets forth in elaborate detail those documents which, if falsified, will support a conviction for statutory forgery, a felony. Enacted originally in 1799 and modified only slightly in the ensuing 180 years, Article 27, § 44 provides in pertinent part:

"Any person who shall falsely make, forge or counterfeit, or cause or procure to be falsely made, forged or counterfeited, or willingly aid or assist in falsely making, forging, altering or counterfeiting any deed, document or affidavit of waiver or release of mechanics' lien, will, testament or codicil, bond, writing obligatory, bill of exchange, promissory note for the payment of money or property, endorsement or assignment of any bond, writing obligatory, bill of exchange, promissory note for the payment of money or property, acquittance or receipt for money or property, or any acquisition or receipt either for money or for property, with intention to defraud any person whomsoever, . . . shall be deemed a felon, and on being convicted thereof shall be sentenced to the penitentiary for not less than one...