U.S. v. Jones

• Decision Date: 13 June 1977
• Docket Number: No. 76-1815,76-1815
• Citation: 553 F.2d 351
• Parties: UNITED STATES of America, Appellant, v. Amy Everston JONES, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 351

553 F.2d 351

UNITED STATES of America, Appellant, v. Amy Everston JONES, Appellee.

No. 76-1815.

United States Court of Appeals, Fourth Circuit.

Argued Dec. 10, 1976.

Decided April 12, 1977.

Certiorari Denied June 13, 1977.

See 97 S.Ct. 2928.

Robert A. Rohrbaugh, Asst. U. S. Atty., Baltimore, Md. (Jervis S. Finney, U. S. Atty., Baltimore, Md., on brief), for appellant.

No argument for the appellee.

Before WINTER and CRAVEN, Circuit Judges, and FIELD, Senior Circuit Judge.

FIELD, Senior Circuit Judge:

A ten-count indictment was returned against Amy Everston Jones, charging her with five counts of transporting in interstate or foreign commerce securities ¹ valued at more than $5,000.00, knowing the same to have been "stolen, converted or taken by fraud" in violation of 18 U.S.C. § 2314; and five counts of selling or receiving these same securities knowing them to have been stolen, unlawfully converted or taken by fraud, in violation of 18 U.S.C. § 2315. The defendant moved to dismiss the indictment, contending that the securities involved in the case were forgeries and thus excluded by the limiting language of sections 2314 and 2315. ² The district court agreed with the defendant and dismissed the indictment. ³ The Government has appealed. ⁴

The facts, as presented by the Government, were not basically contested by the appellee and "(f)or (the) purposes of (the motion to dismiss), it (was) not disputed that these checks were 'stolen, converted or taken by fraud'." ⁵ Accordingly, if the securities were not excluded by the limiting paragraphs of sections 2314 and 2315, the acts committed by Jones would constitute indictable offenses.

This is a case of computer abuse, ⁶ involving the input ⁷ into a computer facility of allegedly altered accounts payable data. The computer crime was perpetrated against a Canadian company, Inglis, Limited, which is a subsidiary of Whirlpool Corporation, a United States corporation. It specifically involved the issuance of five checks to one "A.L.E. Jones" ⁸ which should have been issued to Whirlpool. It is the Government's theory that the appellee transported or caused these checks to be transported from Canada to Maryland; ⁹ and then disposed of the checks when they arrived in Maryland. ¹⁰

An understanding of Inglis' accounting system is necessary to explain the scheme devised by the appellee and her cohort, one Michael Everston, who was the supervisor of Inglis' accounts payable department. When payments are made to Inglis' vendors, the supporting documents (invoices and evidence of receipt of goods) are matched in the accounts payable department by the invoice audit clerks. These clerks then attach an accounts payable distribution slip to the supporting documents. At the accounts payable distribution slip level, the clerks record (1) the invoice number, (2) the vendor and/or supplier number, and (3) the amount of the invoice. The clerks then initial as to the recording of that data. The accounts payable distribution slip is attached to the documents to facilitate the preparation and the collection of the data on the supporting documents. The invoice audit clerks then forward the documents to another accounts payable clerk who logs and records the voucher or the accounts payable number. The documents are then transferred to the data processing area where receipt of the documents is noted and they are sent to a key punch operator who sets up cards for the documents. The papers are then picked up by a data control clerk who takes them to a production area for computer processing. Once fed into the computer, it then produces a report called a balancing report which is used to identify all of the invoices in a particular batch. The totals which appear on the balancing report are compared to a taped total which is attached to the group of documents, and this total is then compared against a log maintained by the data processing area. The documents are then sent back to the accounts payable department for a further verification of their accuracy. After the data is entered into the computer, an order is given to the computer to print-out checks, complete with facsimile signatures, payable to the order of the designated payee.

According to the government's testimony the appellee's accomplice, Everston, directed an accounts payable clerk to set up documents under the name of "A.L.E. Jones" which included a vendor number "98844". He then altered Whirlpool accounts payable documents by changing Whirlpool's vendor number "99900" to "98844" to correspond to the "A.L.E. Jones" account. Through a process of personally reviewing the groups of accounts payable documents, Everston was able to store these altered documents in the Inglis computer. Ultimately, the computer issued checks payable to the account of "A.L.E. Jones" which should have been paid to Whirlpool Corporation. The five checks thus issued resulted in over $130,000.00 being paid to the "A.L.E. Jones" account. Upon receipt of the checks in Maryland the appellee deposited them in a specified account to her credit.

The sole issue is whether the alteration of accounts payable documents fed into a computer which resulted in the issuance of checks payable to an improper payee constituted a "falsely made, forged, altered, counterfeited or spurious" security within the meaning of the exclusionary clauses of sections 2314 and 2315 of Title 18.

In considering the phrase "falsely made, forged, altered, or counterfeited" in the statutory sections the district court correctly noted that the terms "are substantially synonymous and refer to the crime of forgery. Greathouse v. United States, 170 F.2d 512, 514 (4 Cir. 1948)." ¹¹ We also agree with the district court's conclusion that the term "forgery" should be viewed in the light of its common law meaning:

"A forged writing was defined in Greathouse as one 'which falsely purports to be the writing of another person than the actual maker.' Greathouse, supra, at 514. It seems apparent from the sources relied upon that this was intended to express the meaning of forgery as it is known at common law. Furthermore, the Supreme Court defined what it termed 'the concept of "federal" forgery' as being no broader than its common law counterpart, in the absence of some contrary indication in the statute or legislative history. Gilbert v. United States, 370 U.S. 650, 655, 82 S.Ct. 1399, 1402, 8 L.Ed.2d 750, 754 (1962). Although the Court was there referring specifically to 18 U.S.C. § 495, the construction of § 2314 in Greathouse was noted with approval; Gilbert, supra, at 657, 82 S.Ct. at 1403, 8 L.Ed.2d at 755. The area of consideration in this case is thus circumscribed by what would have been a forgery at common law." ¹²

However, we disagree with the district court's conclusion that the acts committed by Everston constituted common law forgery. The Supreme Court has noted that " '(f)orgery, or the crimen falsi, * * * may with us be defined (at common law) to be, "the fraudulent making or alteration of a writing to the prejudice of another man's right" * * *.' 4 Blackstone, Commentaries (Christian ed. 1809), 247-248." Gilbert v. United States, 370 U.S. 650, 657 n. 10, 82 S.Ct. 1399, 1403, 8 L.Ed.2d 750 (1962). Significantly then, "(a)n essential element of the crime of forgery is making the false writing * * *." United States v. Maybury, 274 F.2d 899, 903 (2 Cir. 1960) (emphasis added). See Carr v. United States, 278 F.2d 702, 703 (6 Cir. 1960), ("The word 'forgery' is commonly defined as the false making or materially altering, with intent to defraud, of any writing, which, if genuine, might apparently be of legal efficacy or the foundation of a legal liability."); Marteney v. United States, 216 F.2d 760, 763 (10 Cir. 1954), cert. denied, 348 U.S. 953, 75 S.Ct. 442, 99 L.Ed. 745 (1955), ("The words (falsely made and forged) relate to genuineness of execution and not falsity of content.") ¹³

In the present case, the district court was of the opinion that Everston, in fact, made a false writing because "the individual who drafted the instrument in a practical sense was Everston, although he employed the computer as the instrumentality by which the checks were physically drawn." ¹⁴ We think, however, that the acts of Everston did not constitute the making of a false writing, but rather amounted to the creation of a writing which was genuine in execution but false as to the statements of fact contained in such writing. ¹⁵ The distinction is critical to the sufficiency of the indictment.

"In criminal cases the great weight of authority holds false statements in or fraudulent execution of otherwise valid instruments not to be forgery within its common law or unexpanded meaning. Greathouse v. United States, 4 Cir., 170 F.2d 512, 514; United States v. Brown, 2 Cir. 1957, 246 F.2d 541; Marteney v. United States, 10 Cir. 1954, 216 F.2d 760; 41 A.L.R. 229, supplemented, 49 A.L.R. 1529, 51 A.L.R. 568."

First National Bank of South Carolina v. Glenn Falls Ins. Co., 304 F.2d 866, 870 n. 1 (4 Cir. 1962).

The district court was of the opinion that the facts did not warrant the conclusion that false statements appeared on the face of the checks issued by Inglis to "A.L.E. Jones". ¹⁶ We cannot agree. The checks state that the designated amount is payable "to the order of A.L.E. Jones," and implicit in such an unconditional order was the existence of an obligation running from Inglis, Limited, to the payee. There was, of course, no such obligation, but as the result of Everston's misconduct the accounting department of Inglis was defrauded into believing that the company owed a bona fide obligation to "A.L.E. Jones" and, accordingly, issued a genuine instrument containing a false statement of fact as to the true creditor. ¹⁷

We recognize that, at common law, one need not have physically counterfeited an instrument to be convicted of forgery, see In re Count De Toulouse Lautrec, 102 F. 878 (...