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United States v. McGovern

decided: October 5, 1981.

UNITED STATES OF AMERICA
v.
MCGOVERN, JAMES DANIEL A/K/A JAMES D. PERINO SCULL, JOHN THOMAS JAMES DANIEL MCGOVERN, APPELLANT, NO. 81-1606 (D.C. CRIM. NO. 80-00168-01); UNITED STATES OF AMERICA V. MCGOVERN, JAMES DANIEL A/K/A JAMES D. PERINO SCULL, JOHN THOMAS JOHN THOMAS SCULL, APPELLANT, NO. 81-1607 (D.C. CRIM. NO. 80-00168-02)



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Before Aldisert, Higginbotham, and Sloviter, Circuit Judges.

Author: Aldisert

Opinion OF THE COURT

The question for decision is whether the appellants' conduct constituted a violation of paragraph four of 18 U.S.C. § 2314:

Whoever, with unlawful or fraudulent intent, transports in interstate or foreign commerce any traveler's checks bearing a forged countersignature ... shall be fined ... or imprisoned ... or both.

Convicted in a bench trial, McGovern and Scull argue in this appeal that the government failed to prove the predicate of the federal statutory offense: common law forgery. Appellants contend that the existence of authority to sign another's name to an instrument defeats a forgery charge, and that here appellant McGovern, purchaser of the traveler's checks, authorized appellant Scull to sign McGovern's name to the checks. We will affirm essentially for the reasons set forth by Chief Judge Weber. United States v. McGovern, 505 F. Supp. 195 (W.D.Pa.1981).

I.

In the modern idiom, the appellants' fascinating plan could be dubbed "CITISCAM," because the participants devised a novel method of defrauding Citibank Corporation and certain businesses. The motive for the operation was the existence of an $1,800 debt McGovern owed an increasingly impatient Scull. The scheme was obvious: McGovern would buy $2,400 (for good measure) in traveler's checks from a bank; Scull would sign McGovern's name to the checks and cash them and McGovern would claim to the bank that he had lost the checks, knowing that according to highly advertised traveler's check policy the issuer would promptly "refund" his "lost" checks. If the scheme was successful, either the businesses or the issuer of the checks would bear the loss.

Citibank, one of the planned victims under the scheme, issued the checks to McGovern through a Niagara Falls, New York, bank. The purchase agreement that McGovern signed stated:

The purchaser agrees to sign each check in the upper left corner at the time of purchase with the same signature used in signing this agreement; and to counter-sign each check in the lower left corner when cashed, in the presence of the person cashing it.

Not attuned to the consequences of crossing state lines, McGovern then proceeded to Erie, Pennsylvania, thereby vesting the federal authorities with jurisdiction over the conspirators' activities. There, tutored by McGovern, Scull practiced imitating McGovern's signature, and then, armed with his co-conspirator's driver's license as identification, Scull entered two Erie banks and a GTE store where he cashed the checks and collected $2,400. Playing out the scenario, McGovern then reported to the New York police that his checks had been stolen from his automobile while in Buffalo; one day later he reported the loss to Citibank and, not surprisingly, Citibank issued McGovern $2,400 in replacement checks.

II.

As explained in detail by Chief Judge Weber, forgery in § 2314 means what the term meant under common law in 1823. United States v. McGovern, 505 F. Supp. 195, 196-97 (W.D.Pa.1981) (citing Gilbert v. United States, 370 U.S. 650, 82 S. Ct. 1399, 8 L. Ed. 2d 750 (1962)). Common law forgery has three elements: (a) The false making or material alteration (b) with intent to defraud (c) of a writing which, if genuine, might be of legal efficacy. 505 F. Supp. at 196.

McGovern and Scull contend that under the facts, the first element cannot be established. They rely on the common law precept that authority to sign another's name to a written instrument negates a charge of forgery regardless of fraud or falsehood in the transaction. Whatever validity this argument may have in other contexts, e.g., see United States v. Sonnenberg, 158 F.2d 911 (3d Cir. 1946) (implied authority to endorse war bonds); Oquendo v. Federal Reserve Bank, 98 F.2d 708 (2d Cir.), cert. denied, 305 U.S. 656, 59 S. Ct. 251, 83 L. Ed. 425 (1938) (fraudulently induced authority to sign check); see also United States v. Carney, 328 F. Supp. 960 (D.Del.1971), aff'd per ...


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