another person in fear that any person will" act in the manner described in six enumerated paragraphs. The language is phrased to parallel that of section 1722, and the discussion there of the elements "property of another" and "threatening or placing another person in fear" are applicable in this context.

Paragraph (1) proscribes the obtaining of property of another by threatening or placing another person in fear that any person will "engage in conduct constituting a crime." This is conceptually similar to the current proscription of 18 U.S.C. 894 (a) which punishes the use, or threat of the use, of any criminal means to collect an extension of credit. Under proposed section 1723, any property, not only an extension of credit, is the item subject to blackmail. As stated before, this paragraph overlaps the prior section dealing with extortion to the extent that violence or threat of violence is a separate crime. When the crime committed or threatened is kidnapping or involves the infliction of bodily injury, prosecution will normally be under section 1722, thus reserving this section for threats or placings in fear concerning other kinds of criminal conduct.69

Paragraph (2) punishes the obtaining of property of another by threatening or placing another person in fear that any person will "accuse any person of a crime." This carries forward the essential prohibitions of 18 U.S.C. 873, as well as the branches of 18 U.S.C. 875, 876, and 877 dealing with accusations of a crime.

Paragraph (3) punishes the obtaining of property of another by threatening or placing another in fear that any person will procure the dismissal of any person from employment or refuse to employ or renew a contract of employment of any person. This brings forward the offenses in 18 U.S.C. 874 and 42 U.S.C. 2703 (b).

Paragraph (4) proscribes the obtaining of property of another by threatening or placing another person in fear that any person will "subject any person to economic loss or injury to his business or profession." This carries forward the present reach of the Hobbs Act, 18 U.S.C. 1951, as interpreted by judicial decisions.

Significantly, subsection 1724 (b) provides that, in a prosecution under paragraphs (1), (3), or (4) of this subsection, the court may permit the introduction of evidence concerning the reputation of the defendant in any community of which the victim was a member at the time of the offense charged, "for the purpose of showing that words or other method of communication employed as a means of obtaining the property in fact carried a threat." As pointed out in connection with section 1722 (Extortion), this provision codifies existing statutory and case law under 18 U.S.C. 894 and 1951 (carried forward herein in paragraphs (1) and (4)). Only the application to paragraph (3) represents a possible expansion of current law, but one which the Committee deems justified by the strong policy of protecting the employees covered by section 1722 (c) (6) and (7) 70 from extortionate. inroads on their salaries.

Paragraph (5) prohibits the obtaining of property of another by threatening or placing another person in fear that any person will "expose a secret or publicize an asserted fact, whether true or false,

69 The conduct must constitute a "crime" as defined in section 111. Thus, obtaining property by threat to engage in conduct constituting a mere infraction (e.g., disorderly conduct (section 1861)) does not violate this section.

70 The jurisdictional subsection of this section limits the application of paragraph (3) to such employees.

with intent to subject any person, living or dead, to hatred, contempt, or ridicule, or to impair his personal, financial, professional, or business reputation." This carries forward the threat to reputation aspects of 18 U.S.C. 875, 876, and 877, but clarifies the elements of those offenses.

Paragraph (6) punishes the obtaining of property of another by threatening or placing another person in fear that any person will "take or withold official action as a public servant, or cause a public servant to take or withold official action." 71 This continues the essential proscriptions of 18 U.S.C. 872 and 26 U.S.C. 7214(a). The term "official action" is defined in section 111 to mean a "decision, opinion, recommendation, judgment, vote, or other conduct involving an exercise of discretion by a public servant in the course of his employment." B. Culpability

The conduct in this section is obtaining property by threatening or placing another person in fear that any person will engage in any of the types of acts enumerated in paragraphs (1) through (6). Since no culpability level is specifically designated, the applicable state of mind that must be proved is at least "knowing," i.e., that the offender was aware of the nature of his conduct.72

The element that the property obtained is "property of another" is an existing circumstance. Since no culpability standard is specifically prescribed, the applicable state of mind that must be proved is, at a minimum, "reckless," i.e., that the offender was aware of but disregarded the risk that the property was of the type referred to.73

In paragraph (5), the clause beginning with the words "with intent” states the particular purpose with which the conduct there described (i.e., exposing a secret or publicizing an asserted fact, whether true or false) must be shown to have been engaged in.

3. Defense

Subsection (b) provides that it is a defense to a prosecution under this section, other than a prosecution under subsection (a) (1), that the defendant believed his conduct to be justified, and any threatened accusation, exposure, or publication to be true, and that his sole intention was to compel or induce the other person to take lawful and reasonable action to prevent or remedy the asserted wrong that prompted the defendant's conduct.

As indicated in the discussion of the previous section, this defense (which is not included for the crime of extortion) is intended to provide a type of "claim of right" defense for certain kinds of threats arising out of and relating to a bona fide dispute between parties where the sole intent of the accused was to compel or induce the other party to take legal and reasonable action to prevent or remedy an asserted wrong. The defense is not available under paragraph (1), involving a threat or placing of another in fear that any person will engage in a crime. It would apply in a limited way to a situation, for example, where a party

71 This language and that of the preceding paragraph is derived from the recommendation of the National Commission. See Final Report, § 1617(1)(c) and (d). 72 See sections 303(b) (1) and 302(b) (1). In paragraph (1), however, there is no need to prove any state of mind as to the fact that the conduct constituted a crime, only that the actor knew he was engaging in the conduct. See section 303 (d) (1) (A).

73 See sections 303(b) (2) and 302 (c) (1). The terms "property" and "property of another" are more fully discussed in relation to theft, section 1731, infra. That discussion is applica ble here.

74

76

to an automobile accident threatens to press criminal charges against the other party (whom he believed to have committed an offense relating to the accident), unless the other party promptly paid for the damage to his car. It would also apply to a situation where a housewife in an apartment infested by roaches threatened her landlord that she would send pictures of the roaches to a newspaper of interstate circulation unless the exterminators were called. Other illustrations would include a situation in which a person threatened to picket a store unless the proprietor refunded money paid by the defendant for allegedly defective goods. Where, by contrast, the party making the threat had no honest complaint of his victim and issued the threat only to coerce the other party into parting with his property, the defense would not lie and the maker of the threat would be guilty under this section. Nor would the defense apply to threats unrelated to the bona fide claim asserted by the defendant, such as threatening a landlord with exposure of embarrassing personal affairs in order to coerce him to respond to the complaint about roaches. To a limited extent, therefore, the defense retreats from the decision in Pignatelli, supra. A somewhat comparable provision, which was included as an affirmative defense to the National Commission's proposed criminal coercion offense,75 was strongly criticized by Bar and consumer groups as likely to have a chilling effect on legitimate activity. The Committee, apart from refining the elements of the defense as compared with the National Commission version, has transformed the defense from an "affirmative" one to an ordinary one. This has the effect of removing the burden from the defendant of proving the elements of the defense by a preponderance of the evidence." Rather, all that will be required is that the issues comprising the defense be sufficiently raised; the prosecution will then have the burden of disproving the defense beyond a reasonable doubt. Although the Committee is aware that this may pose particular prosecutive difficulties in light of the focus of the defense on the defendant's subjective belief and intent, it deems this allocation of the burden of proof warranted in order to counteract the inhibiting effect on legitimate activities which might flow from a contrary characterization of the defense as "affirmative." The Committee also considers that its formulation is an improvement over the provisions of section 1723 of S. 1400, which required that a threat to impair personal, professional, or business reputation be made "unjustifiably." and that any taking or withholding of official action or the causing of either of the same be done "unjustifiably" for the statute to apply. The quoted term is less precise than the defense set forth here in subsection (b). Moreover, by not making the "justifiability" of the conduct an element of the offense, the requirements of proof have been streamlined so that lack of justification need not be negatived in every case.

4. Jurisdiction

Subsection (d) provides that there is Federal jurisdiction over an offense under this section in three circumstances.

74 See, e.g., Keys v. United States, 126 F.2d 181, 182 (8th Cir.), cert. denied 316 U.S. 694 (1942) (threat by defendant to distribute an "educational" pamphlet concerning dangers of cooking with aluminum unless he received contributions from the aluminum association, held to constitute an offense under a forerunner of 18 U.S.C. 875); see also Working Papers, p. 844.

75 See Final Report, § 1617; Working Papers, pp. 843-845.

78 See the testimony of Mr. Richard A. Givens. Hearings, p. 6484.

77 See definition of "affirmative defense" in section 111.

Section 1724.

The first arises if a circumstance specified in subsection 1722 (c) exists or has occurred. Since the only difference between the extortion offense and blackmail as defined in this section is the type of harm threatened or inflicted by the defendant to obtain the property of another, no less jurisdictional coverage is warranted for the latter offense than for the former. Accordingly, the Committee determined to duplicate the extortion jurisdiction for the present offense as well. The discussion of the jurisdictional bases in subsection 1722 (c) in connection with that section is applicable here.

The second and third circumstances exist if the fear in subsection (a) (1) or (a) (2) involves a Federal crime, or if the fear in subsection. (a) (6) involves Federal official action. A statement of these additional bases is necessary in order to permit this section to implement its specific prohibitions regarding such offenses.

5. Grading

A complicated grading structure, virtually identical to that for theft (section 1731) has been provided for this offense, based principally on the value of the property obtained. Under subsection (c), an offense described under this section is a Class C felony (up to fifteen years. in prison) if the property has a value in excess of $100,000. It is a Class D felony (up to seven years in prison) if the property has a value between $500 and $100,000, or if, regardless of its value, the property is of various specified types.78 An offense under this section is a Class A misdemeanor (up to one year in prison) if the property has a value between $100 and $500 and a Class B misdemeanor (up to six months in prison) in any other case. The Committee considers the above scheme to be an equitable way to grade the offenses in this section, which deal principally with peaceful, albeit criminal, methods of obtaining property. Similar offenses in present Federal law range from up to twenty years in prison (18 U.S.Č. 894, 1951) to one year (e.g., 18 U.S.C. 873), and at least one section uses a petit-grand larceny approach to grading (18 U.S.C. 872).

SECTION 1724. GENERAL PROVISIONS OF SUBCHAPTER C

This section contains special definitions, a proof subsection, and a defense precluded for this subchapter.

Under subsection (a), two terms used in grading the offense under section 1723-"counterfeiting implement" and "written instrument”— take on the definitions set forth in section 1746. Accordingly, "counterfeiting implement" means an engraving, plate, hub, stone, paper, tool, die, mold, ink, photograph, negative, or other implement or impression designed for or suited for the making of a counterfeited written instrument. "Written instrument" means (1) a security; (2) a paper, document, or other instrument containing written or printed matter or its equivalent; and (3) a symbol or evidence of value, right, privilege, or

78 I.e., a firearm, ammunition, or a destructive device; a motor vehicle, vessel, railroad vehicle, or aircraft; a record or other document owned by, or under the care, custody, or control of, the United States; a counterfeiting implement designed for the making of a written instrument of the United States; a key or other implement designed to provide access to mail or property owned by, or under the care, custody, or control of the United States or mail other than a newspaper, magazine, circular, or advertising matter. Many of the above terms are defined in section 111; the terms "counterfeiting implement" and "written instrument" are stated in section 1724 (a) to have the meanings set forth, repectively, in section 1746 (b) and (i).

identification that is capable of being used to the advantage or disadvantage of any person.

Subsection (b) permits proof concerning the reputation of the defendant for certain purposes in a prosecution under section 1722 or 1723(a)(1), (3), or (4). This evidentiary provision has been discussed in connection with those sections.

Subsection (c) provides that it is not a defense to a prosecution under section 1722 or 1723 that the defendant, by the same conduct, also committed an offense described in section 1321 (Witness Bribery), 1322 (Corrupting a Witness or an Informant), 1351 (Bribery), 1352 (Graft), 1353 (Trading in Government Assistance), 1354 (Trading in Special Influence), 1355 (Trading in Public Office), or 1731 (Theft). This provision, which is derived from New York law, is explained in this report in connection with section 1321, and that discussion should be consulted here. It is designed to obviate a potential problem under this proposed Code concerning a technical defense which Federal courts have uniformly rejected with respect to current comparable statutory provisions.

SUBCHAPTER D.-THEFT AND RELATED OFFENSES

(Sections 1731–1738)

This subchapter deals with offenses involving theft and theft-related activities. At present, there are approximately one hundred Federal statutes purporting to deal with the misappropriation of property belonging to another. The purpose of this subchapter is to consolidate and simplify these existing statutes and to propose in their stead a relatively straightforward group of seven sections covering crimes that may broadly be denominated as "theft" and "fraud."

Section 1731 collects in one section most of the common forms of theft, such as larceny, embezzlement, fraud, false pretenses, and the like. Section 1732 creates a new offense covering trafficking in stolen property. It is designed to create a distinction between the trafficker in stolen goods (the so-called professional "fence") and the individual who receives stolen goods for his own use. The trafficker is subject to a sentence equivalent to that for theft of the same property while the receiver is subject to a sentence one grade lower. Receiving stolen property is covered in section 1733.

Section 1734 essentially simplifies and reenacts the current mail and wire fraud statutes. It also creates a new offense, based on a Senatepassed bill, of engaging in a pyramid sales scheme. The next three sections are more specific in coverage. Section 1735 deals with bankruptcy fraud; section 1736 covers conduct that fraudulently interferes with a security interest held by another individual; and section 1737 reenacts, inter alia, the fraud provisions of the Federal Environmental Pesticide Control Act and the sound recording copyright laws. Finally, section 1738 contains definitions of the major terms used in