Section 1742

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penalties for issuing certain written instruments without authority,s is also subject to criminal penalties for counterfeiting and forging such written instruments.

The sixth jurisdictional circumstance applicable to these sections exists if the government intended to be deceived or harmed is the government of the United States. As used in this connection, the term "United States" includes some national credit institutions which are agencies of the United States.85 It excludes from coverage, however, financial institutions the deposits of which are either insured by the Federal Deposit Insurance Corporation or by the Federal Savings and Loan Insurance Corporation. This is in accord with current law which protects only specified Federal lending agencies and not Federally insured lending agencies. The National Commission, on the other hand, proposed to expend current law by reaching all counterfeiting and forgery offenses committed pursuant to a scheme to deceive or injure any national credit institution.87

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In addition to these six circumstances, it should be noted that extraterritorial jurisdiction under section 204 (c) (1) also exists over an offense described in sections 1741 and 1742 if it involves counterfeiting or forgery of, or uttering of a counterfeited or forged copy of, a "seal, currency, instrument of credit, stamp, passport, or public document that is or purports to be issued by the United States." Although few cases apparently exist with respect to extraterritorial jurisdiction under present laws, it seems likely that the courts would interpret current statutes as affording such jurisdiction, in view of the purpose to protect the integrity of domestic currency, passports, and other public documents.88

Note that, under section 205, the exercise of Federal jurisdiction over counterfeiting and forgery offenses does not, in and of itself, preempt the States from exercising concurrent jurisdiction over such offenses, notwithstanding the fact that they may involve United States currency or documents. This accords with current law.

5. Grading

Unlike the National Commission and the provisions of S. 1, as introduced in the 93d Congress, the Committee in the reported bill has eliminated grading differences based upon the monetary amounts involved. The Committee has also rejected misdemeanor treatment for any counterfeiting or forgery offenses, contrary to the recommendation in the Final Report.

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Under sections 1741 and 1742 all counterfeiting and forgery offenses are classified as felonies, thus essentially preserving the grading provisions of current law. This approach is consistent with the theory that these statutes are intended to protect the integrity of writings, symbols of value, and similar items where a Federal interest exists, rather than to punish fraudulent activity in general.

84 See, e.g., 18 U.S.C. 1005.

85 See definitions of "United States," "government," and "government agency" in section 111.

86 See, e.g., 18 U.S.C. 1008, 1010.

87 See Final Report, § 1751 (3) (d).

88 See, e.g., United States v. Birch, 470 F.2d 808, 811-812 (4th Cir. 1972), cert. denied, 411 U.S. 931 (1973), upholding the exercise of extraterritorial jurisdiction in connection with the forgery or false use of a military pass under 18 U.S.C. 499.

Compare. e... Final Report, §§ 1751(2) (a) (ii) and 1751(2) (b) (vi).

90 See id. § 1751(2) (c).

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Counterfeiting is graded as a Class C felony (up to fifteen years in prison) if the written instrument is or purports to be a written instrument of the United States or a security. In all other cases, the offense is a Class D felony (up to seven years in prison). Forgery is a Class C felony where the written instrument is or purports to be an obligation of the United States. In all other cases, the offense is a Class D felony.

SECTION 1743. CBIMINAL ENDORSEMENT OF A WRITTEN INSTRUMENT 1. In General and Present Federal Law

No counterpart to this section exists under current Federal law. The section is intended to reach the situation in which a person signs or endorses a written instrument on behalf of another when, in fact, he has no authority to do so, i.e., from the written instrument itself, it appears that the person has signed or endorsed as the agent of another person or a government when, in fact, there is no agency relationship.92 Attempts in the Federal system to punish such conduct under forgery statutes have been unsuccessful, the courts holding that such conduct does not amount to forgery since the falsity lies not in the execution of the instrument (the signature or endorsement is genuine) but rather in the representation that an agency relationship exists. The English have remedied this problem by amending their forgery statute to include false agency signings and endorsements." The present English forgery statute provides that a document is forged "if the whole or any material part thereof purports to be made by or on account of a person who did not make it nor authorized its making." 5

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Neither the Final Report of the National Commission nor S. 1, as introduced in the 93d Congress," contained a provision which covered the false agency signature or endorsement. Nevertheless, the Committee is of the view that such conduct, while technically not forgery, poses a comparable threat to the integrity of written instruments and thus deserves treatment similar to that accorded forgery and counterfeiting.

2. The Offense

A. Elements

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Subsection (a) provides that a person is guilty of an offense if, "with intent to deceive or harm another person or a government, he (1) signs or endorses a written instrument purportedly on behalf of another person or a government without authority to do so, or (2) utters or possesses" a written instrument that has been so signed or endorsed.

91 This reflects the present penalty level of 18 U.S.C. 471-473. This position is supported by the National Council on Crime and Delinquency, Hearings, p. 1539.

92 An example of such conduct is as follows: The defendant obtains a check made payable to X. The defendant is not X's agent and has no authority to sign X's name to the check. Nevertheless, he takes the check to a bank where he endorses X's name and, below the endorsement, signs his true name, as follows: "John Defendant, agent for X."

93 See, e.g., Gilbert v. United States, supra note 65; Selvidge v. United States, supra note 63; Asher v. United States, supra note 65.

94 See The Forgery Act of 1861, 24 & 25 Vict., ch. 98, § 24. defining forgery to include unauthorized signings "per procuration," with intent to defraud.

95 The Forgery Act of 1913, 3 & 4 Geo. 5, c. 27, § 1(2).

96 See Final Report, § 1754 (d).

97 See 2-8A1(4) (i).

98 The situation of a false agency signing was originally intended to be covered by the Model Penal Code's section on forgery. See Model Penal Code § 223.1, Comment, pp. 82-84 (Tent. Dr. No. 11, 1960). As finally formulated, however, the section on forgery seemingly does not reach this situation. See Model Penal Code § 224.1.

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Section 1744.

The intent element of this offense is the same as that in sections 1741 and 1742 and thus is meant to cover the current law concept of "intent to defraud” and to be interpreted broadly. The term "written instrument"-likewise used in the two previous sections-is, as has been discussed in connection therewith, defined in section 1746 (i) and is also meant to be given an expansive interpretetion. This statute thus reaches the same written instruments covered by the counterfeiting and forgery statutes, insuring consistent treatment for what are similar offenses.

The phrase "purportedly on behalf of another person or a government" indicates that from the signature or endorsement it appears that the person signing the written instrument has done so as some sort of an agent for the person or government whose name is also endorsed or signed thereon. The phrase "without authority to do so" indicates, of course, that there is, in fact, no such agency relationship between the parties whose names appear on the written instrument.

B. Culpability

The conduct in this offense is signing or endorsing (paragraph (1)) or uttering or possessing (paragraph (2)) a written instrument purportedly on behalf of another person or a government. Since no culpability standard is specifically set forth in this section, the applicable state of mind that must be proved is, by the operation of section 303 (b) (1), at a minimum "knowing," i.e., that the offender was aware that he was, e.g., signing or endorsing a written instrument in such a manner that it purported to be signed or endorsed on behalf of another person or a government.99 The element that the signature or endorsement purportedly on behalf of another person or government was without authority is an existing circumstance. As no culpability level is specifically designated, the applicable state of mind to be shown is at least "reckless," i.e., that the defendant was aware of but disregarded the risk that there was no authority to sign or endorse in such a manner. 100

4. Jurisdiction and Grading

Because of the Committee's belief that the conduct prohibited in this section is essentially similar to forgery, the jurisdictional and grading provisions of this section are identical to those provided in the forgery section (1742). The discussion of those provisions in the portion of this report relating to forgery should therefore be consulted here.

SECTION 1744. CRIMINAL ISSUANCE OF A WRITTEN INSTRUMENT

1. In General

This statute is designed to cover those current statutes in title 18 that prohibit the unauthorized issuance and use of certain specified written instruments. The offense differs from forgery in that the written instrument involved does not falsely purport to be written by another person. To the contrary, the written instrument involved is authentic. That is, the statute is designed to reach the case, for example, where an agent possesses a validly drawn written instrument, with instructions as to when it is to be used, and issues the written instru

99 See section 302 (b) (1).

100 See sections 303 (b) (2) and 302 (c) (1).

ment, with the necessary criminal intent, in violation of those instructions. As the written instrument involved in such a situation is, in fact, authentic, the focus of the statute is not upon protection of the integrity of written instruments (as is the focus of the counterfeiting and forgery statutes) but rather upon protection of the principal from the agent's breach of authority.

Both the Final Report and S. 1, as introduced in the 93d Congress, contained comparable provisions. 101 Section 1744 reflects the Committee's similar conclusion that offenses involving the unauthorized use of authentic written instruments belong in the counterfeiting and forgery series as related offenses that should receive like treatment.102 2. Present Federal Law

The statutes intended to be covered by section 1743 are set out below in chronological order. In general, they fall into three categories: (1) protection of Federal obligations and securities; (2) protection of Federal documents; and (3) protection of documents entrusted to employees of Federal lending agencies and Federally insured financial institutions.

18 U.S.C. 334. This section makes it an offense for certain specified people to issue "any Federal Reserve Notes, without complying with or in violation of the provisions of law regulating the issuance and circulation of such" notes. The statute also makes it an offense for "an officer acting under the provisions of chapter 2 of title 12" (relating to national banks) to countersign or deliver "any circulating notes contemplated by that chapter except in strict accordance with its provisions." The penalty is imprisonment for up to five years.

18 U.S.C. 335. This statute prohibits certain persons connected with a corporation created by an Act of Congress, the charter of which has expired, from issuing any securities of such corporation. Violations are punishable by imprisonment for not more than five years.

18 U.S.C. 500. This section prohibits the issuance of postal money orders without having received or paid the full amount payable therefor, for the purpose of fraudulently obtaining from the United States any sum of money. The section also prohibits the transmission or presentment of a money order knowing it to have been unlawfully issued. The punishment is up to five years' imprisonment.

18 U.S.C. 501. This statute prohibits, inter alia, the delivery, with intent to defraud, of any postage stamp, postage meter stamp, stamped envelope, or postal card "to any person not authorized by an instrument in writing, duly executed under the hand of the Postmaster General and the seal of the Post Office Department or the Postal Service, to receive it." Violations are punishable by imprisonment for not more than five years.

18 U.S.C. 1004. This section prohibits officers, directors, agents, and employees of Federal Reserve banks or member banks of the Federal Reserve System from certifying a check before the amount thereof has been regularly deposited in the bank, as well as doing any other thing in order to evade regulations relating to certification of checks. Violations are punishable by imprisonment not to exceed five years.

101 See Final Report, § 1753; S. 1, § 2-8E6.

102 As the National Commission pointed out, there is no really meaningful difference between the utterer of a forged written instrument and an agent who issues an authenic written instrument in violation of his instructions. In both cases, the offense involves a misuse of a written instrument that purports to be something it is not. See Working Papers, p. 969.

18 U.S.C. 1005. This section applies to the same agents of Federal Reserve banks and member banks as those specified in 18 U.S.C. 1004, as well as agents of national banks and Federally insured banks, and prohibits them from issuing, without authority, any notes of such banks, certificates of deposit, drafts, orders, bills of exchange, acceptances, notes, debentures, bonds, or other obligations, or mortgages, judgments, or decrees. The penalty provided is imprisonment for not more than five years.

18 U.S.C. 1006. This section prohibits certain persons connected with specified Federal lending agencies from issuing various securities without authority. Violations are punishable by imprisonment for not more than five years.

18 U.S.C. 1022. This section prohibits, inter alia, anyone who is authorized to deliver "any certificate voucher, receipt, or other paper certifying the receipt of arms, ammunition, provisions, clothing, or other property used or to be used in the military or naval service," from doing so "without a full knowledge of the truth of the facts stated therein and with intent to defraud the United States." 103 The penalty is up to ten years' imprisonment.

18 U.S.C. 2197. This section prohibits, inter alia, the use or printing by one not entitled to do so, of any "certificate, license, or document issued to vessels, or officers or seamen by any officer or employee of the United States authorized by law to issue the same." Violations are punishable by imprisonment not to exceed five years.

3. The Offense

A. Elements

Subsection (a) provides that a person is guilty of an offense if, "with intent to deceive or harm another person or a government, he (1) issues a written instrument without authority or (2) utters or possesses a written instrument that has been so issued." 104 As noted in connection with sections 1741 and 1742, the intent element in this statute is meant to cover the current law concept of "intent to defraud” and is to be read broadly. The terms "person" and "government" are defined in section 111.

The term "written instrument" is expansively defined in section 1746 (i). It has been discussed in relation to sections 1741 and 1742 and that discussion should be consulted here.

It should be reemphasized that the written instrument involved in an offense under this statute is an authentic written instrument, as opposed to a written instrument that has been falsely made or falsely executed in some manner, as is the case with the written instruments covered by the counterfeiting and forgery statutes. Thus, the criminality involved in an offense under this section lies not in the nature of the written instrument but rather in the conduct of the actor in issuing a particular written instrument without authority.

The phrase "without authority" indicates an agency relationship 105

103 This conduct could also be reached by section 1301 (Obstructing a Government Function by Fraud), which grades the offense at the same level as does this section.

104 Section 2-8E6 of S. 1, as originally introduced in the 93d Congress, prohibited only the initial issuance.

105 This statute is not intended to reach the situation covered by subchapter D of this chapter where one unlawfully takes a written instrument from the owner thereof and subsequently disposes of it to another.