Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-05-10093/USCOURTS-ca9-05-10093-0/pdf.json

Parties Involved:
Albert R. Salman
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

No. 05-10093 Plaintiff-Appellee,

D.C. No.

v.  CR-03-00197-LRH

ALBERT R. SALMAN,

OPINION Defendant-Appellant. 

Appeal from the United States District Court

for the District of Nevada

Larry R. Hicks, District Judge, Presiding

Argued and Submitted

June 9, 2008—San Francisco, California

Filed July 7, 2008

Before: A. Wallace Tashima, M. Margaret McKeown, and

Ronald M. Gould, Circuit Judges.

Opinion by Judge Gould

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COUNSEL

Franny Forsman, Federal Public Defender, and Michael K.

Powell, Assistant Federal Public Defender, Reno, Nevada, for

the defendant-appellant. 

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Gregory A. Brower, United States Attorney, Robert L. Ellman, Appellate Chief, and Elizabeth A. Olson, Assistant

United States Attorney, Reno, Nevada, for the plaintiffappellee. 

OPINION

GOULD, Circuit Judge: 

Albert R. Salman appeals his convictions for two counts of

passing a fictitious financial instrument, in violation of 18

U.S.C. § 514(a)(2), and two counts of attempting corruptly to

interfere with the administration of the internal revenue laws,

in violation of 26 U.S.C. § 7212(a). On two separate occasions, Salman sent a document he titled “Sight Draft” and a

tax payment voucher for the amount of the sight draft to the

Internal Revenue Service (“IRS”). Relying on our decision in

United States v. Howick, 263 F.3d 1056 (9th Cir. 2001), Salman argues that the sight drafts he submitted to the IRS are

not unlawful fictitious financial instruments under 18 U.S.C.

§ 514(a)(2), and therefore the government presented insufficient evidence to support his convictions on those counts. Salman also challenges the sufficiency of the evidence to support

his convictions for corruptly interfering with the administration of the internal revenue laws, arguing that because his

convictions under 26 U.S.C. § 7212(a) are directly dependent

on his passing of unlawful fictitious instruments, they can

only stand if his convictions under 18 U.S.C § 514(a)(2)

stand. We have jurisdiction pursuant to 28 U.S.C. § 1291, and

we affirm Salman’s convictions, concluding that the documents he presented to the IRS are unlawful fictitious financial

instruments under 18 U.S.C. § 514(a)(2). 

I

On November 5, 1998, the IRS received from Salman a

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1998 Payment Voucher 3, Form 1040-ES, a form used to

make a payment of estimated taxes for the 1998 tax year,

which indicated that Salman was paying $750,000 in estimated taxes. Along with the voucher, the IRS received a document labeled “SIGHT DRAFT” which included many

characteristics common to a check.1

On January 25, 1999, the IRS received from Salman a 1998

Payment Voucher 4, Form 1040-ES, a form also used to make

a payment of estimated taxes for the 1998 tax year, which

indicated that Salman was paying $250,000 in estimated

taxes. Along with the voucher, the IRS received a document

nearly identical to the one Salman sent in December 1998, but

for the amount of $250,000.2

On October 22, 2003, Salman was indicted on two counts

of passing a fictitious instrument, in violation of 18 U.S.C.

§ 514(a)(2). On April 7, 2004, a federal grand jury returned

a four-count superseding indictment, adding to the two counts

in the previous indictment two counts of attempting to interfere with the administration of the internal revenue laws, in

violation of 26 U.S.C. § 7212(a). 

On September 14, 2004, Salman’s jury trial commenced.

At the trial, Kristy Morgan, an IRS employee, testified to Salman’s past history of tax violations, stating that Salman owed

more than $4500 in taxes and $2000 in penalties. Ted

Reusser, a bank examiner from the Office of the Comptroller

of the Currency of the Department of the Treasury, testified

that “the Treasury doesn’t use sight drafts as a method of payment so there is no such instrument as a sight draft issued by

the Treasury.” The government asked Reusser to compare the

sight drafts to a common check. Reusser testified that the

words “NON-NEGOTIABLE” on the sight drafts meant that

“you can’t use it like a common check, you can’t take it to

1

See infra app. A. 

2

See infra app. B. 

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your bank, you can’t endorse it, you can’t move [it] around,

it should be negotiated between the parties on the document.”

Reusser also testified that even though the sight drafts had

features common to checks, they also lacked things associated

with checks, like a bank in the address line, a magnetic ink

routing number, special paper, and watermarks. He also noted

that none of these features were required for a check to be

valid. 

At the close of the government’s case, Salman made a Federal Rules of Criminal Procedure Rule 29 motion, arguing that

there was insufficient evidence of a fictitious obligation—the

government had not shown Salman’s intent to defraud or his

intent corruptly to impede or to interfere with the enforcement

of the internal revenue laws. The district court denied the

motion. 

Salman then called his friend, Pat Devore, who testified

that he and Salman designed the sight drafts “specifically so

they could not be considered as any one specific type of

instrument.” Devore testified that Salman and he had spent

“literally hundreds of hours” researching various aspects of

the work of Roger Elvick, including how to create a fictitious

sight draft. Devore testified that as Salman and Devore created the sight drafts, Devore questioned Elvick, in writing and

by phone, about the procedures he recommended. In a letter

to Elvick, Devore explained that he and Salman wanted to

ensure that if Salman was ever “dragged into court,” he would

be “laughing all the way to the bank.” 

On September 16, 2004, the jury found Salman guilty of all

four counts. On January 21, 2005, the district court entered

judgment, sentencing Salman to 12 months of imprisonment

on each count, to be served concurrently, and five years of

supervised release. Salman timely filed a notice of appeal

challenging the sufficiency of the evidence to support his convictions. 

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II

We review de novo the sufficiency of the evidence to support a conviction. United States v. Esquivel-Ortega, 484 F.3d

1221, 1224 (9th Cir. 2007). “There is sufficient evidence to

support a conviction if, viewing the evidence in the light most

favorable to the prosecution, any rational trier of fact could

have found the essential elements of the crime beyond a reasonable doubt.” United States v. Moreland, 509 F.3d 1201,

1216 (9th Cir. 2007) (internal quotation marks and citation

omitted). 

III

Counts I and II of the superseding indictment, based on the

$750,000 and $250,000 sight drafts, charged Salman with presenting fictitious instruments to the IRS in violation of 18

U.S.C. § 514(a)(2) (“§ 514”). The fictitious instrument statute

provides:

Whoever, with the intent to defraud . . . passes,

utters, presents, offers, brokers, issues, sells, or

attempts or causes the same, or with like intent possesses, within the United States . . . any false or fictitious instrument, document, or other item appearing,

representing, purporting, or contriving through

scheme or artifice, to be an actual security or other

financial instrument issued under the authority of the

United States, a foreign government, a State or other

political subdivision of the United States, or an organization, shall be guilty of a class B felony. 

18 U.S.C. § 514(a)(2). 

[1] In Howick, we interpreted § 514, determining that it

“was intended to criminalize a range of behavior not reached”

by the counterfeit statute, 18 U.S.C. § 472. 263 F.3d at

1066.We delineated the distinction as follows:

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A “counterfeit” obligation is a bogus document contrived to appear similar to an existing financial

instrument; a “fictitious” obligation is a bogus document contrived to appear to be a financial instrument, where there is in fact no such genuine

instrument, and where the fact of the genuine instrument’s nonexistence is presumably unknown by, and

not revealed to, the intended recipient of the document. 

Id. at 1067. Applying this distinction, we interpreted “fictitious instruments” to mean “nonexistent instruments,” and

concluded that § 514 requires verisimilitude, which demands

that the documents have the quality of appearing to be true or

real. Id. To meet its burden of proof under § 514, the government must show that the:

unlawful fictitious obligation . . . appears to be “actual” in the sense that it bears a family resemblance

to genuine financial instruments. The offending document must, in other words, include enough of the

various hallmarks and indicia of financial obligations

so as to appear to be within that class. The test, then,

is not whether the document is similar to any financial obligation in particular, but whether taken as a

whole it is apparently a member of the family of “actual . . . financial instrument[s]” in general. 

Id. at 1068 (alterations in original) (emphasis added). 

Salman contends that Howick precludes his convictions for

passing fictitious financial instruments in violation of § 514.

He offers three principal arguments to support this contention.

First, Salman argues that the IRS is not among the class of

victims that Congress intended to protect by enacting § 514.

Second, Salman contends that Howick requires that the fictitious instruments be negotiable to satisfy the intent to defraud

element of § 514, and that his sight drafts are clearly marked

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“NON-NEGOTIABLE.” Finally, Salman argues that the documents he sent to the IRS do not bear sufficient indicia or

hallmarks of financial obligations, and therefore are not

unlawful fictitious instruments under § 514. We reject Salman’s arguments, and uphold his convictions. We distinguish

Howick based on the type of financial obligations under

examination in that case, and hold that a rational jury could

have found beyond a reasonable doubt that the sight drafts

Salman submitted to the IRS were unlawful fictitious instruments under § 514. 

A

[2] Salman first challenges his convictions under § 514 by

arguing that the IRS is not among the class of victims Congress intended to protect by the fictitious instrument statute.

In support of this argument, Salman points to language in

Howick that states, “[B]y enacting section 514, Congress provided protection from fraud to a particularly vulnerable class

of victims.” 263 F.3d at 1068. This argument fails for two reasons. First, the plain language of the statute does not limit its

application to a particular class of victims. See 18 U.S.C.

§ 514; see also 142 Cong. Rec. S10155, S10183 (Sept. 10,

1996) (statement of Sen. D’Amato) (explaining the need for

the legislation, D’Amato detailed the story of a woman who

had fraudulently passed comptroller warrants to the IRS, and

had evaded prosecution because of the loopholes in the counterfeit statute). Second, Salman takes the language in our

Howick opinion out of context. In Howick, we emphasized the

particularly vulnerable class of victims to explain why we

were implementing a low threshold for what constituted a

credibly fictitious financial instrument, not to identify a limited class of protected victims. 263 F.3d at 1068 (Because

“those who regard fictitious obligations as genuine will likely

include persons of a rather credulous nature . . . the statute

criminalizes even bogus obligations that a prudent person

might upon consideration be unlikely to accept as genuine, so

long as those documents bear a family resemblance to actual

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financial obligations.”). The plain language of the statute and

our holding in Howick do not limit violations of § 514 to acts

committed against a particular class of victims. 

B

Next, Salman argues that because he marked his sight

drafts “NON-NEGOTIABLE,” they are disqualified from

“appearing, representing, purporting, or contriving . . . to be

an actual security or other financial instrument issued under

the authority of the United States,” 18 U.S.C. § 514(a). Salman contends that our Howick decision interpreted § 514 to

require that any false instrument be negotiable in order to

qualify as an unlawful fictitious obligation. We hold, however, that in Howick we focused on the negotiable nature of

the documents at issue solely because the false documents

there were negotiable Federal Reserve notes. Here, where the

documents at issue are nonnegotiable sight drafts, the “NONNEGOTIABLE” mark does not place them beyond the reach

of § 514.

[3] The plain language of the statute does not require that

fictitious financial instruments be negotiable to be unlawful.

See 18 U.S.C. § 514(a)(2). The statute requires only that a fictitious document appears, represents, purports or contrives

through scheme or artifice, “to be an actual security or other

financial instrument issued under the authority of the United

States, a foreign government, a State or other political subdivision of the United States, or an organization.” Id. In support

of his contention that the passing of nonnegotiable fictitious

instruments is not unlawful under § 514, Salman points to

then-Senator D’Amato’s comments, published in the Congressional Record, that the Financial Instruments Anti-Fraud

Act of 1995 makes it a violation of law to pass with the intent

to defraud “any items purporting to be negotiable instruments.” See 141 Cong. Rec. S9533-34 (June 19, 1995).

Because then-Senator D’Amato’s comments were made as an

introduction to his proposed bill, and not as an explanation of

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why § 514 excludes nonnegotiable instruments from its definition of fictitious obligations, they do not offer support for

limiting the scope of § 514 to include only negotiable instruments. Moreover, the purpose identified by then-Senator

D’Amato for the legislation—to “close[ ] a loophole in Federal counterfeiting law”—supports the broadest possible reading of “actual security or other financial instrument,” one that

would include both negotiable and nonnegotiable instruments.

Id. Under the plain language of the statute, Salman’s documents qualify as unlawful fictitious instruments under § 514

because they appear to be financial obligations—sight drafts

—issued under the authority of the United States. Because

these phony sight drafts on their face pose a capacity to

deceive, they come within the literal language and common

intendment of § 514’s prohibition.

Despite the plain language of the statute, Salman argues

that Howick prohibits nonnegotiable instruments from qualifying as unlawful fictitious documents under § 514. In Howick, we analyzed whether fraudulent Federal Reserve notes

were sufficiently credible to constitute fictitious obligations

under § 514. 263 F.3d at 1067. We defined the standard for

credibility to be “whether [when] taken as a whole [the document] is apparently a member of the family of ‘actual . . .

financial instrument[s]’ in general,” and acknowledged that

determining whether a document is sufficiently credible is “by

necessity an ad hoc analysis, for the range of possible financial obligations is limitless and so too, for that reason, is the

range of fictitious ones.” Id. at 1068. We then made several

references to the requirement that an instrument be negotiable

to be deemed credible under this standard. See id. (“No particular mark or characteristic is independently determinative

such that its presence or absence alone could resolve the question whether a document purports to be a negotiable instrument.”) (“To trigger liability, in other words, the document

need only credibly hold itself out as a negotiable instrument.”); Id. at 1069 (“The bills were also free of disqualifying

marks, such as, for example, a statement that the document is

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not negotiable.”). Salman argues that this requirement that a

fictitious instrument be negotiable extends beyond the facts of

Howick, which involved negotiable Federal Reserve notes, to

all cases under § 514, and precludes the prosecution of individuals who pass fictitious nonnegotiable instruments, no

matter how closely the fictitious instruments resemble genuine financial instruments. We decline to adopt Salman’s reading of Howick because it would unnecessarily limit the scope

of § 514, contrary to what Congress said in its statutory language, and would reopen a loophole in the counterfeit statute

that Congress purposely closed when it enacted § 514. 

Instead, Howick’s discussion of a negotiable requirement

reflects the type of fictitious instruments that were squarely at

issue in that case. Howick involved Federal Reserve notes of

$100,000,000 and $500,000,000. 263 F.3d at 1067. A Federal

Reserve note is a negotiable instrument—it can “pass from

hand to hand, either by delivery or indorsement, giving to

each successive recipient a right against the debtor.” THOMAS

E. HOLLAND, THE ELEMENTS OF JURISPRUDENCE 315-16 (13th ed.

1924). In order for the Federal Reserve notes in Howick to

have been sufficiently credible to constitute unlawful fictitious instruments under § 514, they must have been negotiable

financial instruments. As such, the class of financial instruments that the fictitious Federal Reserves notes in Howick had

to resemble were negotiable instruments. To the contrary, the

fictitious financial instruments passed by Salman were sight

drafts. Ted Reusser, a bank examiner with the Office of the

Comptroller of the Currency of the Department of the Treasury, testified at Salman’s trial that sight drafts are commonly

nonnegotiable and that labeling a sight draft nonnegotiable

does not render it invalid, but merely places “some limitations

on how [it] can be passed around if people play by the rules.”

3

3Nonnegotiable instruments are incapable of being transferred by

indorsement or delivery. BLACK’S LAW DICTIONARY 1082 (8th ed. 2004).

According to Reusser, “[a] draft is simply an order to pay, and by putting

the word sight in front of it just implies that you’re to pay that item on

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Therefore, a sight draft, unlike a Federal Reserve note, is not

necessarily a member of the negotiable class of financial

instruments, and a fictitious sight draft cannot be disqualified

from being an unlawful fictitious obligation under § 514

merely on the basis that it is a nonnegotiable instrument. Our

decision in Howick does not preclude prosecution of individuals, like Salman, who pass fictitious nonnegotiable instruments. The evil that Congress assessed and the scope of its

remedy cover fictitious, deceptive financial instruments,

whether or not they are in a class that is negotiable. For a fictitious negotiable instrument to have verisimilitude, it must

appear to be negotiable. However, it stands to reason that for

a fictitious nonnegotiable financial instrument, verisimilitude

will not require an appearance of negotiability. 

[4] We hold that the plain language of 18 U.S.C.

§ 514(a)(2) prohibits the passing of any false or fictitious

instrument—whether negotiable or nonnegotiable —that

appears, represents, purports, or contrives through scheme or

artifice, to be an actual security or other financial instrument.

Where, as is the case here, the fictitious instrument is representing an actual instrument that is nonnegotiable, the label

“NON-NEGOTIABLE” on the fictitious instrument is not a

disqualifying mark. 

C

Finally, Salman argues that the fraudulent sight drafts he

passed do not bear sufficient indicia or hallmarks of actual

financial obligations to be prohibited under § 514. In Howick,

we provided a nonexhaustive list of relevant attributes that

indicate the credibility of a fraudulent instrument: 

sight.” Reusser also testified that sight drafts are usually nonnegotiable

instruments: “They’re prearranged situations where two parties—two or

more parties have agreed to make payment between themselves, and it

could have conditions attached to it, or it could have other items which

would not meet the terms of negotiability.” 

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official seals; serial numbers; portraits of government buildings, officials, or statespersons; symbols

or mottos of the issuing nation or entity; official signatures; dates of issue; and statements to the effect

that the document shall serve as legal tender or shall

be redeemable for something of value. 

263 F.3d at 1068. Salman argues that none of these attributes

are found on his sight drafts, and that therefore his sight drafts

do not sufficiently resemble genuine financial documents to

be unlawful under § 514. 

[5] The nonexhaustive list provided in Howick, however,

focused on attributes found on negotiable instruments, and

Federal Reserve notes in particular, leaving out attributes typically found on other financial obligations, like checks. Salman’s sight drafts did not include official seals, mottos, or

watermarks, things typically found on, for example, checks

issued by the United States Treasury to individuals receiving

tax refunds. However, Reusser testified at Salman’s trial that

none of those features are requirements of a valid check.

Moreover, as an examination of Appendices A and B will disclose, Salman’s sight drafts did include (1) a pre-printed, 3-

line block of text that listed the “United States Treasury” and

an address; (2) a pre-printed, red-ink check number; (3) an

“Authorized Signature”; (3) pre-printed lines for a “Certified

Draft No.,” a “UCC Registration No.,” and a “Voucher No.”;

and (4) the phrase “TENDER-AT PAR (HJR-192).” Because

§ 514 “criminalizes even bogus obligations that a prudent person might upon consideration be unlikely to accept as genuine,” Howick, 263 F.3d at 1068, a rational jury could have

found beyond a reasonable doubt that Salman’s sight drafts

sufficiently resembled an actual financial obligation such that

they were unlawful under § 514. 

[6] Salman argues that the government failed to present

sufficient evidence to convict him of violating § 514 because

the government’s expert, Reusser, only testified regarding the

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hallmarks of checks, and did not testify as to the indicia of

sight drafts. Salman misunderstands the verisimilitude standard we articulated in Howick. A fictitious instrument need

not resemble a specific actual instrument. Instead, the test is

“whether taken as a whole it is apparently a member of the

family of ‘actual . . . financial instrument[s].’ ” 263 F.3d at

1068. The government was not required to present expert testimony regarding sight drafts to prove that Salman’s fictitious

instruments resembled the family of actual financial instruments. 

Moreover, the context in which the fictitious sight drafts

were presented is not wholly irrelevant. These were tendered

to the IRS with tax payment vouchers, contributing to the

impression that these financial instruments were making a

payment, and heightening their capacity to deceive. 

[7] We hold that Salman’s sight drafts bear sufficient indicia or hallmarks of actual financial obligations to be prohibited under § 514. 

IV

In conclusion, we hold that Salman’s sight drafts qualify as

unlawful fictitious financial instruments under 18 U.S.C.

§ 514(a)(2). We also reject Salman’s second argument on

appeal—that the government presented insufficient evidence

to support his convictions under 26 U.S.C. § 7212(a)—

because it relies entirely on Salman’s unsuccessful first argument. 

AFFIRMED.

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APPENDIX A

APPENDIX B

Social Security Numbers redacted from documents.

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