Source: http://openjurist.org/print/180632
Timestamp: 2013-12-12 09:49:06
Document Index: 395753873

Matched Legal Cases: ['§ 371', '§ 6411', '§ 3712', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 2314', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 641', '§ 2314', '§ 641', '§ 641']

538 F2d 972 United States v. 75-2218 Lupo 75-2219 Szwandrak 75-2220
538 F.2d 972
UNITED STATES of Americav.John DiGILIO et al., Appellant in No. 75-2218.Appeal of Harry LUPO, in No. 75-2219.Appeal of Peter SZWANDRAK, in No. 75-2220.
Nos. 75-2218-75-2220.
Argued April 8, 1976.Decided June 7, 1976.As Amended June 21, 1976.As Amended Aug. 4, 1976.Rehearing and Rehearing En Banc Denied July 19, 1976.Dissenting Opinion Aug. 10, 1976.
Richard A. Green, Rowley & Scott, Katherine L. Boland, on the brief, Washington, D. C., Seymour Margulies, Brigadier & Margulies, Robert Margulies, on the brief, Jersey City, N. J., for John DiGilio.
Frederick P. Hafetz, Goldman & Hafetz, New York City, for Harry Lupo.
Thomas S. Higgins, Asst. Federal Public Defender, D. N. J., Newark, N. J., for Peter Szwandrak.
Jonathan L. Goldstein, U. S. Atty., James A. Plaisted, Asst. U. S. Atty., Newark, N. J., for appellee.
Before CLARK,* Associate Justice, and GIBBONS and HUNTER, Circuit Judges.
These are consolidated appeals from judgments of conviction and sentence. Appellants John DiGilio (No. 75-2218), Harry Lupo (No. 75-2219) and Peter Szwandrak (No. 75-2220) were indicted, with three other persons not parties to this appeal for violations of 18 U.S.C. §§ 371 and 641. The indictment charged that the defendants conspired to defraud the United States (Count I), and converted to their own use "records of the United States; that is, photocopies of official files of the Federal Bureau of Investigation, of a value in excess of $100.00" (Count II). Two of the defendants, George Kuczynski and Irene Klimansky (now Irene Klimansky Kuczynski), pleaded guilty to the conspiracy count of the indictment and were severed from the trial. The Kuczynskis testified for the government at the trial of the four remaining defendants. One of the defendants, John Grillo, was acquitted at trial on both counts.
A jury found DiGilio, Lupo and Szwandrak guilty on both counts. The jury, however, found Lupo guilty only of theft of property of a value under $100. He was sentenced, therefore, in accordance with the proviso in the third paragraph of § 6411 on the substantive count, and in accordance with the second paragraph (misdemeanor) of § 3712 on the conspiracy count.3 DiGilio and Szwandrak received felony sentences on both the conspiracy and substantive counts.4 Each appellant contends that his conviction should be reversed because the conduct charged in the indictment and proved at trial was not a crime proscribed by § 641. Each defendant also urges that there were trial errors with respect to the court's charge and its rulings admitting and failing to suppress evidence, which warrant a new trial. Defendants DiGilio and Szwandrak contend that even if their judgments of conviction should be affirmed, they should be resentenced pursuant to the lower range of sanctions prescribed in the proviso to § 641. Finally, DiGilio argues that he should not have been tried at all because he was incompetent to stand trial. We conclude that defendants DiGilio and Szwandrak must be resentenced, but that prior to resentencing the district court must hold a hearing to determine (1) whether DiGilio was competent to stand trial throughout the proceedings in the district court and (2) whether he is competent to be resentenced.
The evidence at trial tended to show that from the fall of 1971 through the spring of 1972 DiGilio, acting first through Lupo and Szwandrak and later through Grillo, procured the unauthorized copying of documents in the FBI files. The documents which were copied related to an investigation of alleged criminal activity by DiGilio. The unauthorized copies were made by Irene Klimansky, a clerk-typist in the Newark, New Jersey office of the FBI, during her working hours and with government paper and copying equipment. The original records were returned by Klimansky to the proper files. She delivered the copies of the documents to her then-fiance, George Kuczynski. Kuczynski delivered the copies from time to time to DiGilio's intermediaries, who paid him from $25 to $100 for each delivery. On one occasion Kuczynski received a $200 payment, but this was not related to the delivery of any specific group of documents, and was described as a Christmas bonus. There were multiple deliveries of copies from Klimansky to Kuczynski. Kuczynski broke down some of the deliveries from Klimansky into smaller components, in an effort to get more money from DiGilio. Thus there were more deliveries from Kuczynski to DiGilio's intermediaries than from Klimansky to Kuczynski. The evidence did not connect a payment in excess of $100 to any particular delivery. Nor was there evidence that DiGilio arranged with Kuczynski for the delivery in installments of a previously identified group of documents or records. During the apparent life of the conspiracy, however, over $1000 was funneled to Kuczynski through DiGilio's intermediaries.
Most of the above-recited facts were stipulated by the defendants. In addition, Kuczynski's testimony at trial identified Szwandrak as the initial intermediary from DiGilio, and tended to incriminate DiGilio, Grillo and Lupo as conspirators, and DiGilio as the source of payments and the ultimate recipient of the contraband copies. Kuczynski testified that he passed on documents both to Szwandrak and to Grillo. The remainder of the government's case consisted of statements made to various FBI agents by Lupo and Szwandrak, to which more particular reference will be made in Parts IV and V of this opinion.
II. THE § 641 VIOLATION
The second count of the indictment charges that the defendants converted to their own use "records of the United States; that is, photocopies of official files of the Federal Bureau of Investigation . . . ." The statute under which they were indicted provides:
"Whoever . . . converts to his use or the use of another . . . any record, voucher, money, or thing of value of the United States . . . shall be fined . . . or imprisoned . . . ."The defendants urge that the facts set forth above do not fall within § 641, because that section does not apply where, as here, the government was not deprived of the use of the information contained in the records. They contend that unauthorized copies of government records are not themselves "records" within the meaning of the statute, and that the unauthorized transmission of information is not proscribed by § 641. They assert that at most, the government lost exclusive possession of the information contained in its confidential records, and that Congress never intended § 641, which is essentially a larceny statute, to protect the governmental interest in exclusive possession of information. Reminding this court of the celebrated cases of Anthony Russo and Daniel Ellsberg5 and, of more recent vintage, the Daniel Schorr affair,6 defendants argue that the government's expansive interpretation of § 641, if accepted, would pose serious, perhaps fatal, first amendment, vagueness and overbreadth problems.
The government, on the other hand, is of the view that the misappropriation of information falls within § 641's sanction. It places principal reliance on Judge Friendly's opinion in United States v. Bottone, 365 F.2d 389 (2d Cir.), cert. denied, 385 U.S. 974, 87 S.Ct. 514, 17 L.Ed.2d 437 (1966), holding that the microfilming of a scientific process with equipment owned by the thieves, and the asportation of those copies violated 18 U.S.C. § 2314.7 See also United States v. Seagraves, 265 F.2d 876 (3d Cir. 1959); United States v. Lester, 282 F.2d 750 (3d Cir. 1960), cert. denied, 364 U.S. 937, 81 S.Ct. 385, 5 L.Ed.2d 368 (1961).
It is not necessary to accept the government's thesis in its entirety to hold that in this case a § 641 violation was established. This case does not involve memorization of information contained in government records, or even copying by thieves by means of their own equipment. Irene Klimansky availed herself of several government resources in copying DiGilio's files, namely, government time, government equipment and government supplies.8 That she was not specifically authorized to make these copies does not alter their character as records of the government. A duplicate copy is a record for purposes of the statute, and duplicate copies belonging to the government were stolen. See United States v. Friedman, 445 F.2d 1076, 1087 (9th Cir. 1971); see also United States v. Rosner, 352 F.Supp. 915, 922 (S.D.N.Y.1922), modified, 485 F.2d 1213 (2d Cir. 1973).9
We do not, by resting upon the narrower ground that a technical larceny has been proved, intend to imply a rejection of the government's broader interpretation of § 641. In Chappell v. United States, 270 F.2d 274 (9th Cir. 1959), the Ninth Circuit refused to hold that misappropriation of an airman's labor to paint private houses during duty hours fell within the statute, because theft of labor or intangibles was not in the nature of a larceny offense. Compare Burnett v. United States, 222 F.2d 426 (6th Cir. 1955). Much can be said in favor of the government's argument that Chappell v. United States, supra, is inconsistent with the interpretation of § 641 by the Supreme Court in Morissette v. United States, 342 U.S. 246, 269 n. 28, 72 S.Ct. 240, 253, 96 L.Ed. 288 (1952):
"The history of § 641 demonstrates that it was to apply to acts which constituted larceny or embezzlement at common law and also acts which shade into those crimes but which, most strictly considered, might not be found to fit their fixed definitions."
But since there was an asportation of records owned by the United States we need not in this case decide whether appropriation of information alone falls within § 641.10 The statute gives fair warning that at a minimum, it proscribes all larceny-type offenses. The indictment charges such an offense, and the government proved such an offense.
We recognize that the Department of Justice probably would not have presented this case for indictment but for the informational content of the documents. A statute like § 641 which prohibits the theft of any government property of any kind does indeed, as the defendants observe, vest considerable discretion in the Department of Justice with respect to selective enforcement. The solution to that problem, however, would appear to be legislative. Cf. Edgar & Schmidt, The Espionage Statutes and Publication of Defense Information, 73 Colum.L.Rev. 929, 930 (1973). We may not rewrite the statute in order to substitute our own enforcement standards for those of the executive branch. See Newman v. United States, 127 U.S.App.D.C. 263, 382 F.2d 479 (1967). We therefore hold that on the law and the facts, the defendants were properly convicted under § 641.
III. THE VALUATION PROBLEM
In the 1948 revision of the criminal code, Congress consolidated several separate provisions treating the problem of theft from the United States. At the same time, it adopted a suggestion that the punishment provision of a preceding section be amended to make the offense punishable as a misdemeanor when the amount involved was small.11 The effect of the revision is to divide the statute, for purposes of sanctions, into felonies and misdemeanors.
Once it is established, however, that a person has wrongfully appropriated a government record or other thing of value as defined in § 641, the prima facie case of violation is complete. United States v. Ciongoli,358 F.2d 439, 441 (3d Cir. 1966). Proof that the value of the stolen property is in excess of $100 is an element of the offense if the felony sanction is to be imposed. See United States v. Ciongoli, supra; United States v. Wilson, 284 F.2d 407 (4th Cir. 1960); Cartwright v. United States, 146 F.2d 133 (5th Cir. 1944); Stevens v. United States,297 F.2d 664 (10th Cir. 1961) (per curiam); Churder v. United States, 387 F.2d 825 (8th Cir. 1968). Before it can be invoked the government bears the burden of proving beyond a reasonable doubt that the misappropriated property has the requisite value.
Section 641 defines "value" as "face, par, or market value, or cost price, either wholesale or retail, whichever is greater." Obviously, the stolen records had no "face" or "par" value. No evidence was introduced as to their "cost price." Thus we are concerned with market value. As a general rule, that value will be determined by market forces the price at which the minds of a willing buyer and a willing seller would meet. See generally Abbott v. United States, 239 F.2d 310, 313 (5th Cir. 1956). If no commercial market for particular contraband exists, value may be established by reference to a thieves' market. See Churder v. United States, supra, 387 F.2d at 833 (blank postal money orders); United States v. Ciongoli, supra, 358 F.2d at 441 (same); Jalbert v. United States, 375 F.2d 125 (5th Cir.), cert. denied, 389 U.S. 899, 88 S.Ct. 225, 19 L.Ed.2d 221 (1967).
While market value is thus usually determined by conventional market forces of some kind, this court in a related context under 18 U.S.C. § 2314 has recognized that there must be some flexibility with respect to methods of proof of value. United States v. Lester, supra, involved the valuation of geophysical maps not known to be traded on an open market. Nevertheless, there was expert testimony that the value of the maps exceeded $5000.12 This court accepted that proof as sufficient:
Of course in most instances market value is used because under ordinary circumstances it is easily ascertainable. But where an exceptional type of goods that has no market value is the subject matter of the indictment, any reasonable method may be employed to ascribe an equivalent monetary value to the items.
It would do violence to the purpose of the statute were the Justice Department able to take action against the transportation of one carload of, let us say, household goods worth $5,000 but have their hands tied by semantics when the transporting is of geophysical maps worth a sizable fortune.
282 F.2d at 755 (footnote omitted).
In this case the government introduced the following evidence bearing on the value of the stolen documents: Kuczynski testified that he delivered groups of documents to DiGilio on 25-35 separate occasions, and that he received $25-$100 for each delivery. He also testified that DiGilio had told him that some of the documents he delivered were good and some weren't, and that DiGilio asked for better ones. Regardless of the quality of the documents, DiGilio paid something for each delivery, but the size of any payment was related to DiGilio's assessment of their value to him. Altogether, the evidence showed that Kuczynski received a little over $1000 from DiGilio. This sum included a $200 Christmas "bonus".
The evidence also tended to show that there were many references and cross-references to other persons and files in the stolen documents. There was some testimony that these documents were being peddled around town, and that others besides DiGilio had been approached about purchasing them. There would appear to be sufficient evidence to sustain a finding that a thieves' market for the stolen records existed.
We are not persuaded, however, that proof of the existence of a thieves' market satisfied the government's burden of proof as to the value of the misappropriated records. For most tangible objects, some market exists, and proof of that fact alone is not enough to establish value in the market. Since there is no proof regarding exchange price in the thieves' market generally, evidence showing only the existence of that market is insufficient on the question of value for felony sentences under § 641. The felony sentences of DiGilio and Szwandrak can be sustained, if at all, only if the evidence showing what DiGilio paid Kuczynski is adequate to prove value in excess of $100.
Discounting the $200 Christmas gratuity, the sum of the evidence on value was that DiGilio paid Kuczynski about $1000 in exchange for the duplication and transmission of a series of packets of FBI records. Because the thefts occurred in installments, however, each of which would amount to a separate offense, the more-than-$100 figure cannot be attained simply by aggregating the values of all the documents taken.13 While the evidence showed that Kuczynski sold documents to DiGilio on 25-35 occasions, there is no evidence showing the number of times Klimansky actually copied and took them. That number would appear to be less than the number of sales, since Kuczynski testified that he sometimes broke groups of documents down into smaller packets. There is no evidence establishing that the value of any single document or group of documents taken, as opposed to sold, at any time exceeded $100.
Of course, the price DiGilio paid for each batch of documents he received is some evidence of value. Whether or not the records had any value to DiGilio, however, he paid not less than $25 per delivery. It is plain, then, that DiGilio was paying both for Kuczynski's services in arranging the thefts, and for the documents themselves. The government produced no evidence apportioning the transmittal price between the service, which was purchased, and documents, which were stolen.
The government would have us hold that because in the aggregate DiGilio paid over $1000, the jury could infer that at least one of the thefts was of records having a market value of over $100. The case law that has considered the issue of market value does not support the government's position. Judge Sobeloff's opinion in United States v. Wilson, 284 F.2d 407 (4th Cir. 1960), is perhaps the leading federal case. There the defendant was charged under § 641 with a single theft of 72 United States Army rifles. The prosecution introduced no evidence of value. The jury, having inspected the weapons, nevertheless convicted defendant of a felony, which required a finding that the weapons were worth more than $100 ($1.39 per weapon). The Fourth Circuit vacated the felony conviction, declining in the absence of any record evidence to take judicial notice that the guns were worth more than the statutory minimum. Nor would the court permit the jury to substitute speculation for hard evidence of value:
If a value of more than $100.00 had been proved along with the other elements of the crime, the sentence of 71/2 years would have been within permissible limits. The Government, however, failed to produce any evidence whatsoever as to the value of the stolen weapons. We are asked to take judicial notice that 72 rifles are worth more than $100.00, but we cannot on the basis of anything in the testimony form a judgment as to value for the purpose of supporting the greater penalty. Nor, in the absence of any proof of value, could the jury be permitted to speculate on this point merely from the appearance of the articles. A fact which distinguishes a violation punishable by imprisonment for not more than one year from a violation punishable by imprisonment for ten years cannot be permitted to rest upon conjecture or surmise. In order to sustain the imposition of the higher penalty, it was as incumbent upon the Government to prove a value in excess of $100.00 as it wa