Opinion ID: 337716
Heading Depth: 1
Heading Rank: 3

Heading: the valuation problem

Text: 13 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. 14 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. 15 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). 16 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: 17 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. 18 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. 19 282 F.2d at 755 (footnote omitted). 20 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. 21 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. 22 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. 23 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. 24 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. 25 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: 26 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 was to prove the identity of the defendant as the perpetrator of the crime, or the ownership of the property. 27 284 F.2d at 408. 28 Wilson was followed in United States v. Horning, 409 F.2d 424 (4th Cir. 1969). In that case defendant was indicted under § 641 for stealing tools worth more than $100. The only competent evidence on value was the testimony of a pawnbroker who hocked the tools for $50. The government asked the court to infer from the commonly-known fact that the pawn value of goods is substantially below market value the fact that the tools were worth $100 or more. The court, relying on Wilson, declined this invitation. 29 In United States v. Thweatt, 140 U.S.App.D.C. 120, 433 F.2d 1226 (1970), a case involving the District of Columbia larceny statute, the court held that, where the only evidence on the value of stolen clothes was the purchase price four years previously and the testimony that a pawnbroker loaned $55 on the items, the government had failed to carry its burden of proving value in excess of $100: 30 When there is a possibility of convicting the defendant of either grand or petit larceny offenses which carry significantly different penalties and which are distinguished solely by the value of the property taken it is essential that the government introduce evidence of that value in order to give the jury a firm basis upon which it can render a verdict. 31 433 F.2d at 1233. 32 Accord, Boone v. United States, 296 A.2d 449 (D.C.Ct.App.1972) (jury can't speculate on value from appearance of stolen property). See also United States v. Thomas, 135 F.Supp. 662 (E.D.Pa.1955); United States v. Barker, 313 F.Supp. 987 (D.Del.1970); Carlson v. United States, 187 F.2d 366 (10th Cir. 1951); Cooper v. State, 43 Ala.App. 385, 191 So.2d 224, cert. denied, 280 Ala. 711, 191 So.2d 229 (1966); Johnson v. State, 102 So.2d 412 (Fla.Dist.Ct.App.1958); Price v. State, 165 Tex.Cr. 326, 308 S.W.2d 47 (1957). Compare Head v. Hargrave, 105 U.S. 45, 49-50, 26 L.Ed. 1028 (1881). 33 We conclude that there was insufficient evidence from which the jury could find that any of the several thefts that the government proved was of a record having a value in excess of $100. We do not approve the court's charge that the jury could determine the cost of gathering and producing the information or the market value in a thieves' market on the basis of (its) common knowledge and experience, and the reasonable inferences to be drawn from the evidence. No reasonable inferences of market value of property involved in any particular theft could be drawn from the evidence. Permitting juror speculation as to value in the absence of evidence was, for the reasons set forth in United States v. Wilson and the cases which have followed it, error. 34 We hold that the evidence does not support the felony convictions of DiGilio and Szwandrak under § 641. That defect does not, however, require us to set aside the jury verdicts. The proper course, assuming the verdicts are otherwise unexceptionable, is to remand for misdemeanor resentencing. See United States v. Ciongoli, supra, 358 F.2d at 441; United States v. Horning, supra, 409 F.2d at 426. And if the jury verdict of guilt is otherwise unexceptionable, the felony conspiracy sentences will also be vacated and the cases remanded for misdemeanor resentencing. We turn, then, to the remainder of the defendants' objections to the proceedings below.