Opinion ID: 50703
Heading Depth: 4
Heading Rank: 1

Heading: Fictitious Obligations

Text: Here, the relevant portions of § 474 —— paragraphs six and seven —— make it a felony (1) to possess with the intent to sell “any obligation or other security made or executed, in whole or in part, after the similitude of any obligation or other security issued under the authority of the United States,” or (2) to “print[], photograph[], or in any other manner make[] or execute[] any engraving, photograph, print, or impression in the likeness of any such obligation or other security.” Section 475 prohibits the making, distribution, or use5 of any business or professional card, advertisement, or other similar documents6 “in the likeness or similitude of any obligation or security of the United States.” In support of their position, the Plaintiffs advance two separate but related arguments. They first contend that, as 18 5 Section 475 also criminalizes designing, engraving, printing, execution, uttering, issuing, and circulation. 6 These other similar documents include notices, placards, circulars, and handbills. 8 U.S.C. § 8 defines “obligation or other security” as “Federal Reserve notes . . . of whatever denomination, issued under any Act of Congress,” the hand-outs are not covered by §§ 474 or 475, because Congress has never authorized the printing, circulation, or issuance of a $1 million Federal Reserve note.7 We disagree. Sections 474 and 475 require that the hand-outs be in the likeness or similitude of any Federal Reserve note issued by Act of Congress. There is nothing in the statutory language, legislative history, or caselaw addressing these statutes that supports the conclusion that the use of a fictitious denomination alone is sufficient to render an instrument a per se non-likeness or non-similitude. Rather, we are convinced that this is at most one factor to be considered in making the requisite determination. Second, the Plaintiffs assert that the plain language and legislative history of 18 U.S.C. § 514 demonstrate that neither §§ 474 nor 475 cover Federal Reserve notes of fictitious denomination. Section 514 prohibits the printing, passing, possessing, or movement in interstate commerce of “any false or fictitious instrument, document, or other item appearing, representing, purporting, or contriving through scheme or 7 Emphasis added. 9 artifice, to be an actual security or other financial instrument issued under the authority of the United States,” with the intent to defraud. The Plaintiffs contend that, as § 514 covers “false or fictitious” representations of Federal Reserve notes, §§ 474 and 475 cannot also cover fictitious denominations without creating an overlap in criminal liability. The Plaintiffs would draw a distinction between “counterfeit” instruments, which are punishable under §§ 474 and 475, and “fictitious” instruments, which are punishable only under § 514. In aid of their proposed interpretation, the Plaintiffs proffer then-Senator Alfonse M. D’Amato’s introductory remarks to the Financial Instruments Anti-Fraud Act of 1995, which eventually led to the enactment of § 514.8 Senator D’Amato expressed his belief that a loophole existed under federal criminal counterfeiting law that prevented counterfeiting prosecutions involving fictitious instruments that were not counterfeits of any existing negotiable instrument. Section 514, according to Senator D’Amato, would close this loophole. Having considered this argument, we do not find the Plaintiffs’ contention persuasive. The fact that two criminal 8 141 Cong. Rec. S9533-34, quoted in United States v. Howick, 263 F.3d 1056, 1066-67 (9th Cir. 2001). 10 statutes may penalize similar conduct does not require a mandatory application of one to the exclusion of the other.9 Moreover, there is nothing in Senator D’Amato’s remarks that leads us to believe that Congress intended § 514 to preempt §§ 474’s and 475’s application to false Federal Reserve notes of fictitious denomination.