Legal Document

458 U.S. 279 102 Supreme Court Reporter 3088 73 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 767 William Archie WILLIAMS, Petitionerv.UNITED STATES. Number 80-2116. Argued April 20, 1982. Decided June 29, Syllabus Title 18 Code KF62 § 1014 makes it a crime to "knowingly mak[e] any false statement or report," "willfully overvalu[e] land, property security," for the purpose of influencing action described financial institutions (including federally insured banks) "upon application, advance, . commitment, loan." Petitioner engaged in series transactions seemingly amounting case "check kiting" between his accounts banks, first drawing check far excess account balance one bank and depositing other, then reversing process accounts. was convicted Federal District violating 1014, Appeals affirmed. Held : Petitioner's conduct "bad checks" banks is not proscribed by 1014. Pp. 284-290. (a) actions did involve making "false statement." Technically speaking, factual assertion at all, therefore cannot be characterized as "true" "false." Similarly, petitioner's regarded "overvalu[ing]" security. In literal sense, face amounts checks were their "values." To interpret meaning that drawer has made "false" whenever he insufficient funds moment presented would "sligh[t] wording statute" versus Enmons, 410 396, 399, 93 1007, 1009, 35 379, render wide range unremarkable violative federal law. When enacted, necessary interdict deposit bad checks, fraudulent checking activities already addressed comprehensive fashion state 284-287. (b) The legislative history does support proposition designed have general application passing worthless demand statute read applicable anything other than representations connection with conventional loan related transactions. A narrow interpretation consistent usual approach lenity construction criminal statutes. 288-290. 639 Reporter, 2nd 1311 (C.A.5 1981), reversed remanded. Nickolas Pacific KF135 P2 Chilivis, Atlanta, Ga., petitioner. Richard G. Wilkins, Washington, D. C., respondent, pro hac vice, special leave Court. Justice BLACKMUN delivered opinion 1 this we must decide whether check" 2 * 1975, petitioner Williams purchased controlling interest Pelican State Bank Pelican, La., appointed himself president. bank's deposits Deposit Insurance Corporation. 3 Among services provided its customers time purchase access "dummy account," used cover drawn depositors who had individual Any such processed through dummy paid from assets. held until customer covered own account, which posted customer's credited accordingly. As president bank, enjoyed virtually unlimited use May 2, 1978, personal overdrafts amounted $58,055.44, approximately half total account. 4 On 8, examiners arrived an audit. That same day, embarked on kiting."1 He began opening $4,649.97 Winn Trust Company Winnfield, La. next drew new $58,500—a sum amount actually Bank—and deposited value check, deducting $58,055.44 previously been cleared At close business 9, then, $452.89 Bank. 5 10, wrote $60,000 account—again, balance—and immediately there, when payment 11. routinely 9 $58,500 12. 6 attempted $65,000 yet another institution, Sabine Many, Unfortunately, only $1,204.81. refused 17. 23, settled money order obtained proceeds real estate mortgage loan. 7 examiners, meanwhile, following considerable interest. Their scrutiny ultimately led indictment, Western Louisiana, two counts 1014.2 provision 8 report, willfully security, way [certain enumerated institutions, among them whose are Corporation], upon discount, purchase, agreement, repurchase ." under directed Bank, charged "did knowingly overvalue Corporation, advance extension credit." count identical language indict 10 App. 3-4.3 trial court jury "[a] security purposes Section 1014." explained "[t]he Government charges Mr. involved check-kiting—a scheme whereby credit exchange more banks." Id., 36. convict petitioner, continued, find each "the defendant make material fact," "influence[d] decision [bank] officers employees," intent influence extend defendant." 37-38. "The crucial question check-kiting," concluded, "is intended write could reasonably expect thereby defraud genuinely legitimate withdrawals against them." 38. both counts, sentenced six months' incarceration second count. For placed five years' probation, begin release confinement. 39.4 11 things, argued appeal indictment violation rejected contention, however, concluding "constitute classic incidents kiting." 1311, 1319 1981). line earlier Payne, 602 1215 1979), cert. denied, 445 903, 100 1079, 63 319 (1980), found statute. 12 We granted certiorari, limited Questions petition, resolve conflict concerning reach 1014.5 454 1030, 565, 70 473 1096, 668, 637 (1981). II 13 obtain conviction establish propositions: demonstrate (1) overvalue[d] security" (2) so "for [a institution] conclude convictions stand, because failed meet these burdens. Atlantic 14 Although several supported sufficient funds, course statement," simple reason: technically served direct drawee pay bearer, while committing good obligations if dishonored drafts. Each not, terms, representation balance. defined Uniform Commercial Code, U.L.A. 17 (1977), simply "a draft payable demand," 3-104(2)(b), "contain[s] unconditional promise certain money," 3-104(1)(b). such, engages dishonor notice protest will holder." 3-413(2), 424 (1977). also clear, itself operate assignment hands available payment, liable instrument accepts it." 3-409(1), 408 site unfortunate banking career, embraces verbatim definitions. See La.Rev.Stat.Ann. §§ 10:3-104, 10:3-409, 10:3-413 (West Supp.1982).6 15 similar reasons, Even assuming legally obligation; Louisiana law, attributable check. La.Rev.St.Ann., 10:3-409(1), 10:3-413(2) (West) (Supp.1981). 16 foregoing description concededly technical one, argues some force generally understood represent "currently check." Brief 19. F.2d, 1218. If presented, continues, effectively statement" recipient. While broader reading plausible, persuaded preferable one. It "slights statute," 379 (1973), for, noted, literally "statement" all. event, whatever understanding check's function, term that, common usage, often applied characterize checks." And, interpreting explicitly question, reluctant base expansive inferences subjective variable "understandings."7 Equally important, Government's surprisingly broad kiting, ruling wider implications: means give rise liability, defraud. Under Appeals' approach, pass number checks; presentation statement—that is, funds—to bank. acknowledged much oral argument. Tr. Oral Arg. 40. Indeed, stated single extended fraudulently.8 Yet, Congress really set out enact national law peculiar choice unusually backhanded manner. surely knew, Comment, Insufficient Funds Checks Criminal Area: Elements, Issues, Proposals, 38 Mo.L.Rev. 432 (1973). Absent "designed checks," Krown, 675 46, 50 (C.A.2 1982), prepared hold particular statute.9 B 19 1948 codification 62 Statutes-at-Large 683, reduced existing statutes, criminalized practices variety section. Historical Revision Notes. Of originally institutions,10 two—the Reconstruction Finance see 616(a) (1946 ed.), Reserve Banks, 596 ed.)—performed duties farm home loans, neither those organizations accepted private customers. Sabatino, 485 540, 548 1973), 415 948, 94 1469, 39 563 (1974); Edwards, 455 F.Supp. 1354, 1357 (M.D.Pa.1978). evident, statements" "overvalued property" added subtracted list over intervening years, no changes type provision. 20 amendments adding 1014's attracted little attention dealt summarily; point suggested should 1964, example, Congress, Pub.L.88-353, 5, 78 269, Credit Unions statutory list, barring statements willful overvaluations applications, like." S.Rep.No.1078, 88th Cong., Sess., (1964), U.S.Code Cong. & Admin.News Pages 2519, 2520. Thus, Senate Committee Banking Currency declared primarily apply borrowers agencies chartered organizations."11 4, 2522. 1970 amendments, state-chartered unions Pub.L.91-468, 7, 84 1017, "relating applications." H.R.Rep.No.91-1457, Page 21 (1970), 1970, 4166, 4187. amendment, Pub.L.91-609, 915, 1815, Home Loan Savings listing commercial checking.12 But there contemporaneous congressional recognition substantial expansion jurisdiction attend proscription checks. contrary, accompanying amendment addition "would describe provides penalties reports loans transactions." H.R.Rep.No.91-1556, (1970). H.R.Conf.Rep.No.91-1784, 66 5582, 5652. Congressional debate savings said "mak[e] submit data true granted." 116 Cong.Rec. 42633 (1970) (remarks Rep. Sullivan). 22 Given background—a unambiguous terms here fails evidence awareness statute's claimed scope, subject matter traditionally regulated law—we believe our emphasized " 'when readings what crime, appropriate, before choose harsher alternative, require spoken clear definite.' Bass, 404 336, 347, 92 515, 522, 30 488 (1971), quoting Universal C.I.T. Corp., 344 218, 221-222, 227, 229, 97 L.Ed. 260 (1952).13 sure, rule courts license disregard otherwise enactments. where "it explicit us lead conclusion put policing the" U.S., 411, S.Ct., 1015. 23 judgment reversed, remanded further proceedings opinion. 24 ordered. WHITE, whom BRENNAN joins, dissenting. 25 majority reverses grounds shown report" security." Ante, 284. According majority, statement; merely payee dishonor. 284-285. Like MARSHALL, N Dec. Immigration Nationality Decisions do disagree constitutes However, fact describes manner mean carry representations, purport contain all-inclusive definition 26 defies sense everyday practice maintain, does, carries drawer's No immediate reduce cash normal collection. respect knew contend arrangement thus $4,649.97, can fairly constitute statement. properly instructed indictment. 27 says Part II-A opinion—that show overvalued security—it unnecessary explore lenity. hand, conceive issue area long employ fiction entail Because appears me rest fiction, respectfully dissent. join MARSHALL's dissenting 28 THE CHIEF JUSTICE, BRENNAN, WHITE join, 29 after developing overly "definition" check—a come quite surprise businesses accept goods, services, check—concludes Williams' check-kiting ambiguous. applies version lenity, decides misapplies clearly prohibited statute, Before addressing conduct, think helpful forth here. This defendant, careless bookkeeping, funds. Nor containing good-faith intention business. Rather, involves conduct. intentional scheme. misled into honoring worthless, extending him credit. enabled "play float" misleading equally effect, able interest-free extensions Williams, president, nor he, credible argument unaware wrongful. With mind, turn 31 protect assets lending institutions. establishes proving [made] [any bank] (emphasis added). Just last Term, reiterated "[i]n determining scope look language. unambiguous, absence 'clearly expressed ordinarily conclusive.' Turkette, 452 576, 580, 101 2524, 2527, 69 246 (1981) (quoting Consumer Product Safety commission GTE Sylvania, Inc., 447 102, 108, 2051, 2056, 64 766 (1980)). my view, plain covers practiced nothing indicates exclude coverage 32 sweeping. numerous entities proscribes, disjunctive, deceptive schemes might impair stability Cf. Naftalin, 441 768, 774, 99 2077, 2082, 60 624 (1979) (disjunctive prohibitions "cover additional kinds illegalities prior sections"). refers broadly "any "any" expansive—it loan, change same, renewal, deferment otherwise, acceptance, release, substitution therefor." 33 evinces purpose—Congress hoped losses stemming misrepresentations mislead commitments, advances, loans. enough "to maintain vitality FDIC insurance program 'to all undertakings risk loss.' Pinto, 646 833, 838 (C.A.3) Stoddart, 574 1050, 1053 (CA10 1978), "cert. 816, 94, 85 (1981)). lend restrictive endorsed today. Culbert, 435 371, 98 1112, 55 349 (1978). 34 Nothing "suggests limit coverage" kind transaction. supra, 373, 1113. Check threatens precisely misrepresentation excluded specifically identify kiting name precise description. method recently Harrison PPG Industries, 446 578, 592, 1889, 1897, 525 (1980): "[I]t strange canon committee elsewhere deliberations obvious ascertaining cannot, Sherlock Holmes, pursue theory dog bark." 36 Court's comes dangerously Harrison. Unless fall within 37 recognizes, established proves elements: either security;" After recognizing this, majority's analysis jumps track. concludes presents kited knowledge conclusions withstands analysis. basis "simple": 'true' 'false.' too much: omissions failures disclose applications. Courts failure information needed avoid deception violates See, e.g., Greene, 578 648, 657 439 1133, 1056, 59 96 (1979). assume analysis, based contract principles. am loss why case. 40 'unconditional money,' ante, 285 3-104(1)(b), (1977)), unexceptionable conclusory "black-letter" oversimplified behind bare Moreover, inconsistent implications carries. "In giving impliedly represents equivalent KF105 F3 Whitney, Law Modern Practices 341 (2d ed. 1965).1 Despite equivocation point, undoubtedly understand implicit made.2 expectation banker cash. Regardless contractual breach person writes knowing 41 including today, interfere major portion conducted society with, of, (or, precisely, omission) n. supra. Therefore, stand. 42 43 intentionally obtaining credit, violated separate independent reason. represented exceeding $50,000, well worthless. doing, credit.3 rejection startling brevity "literal" legal completely ignores attributed world. 44 very essence successful overvaluation misleads issuing assumption valued face. assumes adequate drawn, value. 296-298; 1215, 1217-1218 1979). valuation instead inquires status waits clears paying collapse. course, prudent take precautions just inquire carefully accuracy collateral pledged always practicable. may where, here, presenting presumed know illegality, drastic adverse consequences possible bar prosecution places burden avoiding prosecution, seeks forbids seeking overvalue" overvalued" securities overvalued." Calandrella, 605 236 (C.A.6), denied sub nom. Kaye States, 444 991, 420 45 (3) 46 element violation—that form advance—is satisfied Clearly, whole purportedly collected, "advance," "loan," "commitment" ordinary terms. 1218 (check effect inducing advance); Street, 529 226, 229 (C.A.6 1976) "forced credit"); Judge White R. Summers, 558 1980); supra 1, 310, 451-452. 47 submitted reasons term, prohibition 1014.4 reason regard falling outside instructed, constituted representation" Contract 48 proscribes commonly referred kiting. given indications intend proscribe 2527. There history. (1964); 91st 5582. 49 finds indication brief review suggest primary prohibit fact, most transactions, compels ignore past, consistently narrowest limiting effectuate purpose. supra; (1979); Moore, 423 122, 335, 333 (1975). light protection accord broad, unrestricted embodied marvel today's utterly incompatible decisions arguments raised persons Rubin 449 424, 698, 633 (1981); decisions, looked determine evident written specific risks dangers deemed legislators sufficiently unacceptable warrant sanction, frustrate distorting employed accused "rule lenity." 51 contrast today interprets without acknowledging chosen Congress. error compounded address proscribe, generic disjunctive guilty—intentionally subjected them. Ignoring factors, begins employing oversimplified, "legal definition" observes never schemes. express statement, requires 52 prime example again entail: 53 favor strict inexorable command override magnified emphasis ambiguous word contradictory fair import remaining Gaskin, 320 527, 530, 318, 319, 88 287 'does distortion nullification legislation.' 'narrowest meaning'; words manifest lawmakers." Brown, 18, 25-26, 68 376, 379-380, 442 (1948) (quoted 588, 2531, 145, 346). 54 need parse affirmative "demand[ed] statute." 288. Holding reaches produce absurd result, internally contradictory, diverge policy. Congress' policy, throughout sanctions provide cause loss. results large loophole afforded formal decision, depends but rather concluded transaction "traditional" specified report. worth observing case, none justifications applying present. Huddleston 814, 831, 1262, 1271, 782 (1974), rooted concern rights, belief warning accorded punishable deprivation liberty property." attempt buttress arguing enforcement regulation, unjustified.5 Government, insurance, paramount safeguarding integrity unanimous holding mail wire fraud see, Giordano, 489 327 1973); Constant, 501 1284 1974), 910, 95 830, 840 (1975), apparently decisions. inroad jurisdiction. 56 adopted falls issue, created escapes unless specifies detail function society. interpreted result. explain adopts consequently turns head. Accordingly, explains, typically works follows: kiter opens nominal deposit. sum, $50,000. $50,000 deposit, B, gives baron During several-day period being collection grant pays original "By repeating scheme, variation it, time. advantage required transmittal, processing, different 12-13. with—and thereafter of—one misapplying 656. validity conviction, affirmed appeal, us. Neither expressly count, allege "presented caused equal truth [petitioner] W. Company, 3. Similar 4. sentence probation misapplication Sher, (C.A.3 pending, 81-1047 (holding kiting). 1982) (noting conflict). Unlike many statutes obviously particularly "common understanding" recognize implied act one's suggests value." plausible people clears, fragile foundation dissent fully respond point. opinion, like brief, emphasizes "conduct wrongful," post, 293, deals 294, 295, 299, 300, 300. seems "wrote business." Post, 292. Accepting theory, bring hope "advance" attempts suggesting absent defraud," 301, imposes requirement. And emphasize above, wished rests entirely "plain language" 293. 302, 305-306. true. even looks 296-298, best ambiguous, doubt public statements." These included Farmers' Crop Farm Administration, Mortgage National Agricultural Owners' 1026(a), 1514(a) ed.); 596, 981, 1122, 1123, 1138d(a), 1248, 1312, 1313, 1441(a), 1467(a) ed.). ambiguously seem others, employees named." Also Corporation themselves, Administrator Union Administration. 1815. somewhat surprising takes task noting applicability facile going contrary underlying prosecutions laws. laws defendant's demand, committed punished crime. 20; 28-29, 1965). problem stating "in terms" do. 285, 6. reasoning circular. do, ipse dixit totally discredits premised refuses theory. manufactures "confusion" difficult comprehend. 286, 7. Most irrelevant understandings" prosecuting present payment. correct, justified acted inconsistently understandings. "made [him] 37. judge "relates untrue known Hence, proof eventually pertinent initial intent, deceive bank." Ibid. acquit shared lenient unrealistic receive continued. property, Again, cast plainly institution. suggestion meant items temporary definition—it money, backed event default. Furthermore, evidenced provisions definitional section, "security." 2311. fears implications, 286-287, misguided. part violation. brought alter essential instructions banks. 212, 213 (loans gratuities offered officials; acceptance examiners); 493 (forging, counterfeiting, bonds obligations); 656 (theft 709 (1976 Supp.IV) (false advertising Corporation). sought program, Bush, 599 72, 75 1979); (C.A.3), (C.A.10 1978). Construing displace authority States. complements substantial. 586, 2530, (interpreting Racketeer Influenced Corrupt Organizations statute) ("[T]he remain free exercise police powers fullest constitutional extent defining crimes respective jurisdictions. [violations law], restriction administration justice States").

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