United States District Court, Eastern District of Illinois
December 19, 1974
UNITED STATES, OF AMERICA, PLAINTIFF,
JOHN G. SEAY, DEFENDANT.
The opinion of the court was delivered by: Foreman, District Judge:
MEMORANDUM AND ORDER
Defendant has waived trial by jury with the consent of the
Government pursuant to Rule 23(a), Federal Rules of Criminal
Procedure. This matter comes before the Court upon a stipulated
statement of facts. Defendant has filed a motion to dismiss the
indictment and a motion for judgment of acquittal. The
indictment charges him with violating 18 U.S.C. § 2314 in that
he caused to pass in interstate commerce a forged check payable
to the order of John Seay in the amount of $1883. drawn upon
the Southern Illinois National Bank and signed with the
fictitious name "Gerald Thomas" as drawer of the check.
The facts, as stipulated, in relevant part, are, as follows:
On June 27, 1972, the defendant used his official position as
an accounting officer of State Community College, East St.
Louis, Illinois, to cause a check to be signed by proper
college officials and drawn upon the State Community College
Revolving Fund Account, Auxiliary Services Fund at the First
National Bank, East St. Louis, Illinois, payable to "Arco Book
Dist." in the amount of $1743. (hereinafter "Check No. 1") This
check was not transported in interstate commerce. The next day
the defendant opened an account at Southern Illinois National
Bank in East St. Louis under the fictitious and assumed name of
Arco Book Distributors (hereinafter "Arco"), having a
fictitious address of 829 Missouri Avenue, East St. Louis,
Illinois. Gerald Thomas, the assumed and fictitious name used
by defendant, was the authorized signatory for this account.
The $200. initial deposit utilized to open this account was
John Seay's personal funds.
On June 29, 1972, defendant deposited Check No. 1 in the Arco
account at the Southern Illinois National Bank. The defendant,
using the assumed and fictitious name of Gerald Thomas,
endorsed the check at the time of the deposit.
On June 30, 1972, the Arco account had a balance of $1,893.
Later, on July 3, 1972, the defendant drafted a check,
(hereinafter "Check No. 2") payable to the order of John Seay
in the amount of $1,883. drawn on the Arco account at the
Southern Illinois National Bank, and defendant signed the
fictitious and assumed name of Gerald Thomas thereto as drawer
of the check. At the time Check No. 2 was drafted, there was a
balance of $1,893. in the Arco account at the Southern Illinois
National Bank. The defendant then deposited Check No. 2 in his
personal account at the Gateway National Bank in St. Louis,
Missouri. Shortly thereafter, Check No. 2 was transported from
St. Louis, Missouri to East St. Louis, Illinois in normal
On July 6, 1972, the Arco account at the Southern Illinois
National Bank was debited $1,883. leaving a balance of $10.
While $1,883. was debited from the account, no monies, funds or
credits debited from the account ever left the Southern
Illinois National Bank. The following day, the bank made a
reverse entry for the Arco account. The credit balance in the
account at the Southern Illinois National Bank was not less
than $1,884.55 from July 10, 1972 through August 4, 1972. On
August 4, 1972, the defendant made restitution of the funds by
executing a draft and voucher drawn
upon the Arco account, signed Arco Book Dist., Gerald Thomas,
John G. Seay, payable to William G. Matlack, a college
official, in the amount of $1743.
Check No. 2, the only check to pass in interstate commerce,
is the check which defendant is charged to have transported in
interstate commerce in violation of 18 U.S.C. § 2314.
At the outset it is also important to recognize what this
case is not. There is no indication that "Gerald Thomas" is an
"alias" or a name by which the defendant is regularly called.
See, e.g. Berry v. United States, 271 F.2d 775 (5th Cir. 1959).
Nor is there any indication that the defendant represented any
facts to the Gateway National Bank other than the information
on the face of the check.
Defendant is charged with causing to be transported in
interstate commerce a falsely made security. The Seventh
Circuit recently held that the words "falsely made" and
"forgery" as used in § 2314, are substantially synonymous.
United States v. Johnson, 504 F.2d 622 (7th Cir. 1974). See
also, Greathouse v. United States, 170 F.2d 512, 514 (4th Cir.
1948); Marteney v. United States, 216 F.2d 760, 763 (10th Cir.
There is a split of authority among the courts on this issue
and other courts have held that these two terms are not
synonymous. See, e.g. Stinson v. United States, 316 F.2d 554
(5th Cir. 1963); Pines v. United States, 123 F.2d 825 (8th Cir.
1941); United States v. Bales, 244 F. Supp. 166 (E.D.Tenn.
1965). Thus, cases following this view cannot serve as
precedent for the Government's position in this action.
The Court, of course, feels bound by the Seventh Circuit's
recent pronouncements in Johnson and hence the issue becomes
whether a check signed by the defendant with a fictitious name
as drawer constitutes a "forged" check.
In dealing with the issue of whether the signing of a
fictitious name constitutes a forgery, the decisions generally
fall into two different categories depending upon whether one
accepts the broad or narrow definition of that term. The
annotation at 49 A.L.R.2d 852, at 854 states, as follows:
"The generally accepted rule is that forgery may
be committed though the use of a fictitious name,
. . . . Under the broad definition, forgery may be
committed by the use of a fictitious name, to
defraud, so long as the instrument in question has
a sufficient appearance of validity upon its face
to enable it to be used to the prejudice of
another, while under the narrow definition, the
name signed to the instrument must purport to be
the signature of some person other than the one
actually signing it."
The "broad rule" was applied in Cunningham v. United States,
272 F.2d 791 (4th Cir. 1959), where the defendant signed a
fictitious name to a check as drawer, the Court held that
forgery was committed by signing the fictitious name with
intent to defraud where the check had sufficient appearance of
validity upon its face to enable it to be used to the prejudice
of another. The Eighth Circuit also has adopted the broad rule
by affirming a conviction where the defendant wrote the
fictitious name of a payee. Rowley v. United States,
191 F.2d 949 (8th Cir. 1951). See also Hall v. United States,
372 F.2d 603 (8th Cir. 1967).
In United States v. Greever, 116 F. Supp. 755 (D.D.C. 1953),
another case which adopted the broad rule, Chief Judge Laws
attempted to harmonize the "broad rule" and the "narrow rule"
on the basis of the rationale expressed in Reg. v. Martin
(1879), 14 Cox, Cr.Cas. 375, 5 Q.B.Div. 34. That latter case
held that where the payee in accepting the check has relied
upon and given credit to the person who presented the check and
not the signature itself, there may be fraud and false
pretenses, but there has been no forgery. It is only in a case
where reliance is placed upon the signature as creating a valid
obligation, not on the person who presents the check that
forgery has been committed.
Defendant places very strong reliance upon three cases which
he claims support the position that the signing of a fictitious
name does not constitute a forgery. Greathouse v. United
States, 170 F.2d 512 (4th Cir. 1948); Marteney v. United
States, 216 F.2d 760 (10th Cir. 1954); Gilbert v. United
States, 370 U.S. 650, 82 S.Ct. 1399, 8 L.Ed.2d 750 (1962).
In Greathouse, the defendant wrote several checks or bills of
exchange. Each was payable to the defendant and signed
"Woodruff Motor Sale, Inc., J.W. Greathouse". Greathouse was
the true name of the defendant. In a subsequent re-examination
of that decision, however, the Fourth Circuit noted:
"When we reversed Greathouse's conviction, it was
because, as we viewed the facts, the defendant had
merely misrepresented the extent of his authority
but had not used a false name. While such conduct
may well constitute a false pretense, subject to
state prosecution, it is not a forgery."
Cunningham, supra, 272 F.2d at 793-794.
Thus, the decision in Greathouse is based upon a
misrepresentation of authority and not upon the use of a
fictitious name and, therefore, can not be precedent for the
granting of defendant's motions in this case.
Marteney involved a warehouse receipt which falsely stated
that 60,000 bushels of yellow milo were received from C.M.
Henderson by the Garden Grain and Seed Company when, in fact,
the company did not receive any milo in store from C.M.
Henderson and the company on the relevant date was short such
grain in an amount exceeding 380,000 bushels. This case does
not really support the defendant's position. That Court noted,
"We haven't any doubt that an allegation charging
the unlawful interstate transportation of a
`falsely made, forged, altered, or counterfeited
security', purporting to be a warehouse receipt of
the Garden Grain and Seed Company, states an
offense in the words of Section 2314, and that a
sentence based upon a plea of guilty to an
indictment in those words would not be vulnerable
to collateral attack." (216 F.2d at 763).
The Marteney court, however, reversed the lower court's
decision and remanded the action for a hearing pursuant to
28 U.S.C. § 2255, only because of the wording of the charge, since
the particular charge in that case also alleged that the
receipt was falsely made because the issuing warehouse did not
have in storage the grain represented by the receipt. These
words, the court decided, were critically intended to describe
the nature of the document. "Plainly upon the face of the
charges, the warehouse receipts were actually what they
purported to be. Their falsity lies in the representation of
facts, not in the genuineness of execution." (216 F.2d at
In Gilbert, supra, the Supreme Court cited both the
Greathouse and the Marteney decisions. It noted that the cases
construing the words "forge" under the federal statutes have
generally drawn a distinction between false and fraudulent
statements and spurious or fictitious makings. The Court
concluded: "`Where the falsity lies in the representation of
facts, not in the genuiness of execution,' it is not forgery."
(370 U.S. at 658, 82 S.Ct. at 1404).
In the instant action, the Court believes that the falsity of
Check No. 2 lies in the genuineness of its execution. There was
no such corporation or individual as were listed as the drawer
of the check. Therefore, the check could not have been genuine
in its execution.
The Court concludes that the weight of authority and the
better reasoning support the "broad rule" that an instrument is
forged when it contains the name of a fictitious person as
drawer. See e.g., Hall v. United States, 372 F.2d 603 (8th Cir.
1967); Jones v. United States, 234 F.2d 812 (4th Cir. 1956);
Rowley v. United States, supra; Milton
v. United States, 71 App.D.C. 394, 110 F.2d 556 (1940); Buckner
v. Hudspeth, 105 F.2d 393, 395 (10th Cir. 1939); United States
v. Carney, 328 F. Supp. 960 (D.Del. 1971). See also, 49 A.L.R.2d
852; Delmar Bank of University City v. Fidelity Deposit Co. of
Md., 428 F.2d 32 (8th Cir. 1970); Ketchum v. United States,
327 F. Supp. 768 (D.Md. 1970).
There is a Seventh Circuit decision which has been cited as
favoring the "narrow rule". LaFever v. United States,
257 F.2d 271 (7th Cir. 1958). That decision is not completely clear
because there had been no hearing in the district court and the
pro se petition did not clearly delineate the factual
allegations. One of the two cases cited in that opinion,
moreover, stated: "And the signature of a fictitious name, with
fraudulent intent, is as much a forgery as if the name used was
that of an existing person. (citations omitted)." Greever,
supra, 116 F. Supp. at 756. Thus, it is not at all clear that
the Seventh Circuit by that opinion intended to adopt the
Accordingly, a check to which a fictitious name is affixed as
drawer with the intent to defraud is a forged check within the
meaning of § 2314.
Before the check can be determined to be a forged check, the
defendant must have had an intent to defraud at the time he
signed the fictitious name to the check. To commit the offense
with which he is charged, the defendant must also have had an
"unlawful or fraudulent intent" at the time he caused the check
to be transported in interstate commerce.
The Court will first examine the intent at the time the check
passed in interstate commerce. Defendant takes a very narrow
view and claims that as to Check No. 2, he had no fraudulent
intent, because there were sufficient funds in the drawee bank
to cover the check. Thus, by this check no one would be
This argument ignores the fact that the transportation of
Check No. 2 was part of a scheme to defraud the State Community
College. In a written statement the defendant admits "the whole
purpose of the aforementioned scheme was to fraudulently
convert funds of State Community College of East St. Louis,
Illinois to my own personal use". The transportation of this
check was an essential element in defendant's scheme to
defraud. After depositing the funds in the bank account of Arco
Book Company, defendant needed to transfer the funds to his
personal account to make the money available for his personal
use. Thus, Check No. 2 payable to John Seay was an integral
step to complete this attempt to defraud. Accordingly, it
cannot be said that the defendant's attempts to defraud the
State Community College ended with the deposit of Check No. 1
in the Southern Illinois Bank. In reality, the transportation
of Check No. 2 was an essential part of defendant's plan to
defraud the State Community College.
Defendant contends that the third paragraph of § 2314,
pursuant to which the Government is bringing this action, was
not intended to cover a scheme to clefraud such as the one in
this case. He points out that the second paragraph of §
2314,*fn1 which makes illegal certain
confidence game swindles, uses the language "scheme or artifice
to defraud", while the third paragraph uses only the more
general language "with unlawful or fraudulent intent".
Defendant, thus, seems to contend that since Congress did not
use the specific "scheme or artifice" language in the third
paragraph, it evidences a Congressional intent to make
punishable under the third paragraph only the transportation in
interstate commerce of forged checks where the specific check
was executed or forged with fraudulent intent. According to
this argument, the transportation of a check for which there
were sufficient funds on deposit would not constitute a
violation of the statute, even if the check was a part of a
scheme to defraud.
This argument, however, ignores the dates in which Congress
enacted the various paragraphs of § 2314. Congress enacted the
second paragraph of this section in 1956, while the third
paragraph with its more general language was adopted by
Congress at a much earlier time. Defendant's argument would
have much greater plausibility if the two paragraphs had been
enacted simultaneously. Since the second paragraph with the
more specific language was enacted after the third paragraph,
it is not fair to assume a congressional purpose to exclude
from offenses punishable under the third paragraph those
instances where a defendant causes a forged check to pass in
interstate commerce pursuant to a scheme to defraud merely
because in a subsequent adoption of another paragraph of the
section, Congress used the words "any scheme or artifice to
defraud, . . .".
Moreover, the same reasoning compels the conclusion that when
the defendant signed the fictitious name to the check, he had
the intent to defraud. This check was an essential part of
defendant's scheme to defraud the College and thus the signing
of the fictitious name was done with the intent to defraud.
Therefore, the Check No. 2 constitutes a forged check within
the meaning of § 2314.
The Court concludes that in adopting the third paragraph of
§ 2314 Congress intended to make illegal the acts committed by
Accordingly, defendant's motion to dismiss the indictment and
his motion for a judgment of acquittal are hereby denied.
The Court hereby finds and adjudges the defendant guilty as
charged. The Court also orders that a pre-sentence report and
investigation be conducted. Defendant shall report to the
United States Probation Office on or before December 27, 1974.