United States District Court, N.D. Illinois, Eastern Division
October 4, 2004.
UNITED STATES OF AMERICA, Plaintiff,
ANDRE LEE and THEODORE LEE, Defendants.
The opinion of the court was delivered by: HARRY LEINENWEBER, District Judge
MEMORANDUM OPINION AND ORDER
On February 12, 2004, Defendants Andre Lee and Theodore Lee
(the "Defendants") were convicted of one count of conspiracy to
knowingly pass, possess or utter counterfeit checks of a private
organization, in violation of 18 U.S.C. §§ 513(a) and 371. The
Defendants were also each convicted of multiple counts of
knowingly passing, possessing or uttering counterfeit checks of a
private organization. The Defendants now each move for acquittal,
or for a new trial in the alternative. For the following reasons,
Defendants' motions are DENIED.
I. LEGAL STANDARD
In evaluating a motion for judgment of acquittal, the Seventh
Circuit has repeatedly stated the standard of review under FED.
R. CIV. P. 29(c) is the following: "Whether at the time of the
motion there was relevant evidence from which the jury could
reasonably find the defendant guilty beyond a reasonable doubt,
viewing the evidence in the light most favorable to the
government." See, e.g., United States v. Hagan, 913 F.2d 1278, 1281 (7th Cir.
1990). Relief under Rule 29(c) is appropriate where the relevant
evidence is insufficient to prove all of the elements of the
charged offense. See United States v. Beck, 615 F.2d 441, 448
(7th Cir. 1980). "Put another way, a jury verdict may be
overturned only `where the record contains no evidence,
regardless of how it is weighed, from which the jury could find
guilt beyond a reasonable doubt.'" United States v. Boyd, 1992 WL
70321 *1 (N.D. Ill. 1992) (quoting United States v. Bruun,
809 F.2d 397, 408 (7th Cir. 1987)).
In evaluating a motion for a new trial, FED. R. CIV. P. 33
provides that "the court on motion of a defendant may grant a new
trial to that defendant if required in the interest of justice."
However, a court may not reweigh the evidence and set aside the
verdict simply because it believes some other result would be
more reasonable. See United States v. Reed, 875 F.2d 107, 113
(7th Cir. 1989). Before a new trial can be granted, the evidence
must preponderate heavily against the verdict such that it would
be a miscarriage of justice to let the verdict stand Id.
18 U.S.C. § 513(a) prohibits an individual from making,
uttering or possessing a counterfeit security "of a State or
political subdivision therefor or of an organization, with intent
to deceive another person, organization or government."
Therefore, to meet the statutory requirements, the Government must show two
things: 1) the counterfeit security is "of" a state, political
subdivision, or organization; and (2) the counterfeiter intends
to use the security to deceive "another" person, organization or
government. 18 U.S.C. § 513(c) defines "organization" under the
statute to mean "a legal entity . . . which operates in or the
activities of which affect interstate or foreign commerce." In
short, the plain statutory language requires that two separate
organizations are involved: the organization counterfeited, and
the organization deceived.
Here, both Defendants challenge their convictions under the
theory that the Government failed to prove the required statutory
nexus to interstate commerce because it failed to establish that
the purported issuers of the falsified checks were real
companies. Defendants contend that since the Government failed to
prove that these companies even existed, the Government certainly
did not establish that these possibly fictitious companies
qualified as "a legal entity . . . which operates in or the
activities of which affect interstate commerce."
For support, Defendants cite United States v. Barone,
71 F.3d 1442, (9th Cir. 1994), a case in which the Ninth Circuit reversed
the conviction of a man who counterfeited the checks of defunct
shell companies. In Barone, the Ninth Circuit reasoned that since
the at-issue shell companies did not qualify as "organizations" because their "only effect on interstate commerce results from
the passage of its forged securities to a victim which operates
in interstate commerce." Id. at 1445.
The Government responds by contending that it did, in fact,
sufficiently prove the existence of the at-issue companies as
real entities operating in interstate commerce. At trial, Robert
Johnson testified as to the existence of the companies. Johnson
testified that when Andre Lee recruited him into the check
counterfeiting scheme, he told him that he got the checks from
"one of their friends that worked at a big company, maybe like
ComEd not ComEd, but I said that for an example and they
don't miss like, you know, eight or nine hundred dollars out, you
know." (Trial Transcript, p. 38). When questioned on
cross-examination regarding one entity, Johnson also testified
that he "did check on my own to see if" Prestige Electrical
Maintenance ("PEM") really existed, and concluded that it did,
albeit "not at that location" listed on the check. Id. p. 47.
Johnson then testified that he researched PEM using a "telephone
book" and "411." Id. When defense counsel followed up on
Johnson's answer by asking which phone book he located PEM in,
Johnson replied that it was an internet yellow pages. Id.
The Government also presents alternative grounds for upholding
Defendants' convictions. The Government notes that a check
constitutes a security "of" both the account holder and the bank
on which is drawn. See United States v. Wade, 266 F.3d 574 (6th Cir.
2001). Therefore, the Government correctly argues that if it
established that both the payee and victim bank were real
entities which affect interstate commerce, it met its statutory
burden. To establish the bank-bank link, the Government provided
the testimony of Gladys Blancas ("Blancas"), the Bank Protection
Coordinator for St. Paul Federal Savings Bank ("St. Paul"), a
bank which was victimized by Defendants' scheme. Blancas
testified that St. Paul bank was FDIC insured. (Trial Transcript,
p. 2). She also testified as to "the regular business process by
which the payroll checks passed by the defendants were determined
to be counterfeit." (Gov. Res. Br., p. 6). This process,
according to the Government's rendition of Blancas' testimony,
was as follows:
[T]he checks were cashed by the St. Paul Federal
Savings Bank; the checks were stamped with the teller
number and branch identification, the checks were
then forwarded to the payee banks, through the
Federal Reserve Board, and, finally, the checks were
returned with stamps or other markings from the payee
banks indicating that the checks were counterfeit.
Id. at 6-7.
The Court initially notes that Blancas did not directly testify
that the checks were forwarded to the payee banks "through the
Federal Reserve Board." Blancas did testify, however, that the
banks returned the checks unpaid, and that she contacted them to
find out why. Blancas' only testimony as to the Federal Reserve
System came when she confirmed that her bank was insured by the FDIC. Nevertheless, the Court agrees that Blancas' testimony, and
the accompanying checks which were submitted as exhibits, suffice
to establish that these banks were real entities: they evidently
stamped the counterfeited checks "refer to maker," and were
successfully contacted by Blancas.
The Government also contends that it provided evidence
regarding the interstate commerce requirement, arguing:
[A]s the government argued and the jury found, the
testimony of Gladys Blancas as well as the
counterfeit checks themselves, bearing the stamps of
the payee banks established that the payee banks
were involved in the regular business practice of
accepting checks drawn on accounts named thereon.
Those checks, if counterfeit or drawn on accounts
with insufficient funds, were sent back to St. Paul
Federal Savings Bank, the victim bank insured by the
FDIC. Thus, not only did the payee banks operate in
interstate commerce themselves, their activities
concerning the instant offense conduct affected
interstate commerce by affecting St. Paul Federal
Savings, an institution insured by the FDIC, to its
(Gov. Am. Resp. at 8-9). The Government also notes that
Defendants stipulated that the counterfeit checks at issue were
either not authorized by the payors corporations, or that the
checks named fictional payor corporations and accounts. (Gov. Am.
Res. At 10).
The Government cites United States v. Spinello, 265 F.3d 150
(3rd Cir. 2001), as further support of that the banks operated in
interstate commerce. While analyzing the federal statute
criminalizing bank robbery, the Third Circuit in Spinello noted that, "FDIC-insured banks are fundamental to the conduct of
interstate commerce," id. at 158, and further stated:
Congress itself recognized the connection between
interstate commerce and the federally-insured status
of banks when it concluded that interstate commerce
would be facilitated by a system of federal insurance
for the deposits of banks . . .
Id. at 157 (citations omitted). The Court concludes that the
Government produced sufficient evidence at trial to establish
that the entities operated in interstate commerce.
The Defendants assert one additional reason why the Court
should grant their motions. Defendants allege that the court
erred by not "submitting the interstate commerce issue to the
jury" in the jury instructions and for rejecting their proposed
instruction. (A. Lee Mot., p. 4; T. Lee Mot., p. 4-5). The Court
instructed the jury with regard to § 513(a) in pertinent part as
To sustain the charges, the government must prove the
following propositions, for each Count in the
First, that the defendants uttered or possessed a
counterfeit and forged security of an organization;
Second, that the defendants did so with the intent to
deceive another organization.
The Court further explained to the jury the meaning of the
following terms: intent to deceive, security, counterfeited,
forged, and organization. As to organization, the Court
The term `organization' means a legal entity, other
than a government, established or organized for any
purpose, and includes a corporation, company,
association, firm, partnership joint stock company, foundation,
institution, society, union, or any other association
of person which operates in or the activities of
which affect interstate commerce.
The Government, citing United States v. Wicks, 187 F.3d 426
(4th Cir. 1999), contends that the Court's jury instruction on §
513(a) was adequate and that the interstate commerce requirement
did not require a separate instruction. (Gov. Supp. Mem., p. 10).
In Wicks, the Fourth Circuit held that "[b]ecause the term
`organization' is a term of art that means an entity that
operates in or affects interstate commerce, the interstate
commerce element was charged adequately in the indictment through
the use of the term `organization.'" Wicks, 187 F.3d at 428.
Here, it is apparent that the Court included within the jury
instructions the interstate commerce issue when it instructed the
jury that an organization was an entity "which operates in or the
activities of which affect interstate commerce." Thus, the
instructions were not in error and the Court rejects the
Defendants' arguments to the contrary.
After a thorough review of the record, the Court concludes that
each element of the crimes charged, including the requirement
that the organizations were legal entities operating in
interstate commerce, were adequately supported by the evidence in
the record. Here, the Government has presented relevant evidence
in the form of testimony and the checks "from which the jury
could reasonably find the defendant[s] guilty beyond a reasonable doubt, viewing the
evidence in the light most favorable to the government." United
States v. Hagan, 913 F.2d 1278, 1281 (7th Cir. 1990).
Accordingly, the Defendants' motions for judgment of acquittal
The Court also concludes that the evidence presented by the
Government does not weigh heavily against the verdict such that
it would be a miscarriage of justice to let the verdict against
the Defendant stand See United States v. Beck, 615 F.2d 441, 448
(7th Cir. 1980). Accordingly, Defendants' motions for a new trial
are also DENIED.
For the foregoing reasons, Defendants' motions for a judgment
of acquittal or a new trial are DENIED.
IT IS SO ORDERED.
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