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Counterfeiting - Bibliography

federal united cir obligations

Counterfeiting is one of the few crimes mentioned in the text of the Constitution, perhaps because "[t]he general power over currency . . . has always been an acknowledged attribute of sovereignty" (Legal Tender Cases, 79 U.S. 457, 545 (1870)). Congress quickly made use of its authority to prohibit counterfeiting; the Act of 30 April 1790 authorized the death penalty for counterfeiting U.S. securities (contemporary punishments include fines, forfeiture, and prison). Comprehensive federal regulation of counterfeiting, however, emerged only with the adoption of a national currency amid the economic turmoil of the Civil War. The act of 30 June 1864, as modified and extended, forms the backbone of the statutory scheme codified at 18 U.S.C. §§ 470–514.

An obligation or security is counterfeit if it "bears such a likeness or resemblance to any of the genuine obligations or securities issued under the authority of the United States as is calculated to deceive an honest, sensible and unsuspecting person of ordinary observation and care when dealing with a person supposed to be upright and honest" (United States v. Wethington, 141 F.3d 284, 287 (6th Cir. 1998)). The definition of counterfeit also includes objects such as slugs that can be used to procure goods and services from vending machines and other coin or currency activated devices (18 U.S.C. § 491).

Counterfeiting is similar to forgery, and both are covered in the same chapter of the United States Code. Courts sometimes use the terms interchangeably, but counterfeiting generally refers to "a crime based upon a preexisting genuine instrument," while forgery does not always "carry such presumption but indicates that there is a genuine or real obligor in existence whose obligation has been simulated" (Stinson v. United States, 316 F.2d 554, 555 (5th Cir. 1963); see also 18 U.S.C. § 513(c)). To the extent the distinction between these offenses could create confusion or suggest a gap in coverage, federal statutes prohibit the counterfeiting, forging, or false making of securities and obligations, as well as the creation of fictitious obligations (18 U.S.C. § 514).

Federal law prohibits counterfeiting or forging a wide variety of specific obligations, securities, and public records, ranging from currency and coins to postage stamps and meter stamps; state and private securities; lending agency notes and obligations; federal contractor bonds, contracts, and related records; visas and other entry documents; customs documents and letters patent; military passes and permits; money orders; court, department, and agency seals; and ship's papers and federal transportation requests. Related offenses include the counterfeiting or pirating of copyrights and trademarks (18 U.S.C. §§ 2318, 2320). The counterfeiting within the United States of foreign obligations, securities, bank notes, and postage stamps is a crime as well. In response to the widespread use of U.S. currency in other countries and the increasingly international scope of counterfeiting efforts, federal law also has a broad extraterritorial component that bars counterfeiting of U.S. obligations or securities even when such activities occur entirely outside the United States (18 U.S.C. § 470).

In addition to the crime of making counterfeits, federal law prohibits the distinct offenses of possessing, passing, uttering, and dealing in domestic or foreign counterfeit items with intent to defraud. Uttering is the crime of representing a counterfeit item as genuine (United States v. Heller, 625 F.2d 594, 598 (5th Cir. 1980)). Making, possessing, and dealing in the things used to make domestic or foreign counterfeits, with intent that they be so used, is also a crime.

Intent to defraud need not be directed at a specific person or entity; "a general intent that some innocent third party in the chain of distribution be defrauded" is sufficient (United States v. Mucciante, 21 F.3d 1228, 1235 (2d Cir. 1994)). Proof of intent against a claim of innocent possession usually comes from circumstantial evidence, such as a rapid series of passings, passing false bills at different establishments, the use of large counterfeit bills for small purchases rather than using the change from prior purchases, and the segregation of counterfeit bills from genuine bills (United States v. Armstrong, 16 F.3d 289, 292 (8th Cir. 1994)).

Not every counterfeiting offense requires intent to defraud. The mere possession of a counterfeit with intent to sell or otherwise use it is a crime (United States v. Parr, 716 F.2d 796, 808 (11th Cir. 1983)). Copying or reproducing all or part of an obligation or security of the United States is a crime regardless of intent (Boggs v. Bowron, 842 F. Supp. 542, 559–560 (D.D.C. 1993), aff'd 67 F.3d 972 (D.C. Cir. 1995)). Because there are sometimes good reasons to reproduce currency—for example, to illustrate news articles on monetary policy—Congress created limited exceptions to the blanket prohibition for certain purposes. Congress liberalized these exceptions after the Supreme Court found the "purpose" clause too narrow for the First Amendment (Regan v. Time, Inc., 468 U.S. 641 (1984); 18 U.S.C. § 504). Although these exceptions allow some versions of expressive counterfeiting, the U.S. Secret Service—which enforces the counterfeiting statutes—has applied the copying prohibition strictly against artists and satirists whose works call into question the integrity, value, or meaning of currency (Boggs v. Rubin, 161 F.3d 37 (D.C. Cir. 1998); Wagner v. Simon, 412 F. Supp. 426 (W.D.Mo. 1974), aff'd 534 F.2d 833 (8th Cir. 1976)).

Counterfeiting of federal obligations is generally a crime under state law as well as under federal law. State and federal governments have concurrent jurisdiction, states to protect their citizens against fraud, and the federal government to protect the integrity of the currency (United States v. Crawford, 657 F.2d 1041, 1046 n.6 (9th Cir. 1981); State v. McMurry, 907 P.2d 1084, 1086–1087 (Az. App. 1995)).

JOHN T. PARRY

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