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United States v. Charles Ronald McElroy
Citations: 644 F.2d 274; 1981 U.S. App. LEXIS 19173Docket: 79-2516
Court: Court of Appeals for the Third Circuit; March 16, 1981; Federal Appellate Court
The National Stolen Property Act prohibits the interstate transportation of forged checks. The court determined that if a check is altered with an unauthorized signature during its interstate movement, the statute is violated, regardless of whether the alteration occurred before or after crossing state lines. The defendant, Charles Ronald McElroy, was indicted for transporting two forged checks from Youngstown, Ohio, to Pennsylvania (counts I and III) and for transporting a stolen automobile from Pennsylvania to Ohio (count II). The jury found him guilty on all counts, leading to concurrent sentences. The forged checks were stolen from a labor union in Youngstown and were drawn on a closed account. In October 1978, McElroy ordered a car in Pittsburgh, claiming he would pay with a credit union check, which was actually a forged check from the stolen batch. The car was delivered to him, but the bank later confirmed the account was closed, preventing the check's negotiation. In December 1978, he attempted a similar scheme to buy a boat and trailer, using another forged check from the same union account. Count II concerning the stolen car lacked direct evidence of its transport after leaving the dealer, leading to insufficient evidence for that charge, resulting in a directed acquittal. Testimony from an FBI agent established McElroy's residence in Ohio at the time of the offenses. The defense's sole issue is whether the interstate commerce requirement for federal jurisdiction under 18 U.S.C. § 2314 has been met, with no claims challenging its constitutional basis. The statute states that anyone who fraudulently transports forged securities in interstate commerce is subject to fines or imprisonment. The defendant argues that a conviction necessitates proof that the check was forged before crossing state lines, while the government contends that the violation is complete if the check is transported interstate, regardless of when the forgery occurred. The trial court supported the government’s view, allowing for the consideration of transportation within Pennsylvania as part of interstate commerce if it was a continuation of prior interstate movement. Case law generally supports that the interstate commerce requirement is fulfilled if a forged check travels interstate during the bank collection process, and the defendant need not physically transport the check; causing it to be transported through negotiation is adequate. Alternative proof methods exist, as illustrated by *Castle v. United States*, where the defendant forged money orders in Pennsylvania and cashed them in Texas, satisfying the interstate requirement without dispute. However, some courts have erroneously transformed this specific scenario into a broader doctrine, asserting that if a check was not collected via the interstate banking system, the prosecution must prove the forgery occurred before interstate transport. This misinterpretation was evident in *United States v. Owens*, where the court found no violation of § 2314 even though money orders were stolen across state lines, due to a lack of evidence showing transportation. In contrast, the current case includes testimony indicating the defendant's interstate travel from Ohio to Pennsylvania while possessing the checks, supporting the argument for federal jurisdiction under § 2314. The Owens opinion establishes that the government must demonstrate that money orders were forged in New Jersey before they can be considered as having been transported interstate. Several courts of appeals have interpreted this requirement similarly without questioning its validity, as seen in cases like United States v. Sparrow, United States v. Hilyer, and United States v. Lee. The discussion then shifts to the history and language of § 2314, which originates from the National Stolen Property Act aimed at federal-state cooperation to tackle crimes that exploit interstate commerce for escape from state law enforcement. The Supreme Court in United States v. Sheridan clarified that the Act's intent was to extend federal authority over such crimes, including the transportation of forged checks, emphasizing that this should not be viewed in isolation from other prohibited transportations. The wording of § 2314 does not specify that checks must be forged prior to interstate transportation, and the statute's intent is to address fraudulent activities that do not inherently pose a greater threat in interstate settings compared to intrastate. Legislative changes have not modified this interpretation; the interstate commerce aspect serves primarily jurisdictional purposes. Furthermore, the definition of interstate commerce includes actions that continue until the transaction's goal is fulfilled, meaning that movement can be recognized both before and after crossing state lines. The case United States v. Ajlouny exemplifies federal jurisdiction in situations where goods, although not yet leaving the U.S., are considered in foreign commerce under § 2314, reinforcing that Congress intended to encompass goods in transit across state or national borders. Federal jurisdiction persists after crossing state lines, as established in United States v. Tobin, 576 F.2d 687 (5th Cir. 1978), which interpreted 18 U.S.C. § 2315 regarding stolen goods in interstate commerce. The court determined that if the movement of stolen items within a destination state is viewed as a continuation of the out-of-state movement, jurisdiction is satisfied. This principle was supported in United States v. Garber, 626 F.2d 1144 (3d Cir. 1980), where a delay after arrival did not signify the goods had come to rest for jurisdiction under a related statute. Consequently, in the current case, the defendant's travel from Ohio to Pennsylvania constituted interstate commerce, with jurisdiction persisting until the completion of his business transactions in Pennsylvania. The defendant's argument claiming insufficient evidence for the transportation of forged checks was examined under the standard that requires sustaining the verdict if substantial evidence supports it. Testimony indicated the defendant's residency in Ohio, intentions to acquire a check from an Ohio credit union, and travel details, including using an Ohio-registered vehicle. The checks were confirmed stolen in Ohio, and no evidence suggested they were in Pennsylvania prior to the defendant's trips, rendering speculative claims insufficient to overturn the convictions. The court reaffirmed that the prosecution need not eliminate every reasonable hypothesis inconsistent with guilt, a position maintained since United States v. Allard, 240 F.2d 840 (3d Cir.). The circumstantial evidence did not undermine the verdict. The jury had the authority to determine that the defendant traveled from Ohio to Pennsylvania while carrying a forged check, either created in Ohio or Pennsylvania, before concluding the interstate journey. However, there was no direct or circumstantial evidence proving the defendant actually undertook this interstate trip. Consequently, the judgments on counts I and III are affirmed. Regarding the auto theft charge under 18 U.S.C. § 2312, the defendant was accused of stealing a vehicle by issuing a worthless check to Don Allen. The defense contested the sufficiency of evidence for proving that the automobile was transported in interstate commerce, as it was never documented to have been in Ohio. The court noted that the requirement for proving interstate transportation does not necessitate physical crossing of state lines by the defendant. However, the jury was instructed—without objection from the government—that they needed to find the car was driven across state lines for conviction. The court found insufficient evidence to support this instruction, as the automobile was not seen after leaving Don Allen’s lot, and there was no proof it entered Ohio. Although the jury could infer intent based on the defendant's residence, this was inadequate to establish actual transportation into Ohio. As the record lacked evidence to uphold the conviction under the given instruction, the charge under count II should not have been presented to the jury. This failure to object to the jury instruction precludes a retrial under correct instructions, leading to a mandated acquittal. Thus, the judgments on counts I and III are affirmed, while count II is vacated and remanded for a judgment of acquittal. Judge Adams concurs with the affirmance of the convictions for transporting forged checks but dissents regarding the reversal of the conviction under the Dyer Act. Three elements constitute the offense of interstate transportation of stolen motor vehicles under the Dyer Act: (1) the vehicle must be proven stolen, (2) the defendant must have transported it in interstate commerce, and (3) the defendant must have known it was stolen at the time of transport. There is no dispute regarding the first and third elements' sufficiency, as a vehicle purchased with a worthless check qualifies as 'stolen' under the Act. Possession of the vehicle allows for an inference of guilty knowledge, meaning that McElroy's possession when leaving the dealership implies he knew the car was stolen unless he provides an exculpatory explanation. The remaining question is whether the jury could reasonably infer that McElroy injected the stolen vehicle into interstate commerce. The prosecution is not required to prove that McElroy controlled the vehicle at the state line or that it physically crossed state boundaries; initiating an intended interstate journey suffices. While the majority finds insufficient evidence to show that McElroy intended to take the vehicle from Pennsylvania to Ohio, the dissent argues that the evidence supports the jury's verdict. McElroy had stated he lived in Ohio and intended to register the car there, and he used stolen checks from Ohio to pay for the vehicle. Furthermore, after acquiring the Corvette, he returned to Ohio and later traveled back to Pennsylvania for another transaction involving stolen checks. Though the evidence does not conclusively demonstrate that he drove the stolen vehicle into Ohio, it is sufficient for a jury to infer his intention to do so. The absence of evidence contradicting this intent bolsters the argument for the jury's decision. The trial judge's instructions may have misled the jury into believing they needed to confirm that the stolen vehicle crossed the Pennsylvania-Ohio border for a conviction. Although this interpretation of the Dyer Act likely favored the defendant, the government's failure to object in a timely manner complicates its ability to contest the instruction. Despite this, the dissent argues that the jury's conclusion that McElroy transported the stolen vehicle into Ohio suffices to demonstrate an interstate journey, satisfying the interstate transportation requirement of the Dyer Act. Therefore, the dissenting judge would uphold the jury's verdict against McElroy. The dissenting judge concurs with the majority's decision to vacate McElroy's conviction on Count II but disagrees with the affirmation of convictions on Counts I and III. A critical aspect of the case involves clarifying the requirements for a conviction under 18 U.S.C. § 2314. The statute prohibits the transportation of forged instruments in interstate commerce, but the majority holds that the checks do not need to be forged at the time they cross state lines. This view diverges from a recent Tenth Circuit ruling, which required proof of forgery prior to crossing state lines. The dissent agrees with the majority's interpretation that checks can be forged at any point during their interstate transport. However, the dissent criticizes the majority for not adequately addressing whether McElroy was the one who transported the checks from Ohio to Pennsylvania, which is also a necessary element for a conviction under § 2314. As such, the dissent implies that the majority's analysis is incomplete and warrants further scrutiny. The judge recognizes that judicial interpretations of § 2314's interstate requirement have developed along two distinct lines, suggesting a complex legal landscape that needs further consideration. Cases establishing interstate commerce involving checks typically fall into two categories: the first involves checks negotiated in one state and presented in another, as exemplified by United States v. Newson, where the act of negotiation itself triggers interstate commerce through the check clearance process, even if the defendant did not physically transport the check. The second category includes cases where the defendant directly transported the check between states, as seen in United States v. Lewis and United States v. Sparrow. In the current case, however, neither negotiation nor physical transportation of checks is substantiated. The checks in question were not deposited by the dealers after receipt, indicating they were never negotiated and thus did not engage in interstate commerce. Furthermore, there is no evidence that McElroy transported the checks from Ohio to Pennsylvania; it remains unclear how he came to possess them in Pennsylvania. The evidence is insufficient for a jury to conclude beyond a reasonable doubt that McElroy transported the checks, as the record shows he likely never left Pennsylvania. McElroy’s ambiguous statements regarding his location and intentions do not provide a reasonable basis for inferring that he was in Ohio when he claimed. Insufficient evidence has been found to support McElroy's convictions on Counts I and III, leading to a recommendation to vacate the judgments and enter acquittals. Under the principles of double jeopardy, once a conviction is vacated due to insufficient evidence, retrial is barred, regardless of any erroneous evidentiary rulings by the district court. Citing Burks v. United States and Hudson v. State of Louisiana, it is emphasized that the reviewing court's determination of evidence sufficiency holds the same weight as a trial court's ruling. Furthermore, if the district court had acquitted McElroy, the government would be unable to appeal that decision despite any errors in evidence exclusion. The focus must be on the evidence admitted at trial, which is deemed insufficient, warranting a judgment of acquittal. Judge Higginbotham concurs with the majority’s decision to vacate the conviction and acquit on Count Two but dissents regarding Counts One and Three, advocating for the interpretation of 18 U.S.C. § 2314 as requiring proof that the security was forged or altered during interstate transport. This interpretation, supported by precedent, asserts that criminal statutes must be strictly construed, and any ambiguities should favor leniency. The government acknowledged during oral arguments that the statute necessitates the check's forged state at the time of interstate passage. The majority's interpretation of the National Stolen Property Act aims to subject operators of false securities to federal jurisdiction similar to those dealing in stolen goods. While it is acknowledged that the government has the power to prosecute McElroy under the Act, the specific section under which he was indicted may not apply to his actions. Section 2314 criminalizes the transportation of forged checks across state lines; however, ambiguity exists regarding whether the statute applies to checks forged after transportation. The majority’s interpretation allows for prosecution even if the check was initially unforged, which is debated as not being the most straightforward reading of the law. The distinction with § 2315, which addresses receiving or storing forged securities, is noted as it requires a broader interpretation that does not apply to § 2314. Given the principle of lenity in criminal statutes, a forged check should be understood to require movement across state lines as a forged instrument. The judge's instructions on Counts One and Three were deemed improper. On retrial, evidence suggests that Count Three could support a jury inference of forgery occurring before entering Pennsylvania, thus retrial is permissible and does not violate the Double Jeopardy Clause. Conversely, Count One likely lacks sufficient evidence for a jury to conclude that forgery occurred prior to interstate movement, although the absence of evidence stems from an objection sustained by the court. Therefore, retrial for Count One is also permissible under the Double Jeopardy Clause. The significance of the title-wide definition of interstate commerce in 18 U.S.C. § 10 has not been thoroughly analyzed by courts or commentators. Courts have focused on the definition concerning specific offenses, while commentators have speculated on Congress's potential scope rather than its actual reach. A specific case, United States v. Wilson, established that acquiring a vehicle in a particular manner qualifies it as "stolen" under the Dyer Act. The majority opinion assumes that evidence of forged checks from Ohio found in Pennsylvania satisfies the forgery element without needing to prove transportation. However, the opinion suggests that the "transporting" aspect is implicit within the "forgery" element, which raises questions about the sufficiency of evidence regarding interstate transportation. The district court's instructions allowed the jury to conclude that the interstate commerce requirement could be met if the checks were drawn in Ohio and found in Pennsylvania, without evidence of actual transportation from Ohio. The court's charge indicated that movement within Pennsylvania could be considered part of interstate commerce if it continued from an out-of-state origin, but it stipulated that the government must prove the defendant transported the checks in interstate commerce, without needing to establish the specific starting point in Ohio. The last paragraph of the charge aligns more closely with the author's position than with the majority's stance, but when considered alongside earlier instructions, the charge lacks clarity. Notably, it does not explicitly state that McElroy was required to transport the checks himself from Ohio to Pennsylvania. Importantly, McElroy was not indicted for transporting checks from Pennsylvania to Ohio, as the indictments specifically state he "caused to be transported" from Ohio to Pennsylvania. The indictments also use conjunctive phrasing, which necessitates that the government prove both that McElroy transported and caused the forged checks to be transported in interstate commerce. The indictments allege that McElroy, with unlawful intent, transported and caused to be transported a forged security from Youngstown, Ohio, to Pennsylvania. The author acknowledges a disagreement with the majority regarding the evidence but notes that the Supreme Court's rulings in Hudson v. State of Louisiana and Burks v. United States do not prevent retrial, as those cases pertain to reversals due to insufficient proof when the state had a fair opportunity to present its case, which was not the situation here.