Fоur defendants, Dunlap, Romo, Roben, and Serna, were indicted for violations of 18 U.S.C. §§ 371 and 2314 (conspiracy to transport and transportation of counterfeit securities). The district court dismissed the indictment on the ground that the counterfeit department-store scrip being transported was not a “security” within the meaning of 18 U.S.C. §§ 2311 and 2314. The government, рursuant to 18 U.S.C. § 3731, appealed.
The only issue before us is whether the Broadway store’s scrip, if genuine, would be a “security” under 18 U.S.C. §§ 2311 and 2314. A forged or counterfeit security is a “security” under the statute.
The government asserts that these papers fall within the § 2311 definition 1 as either “evidence of indebtedness” or an instrument “commonly known as a security”.
The defendants argue that 18 U.S.C. § 2314 is a criminal statute and as such must be strictly construed. They also argue that, under any constructiоn, the scrip is not a security within the § 2311 definition.
Although the scrip has value, it is primarily a medium of limited exchange and is not еvidence of an obligation or a promise to pay money.
Broadway issues the scrip:
*1094 (1) When a customer returns merchandise without рroof of purchase;
(2) To Broadway charge account customers as a promotional deviсe;
(3) As change for merchandise or services purchased by scrip.
A statement on the face of the scrip says that it is not redeemable for cash. But the store is said to have an unwritten policy that if a customer is рersistent enough, the store will redeem scrip for cash.
The scrip is transferable and can be used without the bearer identifying himself. The Broadway stores circulate about $6,000,000 of scrip a year. In effect, the scrip is a form of private money.
Courts have been reluctant in criminal cases to expand what is “commonly known as a security” beyond the enumerated forms in § 2311. In
United States v. Canton,
The statute discloses no congressional intent to give a broad meaning to include all obligations on the part of the maker of a papеr to the holder. The government relies on
United States v. Speidel,
In
United States v. Jones,
“ * * * It is to be noted that ‘Securities’ is defined with great particularity and that except for ‘evidenсe of indebtedness’ each of the other documents listed in Section 2311 has a commercially-cognizablе referent. We therefore think it doubtful that Congress intended ‘evidence of indebtedness’ to be viewed as a catchall rubric embracing any and all writings, not otherwise specifically listed, which represent an obligation on thе part of the writer to do something for the holder. * *450 F.2d at 524 .
The court stated that to be a security an instrument must have valuе in itself. But it does not follow that anything having value is a security; the instrument must evidence indebtedness in the “usual commercial sense”. The court concluded:
“The term ‘evidence of indebtedness’ embraces only such documents as promissory notes which on their face establish a primary obligation to pay the holders thereof a sum of money. Since airline tickets do not establish a primary obligation to pay money they are not evidencеs of indebtedness * *450 F.2d at 525 .
We find unpersuasive the government’s argument that even if the statute is ambiguous the strict construction rule should not be applied because no one should be surprised that the transportation with fraudulent intent of fоrged and counterfeit scrip should be proscribed by law. The argument begs the question. No one is asking whether the dеfendant’s actions were illegal, but whether they constitute a specific federal offense. These defеndants may have violated one or more state laws, but that sort of speculation is not before us.
Criminal statutes are to be strictly construed.
Prussian v. United States,
Affirmed.
Notes
. “ ‘Securities’ includes any note, stock certificate, bond, debenture, check, draft, warrant, traveler’s check, letter of credit, warehouse receipt, negotiablе bill of lading, evidence of indebtedness, certificate of interest or participation in any profit-sharing аgreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate; certificate of interest in property, tangible or intangible; instrument or document in writing evidencing ownership of goods, wares, and merchandise, or transferring or assigning any right, title, or interest in or to goods, wares, and merchandise; or, in general, any instrument commonly known as a ‘security’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, warrant, or right to subscribe to or purchase any of the foregoing, or any forged, counterfeited, or spurious representation of any of the foregoing * 18 U.S.C. § 2311.