United States v. Edward Keith Howick
263 F.3d 1056, 2001 Cal. Daily Op. Serv. 7741, 2001 Daily Journal DAR 9593 (2001)
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Rule of Law:
A 'fictitious' financial instrument under 18 U.S.C. § 514 does not require similitude to an existing genuine obligation, but instead must bear a 'family resemblance' to the general class of financial instruments, even if a prudent person would not be deceived by it.
Facts:
- In 1999, a Customs Inspector in Anchorage, Alaska intercepted a Federal Express package sent from the Philippines addressed to Edward Howick in Montana.
- The package contained bogus financial instruments, including counterfeit gold and silver certificates, and fictitious Federal Reserve notes in denominations of $100 million and $500 million.
- A Secret Service agent disguised as a delivery driver delivered the package to Howick, who stated that he had been expecting it.
- A subsequent search of Howick's residence uncovered the documents from the package as well as other bogus obligations and materials related to currency manufacturing.
- Howick, a licensed attorney, claimed he possessed the instruments to authenticate them as part of a project to repatriate currency supposedly found in a decades-old U.S. military plane crash.
- Prior to receiving the package, Howick had been informed by the office of Senator Robert Bennett, after consultation with the Secret Service, that similar documents he possessed were likely phony.
- The fictitious notes contained many indicia of real currency, such as presidential portraits and official seals, but also had absurd features, including their massive denominations, being twice the size of normal currency, and being blank on one side.
- Howick sent a fax and an email to third parties referencing the $100 million and $500 million notes in an attempt to advance the goal of placing the bogus documents.
Procedural Posture:
- The United States charged Edward Howick in a three-count superseding indictment in the U.S. District Court for the District of Montana (trial court).
- The indictment included charges for possession of fictitious documents (§ 514) and possession and importation of counterfeit obligations (§ 472).
- Howick filed a pretrial motion to suppress evidence seized from his computers, which the district court denied.
- At the close of evidence, Howick moved for a judgment of acquittal on the importation count, on which the court reserved its ruling.
- A jury found Howick guilty on all three counts.
- Following the verdict, the district court issued an order denying Howick's motion for acquittal.
- Howick, as appellant, appealed his convictions to the United States Court of Appeals for the Ninth Circuit.
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Issue:
Does a document that purports to be a financial instrument, but is not a copy of any existing one, violate 18 U.S.C. § 514's prohibition on 'fictitious' obligations if it bears a general resemblance to actual financial instruments, even if it would not deceive a reasonably prudent person?
Opinions:
Majority - Berzon, Circuit Judge
Yes. A document violates 18 U.S.C. § 514 if it bears a family resemblance to the general class of actual financial instruments, even if it would not deceive a prudent person. The court distinguished between the standards for 'counterfeit' obligations under 18 U.S.C. § 472 and 'fictitious' obligations under § 514. Section 472 applies to forgeries of existing instruments and uses a 'similitude' test, requiring the document to be convincing enough to deceive an ordinary person. In contrast, § 514 was enacted to close a loophole for instruments that have no genuine counterpart. For these, a 'similitude' test is illogical, as there is no genuine article for comparison. Instead, the court established a 'verisimilitude' or 'family resemblance' test. An instrument is 'fictitious' if it appears 'actual' in the sense that it includes enough hallmarks of financial obligations (e.g., seals, portraits, serial numbers) to appear to be a member of the general class of such instruments. This less stringent standard is consistent with Congress's intent to protect more credulous victims from novel fraud schemes. Here, the $100 million and $500 million notes, despite their absurdities, contained sufficient indicia of genuine currency to meet this test.
Analysis:
This case of first impression establishes the definitive legal test for what constitutes a 'fictitious' obligation under 18 U.S.C. § 514 in the Ninth Circuit. By distinguishing the 'family resemblance' test for fictitious instruments from the stricter 'similitude' test for counterfeit ones, the court clarifies the scope of two key federal fraud statutes. This decision lowers the evidentiary burden for prosecutors under § 514, broadening the statute's reach to cover even crudely made or facially implausible documents, thereby extending legal protection to victims who may be particularly vulnerable or credulous.
