United States v. Farraj
142 F.Supp. 2d 484 (2001)
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Rule of Law:
The interstate transmission of intangible property, such as a stolen confidential document in electronic form, constitutes the transportation of "goods, wares, or merchandise" within the meaning of the National Stolen Property Act, 18 U.S.C. § 2314.
Facts:
- In the summer of 2000, Said Farraj worked as a paralegal for the law firm Orrick, Harrington & Sutcliffe LLP ('Orrick').
- Orrick was representing plaintiffs in a class action tobacco case and had created a confidential, 400-page trial plan ('Trial Plan') containing litigation strategy.
- Access to the Trial Plan was restricted to certain Orrick employees.
- Said Farraj allegedly used the alias 'FlyGuyNYt' to email an 80-page excerpt of the stolen Trial Plan to the attorneys for the defendants in the tobacco case.
- In the email, Said Farraj offered to sell the entire Trial Plan.
- An undercover FBI agent, posing as a defense attorney, negotiated with Said via email to purchase the plan for $2 million.
- On July 21, 2000, Said's brother, Yeazid Farraj, met a second undercover FBI agent at a McDonald's in Manhattan to receive the payment and was subsequently arrested.
Procedural Posture:
- The United States government charged Said Farraj and Yeazid Farraj in a three-count indictment in the U.S. District Court for the Southern District of New York.
- Count two of the indictment charged Said Farraj with the interstate transportation of stolen property in violation of 18 U.S.C. § 2314.
- Before trial, defendant Said Farraj filed a motion to dismiss count two, arguing that an electronically transmitted document does not qualify as 'goods, wares, or merchandise' under the statute.
- Both defendants also filed motions for severance to be tried separately.
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Issue:
Does the interstate transmission of a stolen, confidential electronic document via email constitute the transportation of 'goods, wares, or merchandise' within the meaning of 18 U.S.C. § 2314?
Opinions:
Majority - Marrero, District Judge
Yes. The interstate transmission of a stolen, confidential electronic document constitutes the transportation of 'goods, wares, or merchandise' under 18 U.S.C. § 2314. The court reasoned that while penal statutes are to be construed strictly, they should not be given the narrowest possible meaning in disregard of legislative purpose. The phrase 'goods, wares, or merchandise' is a comprehensive term for personal property that is ordinarily a subject of commerce, and the Trial Plan, as valuable attorney work product, fits this description. The court rejected the argument that the statute is limited to tangible property, noting that Congress amended § 2314 to include the word 'transmits' to cover electronic wire transfers of money, as affirmed in cases like United States v. Gilboe. Citing United States v. Bottone, the court found it immaterial that a copy, rather than the original physical document, was transported, as the value lies in the information itself. Adopting the reasoning of United States v. Riggs, the court concluded that electronically stored information is transferable, accessible, and salable, bringing it within the statute's scope, and to hold otherwise 'would offend common sense.'
Analysis:
This decision is a significant early judicial interpretation extending a pre-digital era statute, the National Stolen Property Act, to cover crimes involving intangible electronic data. By holding that stolen electronic information can be considered 'goods,' the court established an important precedent for prosecuting the theft of intellectual property and other valuable digital assets in the internet age. This case demonstrates a flexible approach to statutory interpretation, ensuring that older laws remain relevant to address new forms of criminal conduct facilitated by technology. The ruling solidifies the legal principle that the value of the information, not its physical form, is the critical element in such prosecutions.
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