United States v. Frederick Schultz
333 F.3d 393, 2003 U.S. App. LEXIS 12834, 2003 WL 21459502 (2003)
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Rule of Law:
The National Stolen Property Act (NSPA) applies to property deemed "stolen" under a foreign nation's patrimony law, provided the foreign law unequivocally asserts true government ownership of such property, not merely export restrictions. A defendant cannot raise a mistake-of-law defense regarding the NSPA's applicability if the statute only requires knowledge that the goods were "stolen," and the defendant knew the facts making the goods stolen.
Facts:
- In 1983, Egypt enacted "Law 117," a patrimony law declaring all antiquities discovered after its enactment to be the property of the Egyptian government and prohibiting private ownership, possession, or trade without consent.
- In 1991, Frederick Schultz, a New York art dealer, met Jonathan Tokeley Parry (Parry), a British national, who showed Schultz a photograph of an ancient sculpture of Pharaoh Amenhotep III that Parry had smuggled out of Egypt.
- Schultz offered Parry a substantial fee to act as an agent for the sale of the Amenhotep sculpture, and they collaboratively created a false provenance for it, inventing the "Thomas Alcock Collection" and using fake 1920s labels to deceive potential buyers about its origin.
- After Schultz's initial attempts to sell the Amenhotep sculpture were unsuccessful, Parry sold it to Schultz for $800,000, and Schultz subsequently sold it to a private collector for $1.2 million in 1992.
- Parry and Schultz became partners, routinely smuggling Egyptian antiquities out of Egypt disguised as cheap souvenirs, assigning them false provenances, and restoring them with 1920s techniques for resale in the United States.
- In 1992, Parry and an Egyptian middle-man, Ah Farag (Farag), paid a bribe to corrupt Egyptian antiquities police officers to remove their names from police records and subsequently received a variety of antiquities from police possession, one of which Parry partially obliterated an Egyptian government registry number from.
- In June 1994, Parry was arrested in Great Britain and Farag in Egypt on charges related to dealing in stolen antiquities; Schultz was aware of these arrests but continued to communicate with Parry about new acquisition plans.
Procedural Posture:
- Frederick Schultz was indicted in the United States District Court for the Southern District of New York on one count of conspiring to receive stolen Egyptian antiquities, violating 18 U.S.C. § 371 (National Stolen Property Act).
- Schultz moved to dismiss the indictment, arguing that the antiquities were not "stolen" under the NSPA because they were not owned by anyone prior to being taken.
- The district court conducted an evidentiary hearing regarding Egyptian Law 117 and subsequently denied Schultz's motion to dismiss in a written memorandum and order.
- Schultz was tried before a jury in the district court, which found him guilty on the sole count of the indictment.
- Schultz was sentenced principally to a term of 33 months’ imprisonment.
- Schultz appealed his judgment of conviction to the United States Court of Appeals for the Second Circuit.
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Issue:
Does the National Stolen Property Act (NSPA) apply to property considered "stolen" under a foreign nation's patrimony law that vests true ownership of newly discovered antiquities in the government, even if the property was never in the government's actual physical possession?
Opinions:
Majority - MESKILL, Circuit Judge
Yes, the National Stolen Property Act (NSPA) applies to property considered "stolen" under a foreign nation's patrimony law that vests true ownership of newly discovered antiquities in the government. The NSPA's language, covering goods "stolen, unlawfully converted, or taken," is unambiguous and broadly construed, applying to any property taken without the owner's consent, regardless of whether the theft occurred in the United States or the owner is foreign. Egyptian Law 117 clearly establishes true governmental ownership of all antiquities found in Egypt after 1983, not merely export restrictions, a fact corroborated by the sworn testimony of Egyptian government officials who detailed its active enforcement, including seizure of newly discovered items and prosecution for internal trafficking. This interpretation aligns with the Fifth Circuit's reasoning in United States v. McClain, which required a clear declaration of national ownership for an item to be considered "stolen" under the NSPA, a standard met by Law 117. The court distinguished this from regulatory laws, such as the one in Long Cove, which did not assert a true possessory interest. Furthermore, the Cultural Property Implementation Act (CPIA) does not preempt or limit the NSPA's application, as its legislative history explicitly states it does not modify existing federal laws against receiving stolen property. The Supreme Court's decision in United States v. Turley established that "stolen" has no accepted common-law meaning and encompasses a broader class of felonious takings, thus rejecting Schultz's argument for a common-law definition. Regarding Schultz's defense, the district court correctly denied a mistake of U.S. law defense because the NSPA only requires knowledge that the goods were "stolen," not that the defendant knew his conduct was unlawful under U.S. law; Schultz's actions clearly demonstrated knowledge the items were illicitly obtained and moved. The conscious avoidance jury instruction, while not perfectly phrased, adequately conveyed that knowledge could be inferred if Schultz purposefully avoided learning about Egyptian ownership with a high probability of its existence and did not actually believe otherwise. Finally, the admission of testimony from other art professionals regarding their knowledge of Law 117 was not an abuse of discretion, as it was relevant to the plausibility of Schultz’s claim of ignorance given his extensive experience in the field and direct dealings with these individuals.
Analysis:
This case significantly clarifies and broadens the application of the National Stolen Property Act (NSPA), establishing that items are considered "stolen" under the NSPA if a foreign government asserts true ownership over them via a valid and enforced patrimony law. This ruling provides a robust legal framework for the United States to combat the illicit trade in cultural property, aligning U.S. law with international efforts to protect archaeological heritage. It underscores that art dealers and collectors must exercise heightened diligence regarding the provenance of foreign antiquities, as a "mistake of American law" defense will not shield them if they knowingly dealt in property demonstrably owned by another sovereign. The decision's reliance on judicial evaluation of foreign law’s intent and enforcement means that the nature and implementation of such laws will be critical in future NSPA prosecutions.
