Forged Securities—10th Circuit Court of Appeals

A recent 10th Circuit Court of Appeals decision, United States v. Hunt,^[1] shows just how important it is that charges are brought under the correct statute.

In Hunt, the defendant, Gregory Hunt, was “indicted on 65 counts of securities forgery and 41 counts of money laundering, based on a series of checks he wrote transferring more than $2 million from his employer’s bank accounts to private accounts under his control.”^[2] He was convicted on all 106 counts, and he was sentenced to serve 63 months in prison and to pay millions of dollars in restitution and forfeiture.^[3]

Despite purchasing a boat, altering carbon duplicates of checks to make it appear they had been written to a different payee, fabricating documents, and attempting to bribe a witness, Mr. Hunt, the 10th Circuit Court of Appeals has held, “did not utter ‘forged’ securities within the meaning of 18 U.S.C. § 513(a), the statute under which he was charged.^[4]

This is because “he signed the checks under his own true name, and the instruments explicitly and accurately identified him as an ‘authorized agent’ of his employer.”^[5]

Mr. Hunt’s case “therefore turn[ed] on whether a check written by an agent with check-writing authority, and signed by the agent using his own name, qualifies as ‘forged’ under § 513 because the agent exceeded the bounds of his contractual authority with the principal.”^[6] If the defendant did not violate the forgery statute, the entire conviction must be reversed because the money laundering charges rely on the underlying criminal activity.^[7]

Section 513(a) states that it is a crime for a person to make, utter, or possess a forged security of an organization, with intent to deceive another person or organization.^[8] “Forged” is defined by statute as “a document that purports to be genuine but is not because it has been falsely altered, completed, signed, or endorsed, or contains a false addition thereto or insertion therein, or is a combination of parts of two or more denuine documents.”^[9]

The government argued that Mr. Hunt falsely “completed” the checks “because he was not authorized by the … Board of Directors to write the checks” to himself.^[10] They conceded, however, that “[t]here is nothing false about the ‘content’ of any of the 65 checks,” but reiterated that “[t]he checks could not have been genuinely executed because they reflected no legitimate payment.”^[11]

However, since the government’s definition does not comport with the common-law definition of “forged,”^[12] with the statutory definition,^[13] or with Congress’s intent,^[14] the Court of Appeals reversed the conviction, even though it found it repugnant to do so.^[15]

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[1] United States v. Hunt, No. 05-6023 (10th Cir. 2005).
[2] Id. at 2.
[3] Id.
[4] Id.
[5] Id.
[6] Id. at 9.
[7] Id.
[8] Id.
[9] Id.
[10] Id. at 10.
[11] Id.
[12] Id. at 20.
[13] Id. at 27.
[14] Id. at 30.
[15] Id. at 30-31.