Chapter 17

OFFENSES AGAINST PROPERTY

Chapter 17 of S.1400 "Offenses Against Property" represents a simpler approach to the law than either Chapter 17 of the Brown Commission bill or Chapter 8 of S.1. The penalties imposed by S.1400 are generally equal to or lighter than those provided for by the Commission proposal or by the more complicated and redundant sections of S.1 for such crimes as Arson, Burglary, Robbery, etc. Insofar as the format and content of S.1400 are more representative of a "Common Law" approach to the subject matter, that bill is preferable in our opinion.

Mail Fraud

Both S.1 ($2-8D5) and S.1400 ($1734) continue the important protection of the public against fraudulent activities provided by the mail fraud statute (18 U.S.C. §1341) rather than replacing it with a weaker larceny statute as proposed by the Brown Commission (C. §1332, §1741). In this respect S.1 and S.1400 follow our earlier recommendations (Report, pp. 74-75) and the views of the Association's Special Committee on Consumer Affairs in its report "The Proposed New Federal Criminal Code and Consumer Protection," 27 Record of The Association of the Bar of the City of New York, 324 (1972). See also "Reform of the Federal Criminal Laws," Hearings Before the Subcommittee on Criminal Laws & Procedures, Senate Judiciary Committee, 92d Cong., 2d Sess., Part III(B), p. 1827-28 (1972): Report of the Committee on Federal Legislation, New York County Lawyers Association, Id. at 1398, 1399-1400; compare "Reform of the Federal Criminal Laws," Hearings Before the Subcommittee on Criminal Laws & Procedures, Senate Judiciary Committee, 93d Cong., 1st Sess., Part IX, p. 6481-6482 (1973). We accordingly prefer S.1 and S.1400 to the Commission bill on this point. The differences between the S.1 and S.1400 versions of the antifraud statute are minor, S.1 extending jurisdiction to cover acts "affecting" inter

state commerce, see Polish National Alliance v. NLRB, 322 U.S. 643 (1944). This would be desirable in order to include frauds such as those by auto repair shops preying on interstate travelers.

The provision of S.1 (§2-8D5) is also preferable to $1734 of S.1400 in that the former covers one who devises or engages

in a scheme to defraud . . ." while the latter covers one who . . . having devised a scheme or artifice to defraud . . . engages in conduct with intent to execute such schemes or artifice." The S.1 section directly and clearly covers one who has not devised the scheme but nonetheless engages in it, while in the S.1400 section both the devising and the execution of the scheme must be present to complete the crime.

The concept of multiple mailings being chargeable as only one offense when done as part of one scheme rather than being chargeable as separate counts, as under the present law, is another advantage of the S.1400 provision.

New Crimes

$1704 of the Commission bill, covering release of destructive forces, commented on without objection by this Committee, has been included in S.1 as §2-8B3 but has been omitted from S.1400. $1713 of the Commission bill covering breaking into or concealment within a vehicle, also commented on without objection by this Committee, has been overlooked in S.1 but is included by inference in S.1400 in §§1711 and 1712 (see §1714(d)). Section 1734 of the Commission bill covering theft of property lost, mislaid or delivered by mistake appears as §2-8D3(b)(4) of S.1 and is absent from S.1400.

Doubtful Crimes

Question has been raised by this Committee in its prior report as to the desirability of including various crimes in a Federal Criminal Code (Report, p. 73). Section 1733 of the Commission bill covering theft of services (§2-8D3(b)(8) of S.1), is such a

section as is §1735 of S.1400 (§2-8D7 of S.1), interference with a Security Interest, which seems redundant in that certain aspects of the crime are covered by the theft sections, $1731 of S.1400, §2-8D3 of S.1, and insofar as are not covered ought not to be.

The Securities Violations sections-$1761 of S.1400, $2-8F5 of S.1, and §1772 of the Commission bill merely incorporate by reference existing sections of other titles of the U.S. Code without setting forth any substantive matter respecting the crimes. In our earlier report (p. 82) we disapproved the automatic reduction in grade of all non-Title 18 crimes to misdemeanors (which the Brown Commission proposal and S.1400 effect). If our views are followed, we see no need whatever for the inclusion of these sections relating to securities violations in Title 18. This comment does not include $2-8E4 of S.1 which is the substantive crime of trafficking in specious securities and codifies existing law.

Consolidated Crimes

The theft sections-§1731 of S.1400, $1731 et seq. of the Commission bill and §2-8D3 of S.1-put all kinds of theft provisions in a central place and are desirable. Section 1741 of S.1400, §2-8E1 and $2-8E2 of S.1, and §1751 of the Commission bill are all-inclusive forgery and counterfeiting sections. The definitions of counterfeiting and forgery in §1744(b) and (c) of S.1400 draw a distinction between the two terms, a completely false item being a counterfeit and a partially false item being a forgery. S.1 §2-8E1 defines a counterfeit as a false governmental writing and $1751 of the Commission bill makes no distinction between forgery and counterfeiting except that it grades the crime more severely if the forged or counterfeited writing is an obligation or security of the United States. The Commission approach in $1751 seems preferable, as there seems no need for the proposed distinctions.

Theft of Records

The Brown Commission bill defines ($1732) "theft" and "receiving stolen property" as including any "government file,

record, document, or other government paper," with there being no requirement that the government record have any monetary value.

S.1400, $1731 provides:

"Theft"... "A person is guilty of an offense if he knowingly: (1) takes or exercises unauthorized control over; (2) makes an unauthorized use, disposition or transfer of property of another."

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There is federal jurisdiction over an offense described in this section if . . . the property is owned by, or is under the care, custody or control of the United States or is being produced, manufactured, constructed or stored for the United States."

"Property" is defined as including "intellectual property and information.”

"Section 1732-Receiving Stolen Property". "A person is guilty of an offense if he receives (stolen) property."

"Section 1742-Unauthorized Use of a Writing": "A person is guilty of an offense if with intent to . . . harm a government ... he knowingly possesses a writing which has been issued without authority."

"Section 1301-Obstructing a Government Function by Fraud": "A person is guilty of an offense if he intentionally obstructs, impairs or prevents a government function by defrauding the government in any manner."

S.1, §2-8D4 makes it a crime to receive stolen property and defines property as including "any government file, record, document or other government paper" taken without authorization from any government servant.

Prior to 1970 and the Pentagon papers case, theft was not considered to be a crime applicable to the dissemination by news media of government reports. That case demonstrates, however,

that these sections can be used to impose censorship through the threat of criminal sanctions. The Solicitor General advanced the argument in U.S. v. Washington Post (The Pentagon Papers) that the government's ownership rights in the Pentagon papers were similar to those of Mrs. Hemingway in a Hemingway manuscript -in effect asserting a common law proprietary interest in government reports.

S.1400 reflects this position by providing ($1731(d)(B)) that property includes, among other things, information owned, controlled or stored by the United States.

Under the theft and related sections in all of the bills, punishment is provided for the steps involved in publication of government reports (receipt, possession, etc.) regardless of content or of its effect on the welfare of the nation.

The receipt of government reports and their publication by the news media in the public interest must not be subject to the "chilling" effect of the threat of criminal prosecution merely because the government does not want the public to know what is in the government report. This is prior restraint long condemned by the Supreme Court (Near v. Minnesota, 283 U.S. 697). We believe that the provisions of these bills may go too far in the direction of imposing penalties on activities connected with the publication of governmental information. We also seriously question whether the boundaries of criminality in this area should be dealt with through concepts such as "theft" and "receipt of stolen property" rather than through special provisions tailored to the requirements of this sensitive area.