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Court of Appeals for the Third Circuit • 1981

United States v. McGovern

661 F.2d 27

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Takeaway

In short, a traveler’s-check purchaser cannot authorize an imposter to sign and cash the checks contrary to the purchase agreement; doing so with fraudulent intent constitutes forgery under § 2314.

Background

McGovern owed Scull $1,800. To obtain money and shift the resulting loss to Citibank or the businesses that cashed the checks, McGovern bought $2,400 in Citibank traveler’s checks in Niagara Falls, New York. The purchase agreement required McGovern to sign each check when purchased and to countersign it, in the presence of the person cashing it, when it was negotiated.

McGovern traveled to Erie, Pennsylvania, where he coached Scull in imitating his signature and gave Scull his driver’s license for identification. Scull signed McGovern’s name and cashed the checks at two banks and a GTE store, obtaining $2,400. McGovern then falsely reported the checks stolen and received $2,400 in replacement checks from Citibank.

After a bench trial, the United States District Court for the Western District of Pennsylvania convicted both defendants under 18 U.S.C. § 2314 for transporting traveler’s checks bearing forged countersignatures in interstate commerce. The defendants appealed, arguing that Scull’s signatures were authorized by McGovern and therefore could not amount to common-law forgery.

Issues

Issue #1

Whether Scull’s signing of McGovern’s name on the traveler’s checks constituted common-law forgery under 18 U.S.C. § 2314 despite McGovern’s purported authorization.

Holding

Yes. McGovern could not validly authorize Scull to sign and cash the traveler’s checks, so Scull’s impersonating signature, combined with the intent to defraud, was common-law forgery.

Reasoning

For purposes of § 2314, forgery carries its common-law meaning. The offense requires a false making or material alteration, an intent to defraud, and a writing that would have legal effect if genuine. The defendants disputed only the false-making element, maintaining that authorization to sign another person’s name defeats forgery.

Although authority to sign another’s name may negate forgery in some settings, traveler’s checks operate differently. They are accepted on the issuer’s credit and on the apparent match between the purchaser’s original signature and the signature made when the check is cashed. Their ready negotiability depends on the ability of the person cashing them to verify that the presenter is the purchaser.

The purchaser’s agreement expressly required McGovern personally to sign the checks at purchase and personally to countersign them in the cashing party’s presence. That contract denied him any right to delegate the check-cashing power. Because McGovern lacked authority to delegate, his attempted authorization of Scull had no legal effect under agency principles.

Scull also deliberately deceived the banks and store into believing that he was McGovern. This was not a disclosed representative-signature transaction, in which the person accepting the instrument knows that someone else is signing and can assess the risk that the issuer may refuse payment. Scull instead acted as an imposter, using McGovern’s identification and forged signature to induce acceptance.

The defendants intended precisely the harm that followed: Scull would obtain cash while Citibank or the accepting businesses would bear the loss. Thus, Scull’s unauthorized impersonating signature on otherwise legally effective traveler’s checks, coupled with the admitted fraudulent intent, satisfied common-law forgery and the elements of § 2314.

Issue #2

Whether applying § 2314 to the defendants’ conduct violated due process or equal protection.

Holding

No. The court rejected the defendants’ constitutional challenges.

Reasoning

The court concluded that treating the defendants’ conduct as prohibited by § 2314 did not deny them due process or equal protection. Because the statutory language, informed by the established common-law meaning of forgery, covered the fraudulent use of traveler’s checks through an imposter’s unauthorized countersignature, the convictions did not rest on an unconstitutional application of the statute.