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United States v. Goldberg

argued: February 19, 1987.

UNITED STATES OF AMERICA,
v.
GOLDBERG, RONALD J., APPELLANT



On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Crim. No. 86-00090-01.

Higginbotham and Sloviter, Circuit Judges, and Roth, District Judge.*fn*

Author: Roth

Opinion OF THE COURT

ROTH, District Judge

Ronald Goldberg was convicted in the United States District Court for the Eastern District of Pennsylvania on three counts of wire fraud, under 18 U.S.C. § 1343 and § 2, and three counts of causing the transportation of stolen property in interstate or foreign commerce, under 18 U.S.C. § 2314 and § 2. These offenses were committed while Goldberg was imprisoned at the State Correctional Institution at Graterford, Pennsylvania. Goldberg put his scheme into operation on October 29, 1984, by depositing into his account at the North State Savings and Loan Corporation, Greenville, North Carolina (North State), a check in the amount of $230,000, drawn on an account in the name of Goldberg's corporation, Corporate Dynamics International, Inc. (Corporate Dynamics) at Smith, Barney, Harris, Upham and Company, Philadelphia, Pennsylvania (Smith Barney). Goldberg knew that there were not at that time sufficient funds in the Smith Barney Corporate Dynamics' account to cover the check.

The next day, October 30, Goldberg deposited a check for $230,000, drawn on his account at North State, in the Corporate Dynamics annuities account at American Guardian Life Assurance Company, Jenkintown, Pennsylvania (American Guardian). That same day, Goldberg arranged to have a check for $223,000, drawn on Corporate Dynamics' American Guardian account, deposited in Corporate Dynamics' name at Smith Barney. Goldberg was aware that there were not funds in the annuities account to cover the $223,000 check. On November 15, American Guardian was notified that there were insufficient funds to cover the check it had received from North State. However, in the meantime, American Guardian had cleared the $223,000 check, drawn on the annuities account at American Guardian and payable to the Corporate Dynamics account at Smith Barney.

On November 5, 1984, Goldberg telephoned Smith Barney and arranged to have $192,821 of the funds, now credited to Corporate Dynamics at Smith Barney, wired from Chemical Bank, New York, New York, to an account in the name of Corporate Dynamics at Wilmington Trust Company, Wilmington, Delaware (Wilmington Trust). Then on November 7, 1984, Goldberg called Wilmington Trust and instructed that bank to wire $190,000 to Goldberg's account at the Royal Bank of Canada, Montreal, Canada. Finally, after the receipt of the funds in Montreal, Goldberg telephoned from Graterford Prison to the Royal Bank of Canada on several occasions to arrange for the transfer of the $190,000 from Montreal to the Royal Bank of Canada in Nassau, Bahamas. Goldberg was requested by the bank to confirm these instructions in writing and did so. The Royal Bank of Canada then on November 13, 1984, wired the funds from Montreal to the Royal Bank of Canada International Limited in Nassau.

In December 1984, American Guardian, since it had become aware of the fact that there were not funds in the Corporate Dynamics' annuities account to cover the $223,000 check, had its attorney, Harold Semanoff, obtain an injunction, freezing any funds which Goldberg had on deposit with Royal Bank of Canada. Once Goldberg was informed of the injunction, he cooperated with Semanoff to have the funds returned from Nassau to American Guardian. Altogether, with recovery from Wilmington Trust, Smith Barney, and the Royal Bank of Canada in Montreal and Nassau, American Guardian has recouped all but $21,408.63 of the $223,000 taken from it by Goldberg as a result of his scheme to defraud.*fn1

Goldberg was indicted on three counts under 18 U.S.C. § 1343 and § 2*fn2 for causing Chemical Bank to transfer funds by wire to Wilmington Trust, for causing Wilmington Trust to transfer funds by wire to Royal Bank of Canada, Montreal, and for the telephone calls which caused Royal Bank of Canada, Montreal to transfer funds by wire to Royal Bank of Canada, Nassau. He was indicted on three counts under 18 U.S.C. § 2314 and § 2*fn3 for causing the transportation of fraudulently obtained money in interstate or foreign commerce, arising from the same three wire transfers of funds. He was found guilty, after a bench trial, on all six counts. He has appealed, claiming (1) that venue was not proper in the Eastern District of Pennsylvania, (2) that the electronic transfer of funds from one bank to another is not the equivalent of the transfer of "money" under 18 U.S.C. § 2314, and (3) that there was no federal jurisdiction over the offenses charged in Counts Five and Six, the wire transfer of funds from Montreal to Nassau. We have jurisdiction of this appeal under 28 U.S.C. § 1291. The resolution of these issues involves the interpretation and application of legal precepts. Therefore, the scope of our review is plenary. United States v. Adams, 759 F.2d 1099 (3d Cir. 1985). We will affirm the conviction below on all counts.

JURISDICTION

Defendant Goldberg contends that the district court did not have jurisdiction over Counts Five and Six because that wire transfer and transportation of funds was between two foreign cities, Montreal and Nassau. He asserts that "foreign commerce" under 18 U.S.C. § 1343 and § 2314 incorporates the definition of "foreign commerce" in 18 U.S.C. § 10: "The term 'foreign commerce', as used in this title, includes commerce with a foreign country." He argues that the wire transfer, alleged in Count Five, and the transportation, alleged in Count Six, do not come within the term "foreign commerce" because the United States was not a party to or involved in these transactions.

The question presented, however, appears to be more complex than merely the definition of "foreign commerce" under § 1343 and § 2314. First, we must determine if the jurisdiction of the federal district courts can be extended to include this wire transfer of stolen funds between two foreign cities, in a case in which this offense was caused by an American national, located in the United States, using the instrumentability of innocent persons to bring about the wire transfer. If such jurisdiction exists, we must next consider whether or not there is adequate statutory provision, describing the offense charged against defendant Goldberg.

Traditionally, American courts have held that "under American law, jurisdiction in criminal matters rests solely with the legislative and judicial branches of government of the state or country in which the crime is committed." Blakesley, A Conceptual Framework for Extradition and Jurisdiction Over Extraterritorial Crime, 1984 Utah L. Rev. 685, 689.

The general and almost universal rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act is done. For another jurisdiction, if it should happen to lay hold of the actor, to treat him according to its own notions rather than those of the place where he did the acts, not only would be unjust, but would be an interference with the authority of another sovereign, contrary to the comity of nations, which the other state concerned justly might recent.

American Banana Co. v. United Fruit Co., 213 U.S. 347, 356, 53 L. Ed. 826, 29 S. Ct. 511 (1909) (citation omitted) (Holmes, J.).

Chief Justice Taft, however, in the case of a conspiracy, taking place on the high seas and in Brazil, to defraud a corporation in which the United States was a stockholder, distinguished American Banana Co. v. United Fruit Co. on the ground that it was a civil case, based on violation of the Anti-Trust Law in a foreign country and that Congress had failed to specify in the Anti-Trust Law that it was including punishment for such an offense in the event that it was committed outside the territorial jurisdiction of the United States.*fn4 In United States v. Bowman, 260 U.S. 94, 67 L. Ed. 149, 43 S. Ct. 39 (1922), Chief Justice Taft held that in cases of offenses against the operations of the Government of the United States, Congress need not have specified that extraterritorial jurisdiction existed before there could be prosecution in our courts for such crimes which had been committed on the high seas or in foreign countries. 260 U.S. at 98. See United States v. Layton, 509 F. Supp. 212 (N.D. Cal. 1981) (conspiracy to and aiding and abetting the murder of an American Congressman by an American citizen in Guyana has harmful effects within the U.S.; federal district court has jurisdiction over American citizens who commit this type of crime).

Turning from such direct offenses against the United States, as the making of false claims against it or the murder of its elected representatives, to the type of offenses with which defendant Goldberg has been charged here, wire transmission of stolen money, we find precedent for extending the jurisdiction of the federal courts to include offenses, wholly committed outside of this country, if the acts committed are intended to have an effect in the United States. In United States v. Braverman, 376 F.2d 249 (2d Cir. 1967), Bruce Braverman had been convicted of causing the transportation in foreign commerce of eight counterfeit money orders in violation of 18 U.S.C. § 2314 and § 2. Specifically, Braverman and his girlfriend, Nuncia Miranda, while in Rio de Janeiro, Brazil, had cashed counterfeit money orders, drawn on the Lafayette National Bank of Brooklyn, New York. Five months later, after his return to New York, Braverman was arrested by the FBI and tried and convicted in the United States District Court for the Eastern District of New York. Braverman appealed his conviction on a number of grounds. Included among the issues raised on appeal were whether or not Congress had meant the combination of 18 U.S.C. §§ 2 and 2314 to apply to acts committed solely in a foreign country but intended to have an effect in the United States and whether or not the foreign commerce clause of the United States Constitution permits Congress to punish acts done solely in a foreign country but intended to have an effect in the United States. In upholding the jurisdiction of the district court to hear this case, the circuit court ruled that

There would seem to be no logical reason for holding that Congress intended to punish those who cause the violation of a law regulating and protecting foreign commerce only when they act within the borders of the United States or that Congress is powerless to protect foreign commerce from intentionally injurious acts, simply because those acts occur outside our borders. Braverman knew, when he cashed the money orders and gave Miranda two for the same purpose, that he was putting them into foreign commerce because, of necessity, they had to be ultimately paid in Brooklyn, New York.

376 F.2d at 251.

The decision in Braverman reflects earlier reasoning of Mr. Justice Holmes in Strassheim v. Daily, 221 U.S. 280, 55 L. Ed. 735, 31 S. Ct. 558 (1911), a case involving the extradition of Daily from Illinois to Michigan for fraud perpetrated in Michigan by Daily, while Daily in fact was in Illinois:

Acts done outside a jurisdiction, but intended to produce and producing detrimental effects within it, justify a state in punishing a cause of harm as if he had been present at the effect, if the ...


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