Petition — Pellitieri v. United States

Supreme Court, U. &

FILED

JUN 12 1978

“| MICHAEL RODAK, JR., CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

JUNE TERM, 1978

No. bs Pe! 69 3

SALVATORE (SAM) PELLITIERI,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

’ PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals for the

Eighth Circuit

JOHN D. CONNAGHAN

1620 South Broadway

St. Louis, Missouri 63104

241-4549

Counsel for Petitioner

St. Louis Law Printing Co., Inc., 812 Olive Street 63101 314-231-4477

INDEX

Page

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PE dees dcenegad Gienneeddass 6ebeenaeneek 2

ED «ccd etedceeesuaeus eabaeaceehss 2

Statutes and rules involved ........................ 3

DE Cctakingsnne keene kan nk eecanddeandende 5

Reasons for granting the writ ....................... 7

SE neds ca dabaendiuasbeeeesecenesawaeneas 9

Appendix A—Opinion of United States Court of Appeals

Re ee ED o's bi 06k oo bcd whnndebsdsc'e ds A-1l

Appendix B—Petitioner’s petition for a rehearing ...... A-18

Appendix C—-Order of United States Court of Appeals for

the Eighth Circuit staying mandate ................ A-21

Cases Cited

United States v. Kearse, 444 F2nd 62 ................

United States v. Infanti, 474 F2nd 522 ..............

United States v. Brown, 482 F2nd 1325 .............. 8

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PU PS cuecedecccnsececugte scutes téadvuce 5

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Federal Rules of Criminal Procedure:

RARE IE Seer

IN THE

SUPREME COURT OF THE UNITED STATES

JUNE TERM, 1978

St awoke:

SALVATORE (SAM) PELLITIERI,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals for the

Eighth Circuit

Salvatore (Sam) Pellitieri, Petitioner, prays that a Writ of

Certiorari be issued to review the judgment of the United States

Court of Appeals for the Eighth Circuit filed in this cause on

April 24th, 1978.

OPINION BELOW

The opinion of the Court of Appeals is not yet reported

and is printed as Appendix A, infra.

JURISDICTION

Petitioner’s petition for a rehearing was duly filed and over-

ruled by the Court of Appeals on May 16th, 1978 and is

printed as Appendix B, infra. The Court of Appeals ordered a

Stay of the Mandate for thirty days from May 24th, 1978 to

permit petitioner to file this petition for Writ of Certiorari,

said order printed as Appendix C, infra. The jurisdiction of

this Court is invoked under 28 USC §1254(1).

QUESTIONS PRESENTED

1. Whether an individual can be convicted of having in his

possession certificates of Kraftco Corporation Stock, which had

therefore been stolen, taken and carried away from a shipment

moving as, and part of, an interstate shipment of freight and

express, when the evidence is that said documents were blank

forms and part of a shipment moving from the printer to the

corporation and had not been executed by the proper corpo-

ration officers, and had not been issued by the corporation.

2. Whether it is improper for a Court of Appeals to find

under one count of a multi-count Indictment that certain

documents in evidence are not securities, and then under an-

other count to find the defendant guilty of having in his pos-

session stolen stock certificates in violation of 18 USC §659.

3. Whether there is a fatal variance where an indictment

charges possession of a stock certificate, and the evidence

shows a blank business form of a certificate which had never

been executed.

4. Whether petitioner received a fair trial, where hearsay

statements of a co-defendant are admitted at trial to prove up

a conspiracy, and the later appeal dismisses the Conspiracy

Count, and affirms the count for possession of stolen goods

under 18 USC 8659.

=P

5. Whether the trial court errored in refusing to instruct the

Jury on the definition of a “Stock Certificate”, where defendant

was accused of having in his possession a stolen stock certifi-

cate and the evidence established that the thing in possession

was a blank business form customarily used by corporations

to issue stock certificates.

6. Whether constructive possession of stolen property is

proven where there is no evidence of actual possession and no

evidence that (1) defendant could set price for goods, (2) that

defendant had final say as to the means of transfer, (3) that

defendant was able to assure their delivery.

7. Whether the element of value as required under 18 USC

§659, of stolen goods is established in evidence by using the

so called “Thieves market” value theory, where an FBI agent

makes an artificially high offer to purchase from a rather

gullible individual, and other evidence shows a rather low

value in comparison for actual costs to produce said goods.

STATUTES AND RULES INVOLVED

18 USC § 659 provides, in part:

Whoever embezzles, steals, or unlawfully takes, carries

away, or conceals, or by fraud or deception obtains from

any pipeline system, railroad car, wagon, motortruck, or

other vehicle, or from tank or storage facility, station, sta-

tion house, platform or depot or from any steamboat,

vessel, or wharf, or from any aircraft, air terminal, airport,

aircraft terminal or air navigation facility with intent to

convert to his own use any goods or chattels moving as or

which are a part of or which constitute an interstate or

foreign shipment of freight, express, or other property; or

auttian

Whoever buys or receives or has in his Possession any

such goods or chattels, knowing the same to have been

embezzled or stolen; or

Shall in each case be fined not more than $5,000 or im-

prisoned not more than ten years, or both: but if the

amount or value of such money, baggage, goods or chattels

does not exceed $100, he shall be fined not more than

$1,000 or imprisoned not more than one year, or both.

Rule 30 of the rules of Criminal Procedure provides:

Instructions.—At the close of the evidence or at such

earlier time during the trial as he reasonably directs, any

party may file written requests that instruct the jury

on the law as set forth in the requests. At the same time

copies of such requests shall be furnished to adverse par-

ties. The court shall inform counsel of its proposed action

upon the requests prior to their arguments to the jury, but

the court shall instruct the jury after the arguments are

completed. No party may assign as error any portion of

the charge or omission therefrom unless he objects thereto

before the jury retires to consider its verdict, Stating dis-

tinctly the matter to which he objects and the grounds

of his objection out of the hearing of the jury and, on re-

quest of any party, out of the presence of the jury.

Rule 52 of the rules of Criminal Procedure provides:

HARMLESS ERROR AND PLAIN ERROR

(b) Plain error,—Plain errors or defects affecting substantial

rights may be noticed although they were not brouglit to

the attention of the court.

STATEMENT

Defendant and another were originally indicted by the Fed-

eral Grand Jury for the United States District Court of Missouri

Eastern Division on three felony Counts; Conspiracy to trans-

port stolen securities in interstate Commerce 18 USC § 371,

2314; Receiving and concealing stolen securities that were part

of interstate Commerce, 18 USC § 2315; and possession of

stolen goods ard chattels valued at more than $100.00 that

were part of interstate Commerce, 18 USC § 659. The Jury

found defendant guilty under all three Counts (T-429), and he

was duly sentenced (T-433). Defendant in time perfected his

appeal to the United States Court of Appeals, Eighth Circuit,

who rendered their opinion reversing the conviction on counts

one and two, and affirming the conviction on count three (ap-

pendix A).

Defendant is seeking Writ of Certiorari on the affirmation of

the judgment of conviction on count three.

The evidence will show that one Michael C. Jackson, Co-de-

fendant did on March 11, 1977 show to an FBI agent of the

United States Government two blank stock certificate forms,

which had been reported missing from an interstate shipment.

(T-229). Immediately afterwards Jackson was observed meeting

with defendant and another person and was overheard saying

“Give me the copies” (T-104). Shortly, thereafter Jackson gave

the Xeroxed copies to the undercover agent (T-234). The

Xeroxed copies of the blank stock certificate forms were later

introduced in evidence (T-361). There was no other direct evi-

dence introduced concerning the possession of the two blank

stock certificate forms. There was quit a bit of other evidence

introduced which showed that defendant was associated with

Jackson in attempting to obtain other blank stock certificates

from New York.

~— =

Evidence as to value was received from two sources. One

source was from the shipping invoice which declared that the

total value of the shipment, which consisted of 3000 blank

certificates of stock, was $550.00 (T-29). The other source of

value was from the FBI undercover agent, who stated that he

had agreed to purchase the blank forms of stock certificates

from Jackson for a total of $18.15 per share of stock repre-

sented by the blank forms. The Copies of the blank forms in

evidence could have totaled 199 shares, as one was for 100

shares, and the other could rst have been issued for more than

99 shares. The price of $18.15 was allegedly arrived at on

March 11th, 1977 by applying 40% of value of the closing

price of legal Kraftco stock which was quoted at 45 and %ths

on that date (T-231).

REASONS FOR GRANTING THE WRIT

The trial Court did depart from the accepted and usual

course of judicial proceedings, and the Court of Appeals has

sanctioned this departure as to call for an excise of this court's

power of supervision, for the reason that the trial court refused

to instruct the Jury on an acceptable and understandable defi-

nition of a stock certificate as requested by defendant. (T-373).

The trial court committed plain error in overruling defend-

ant’s motion for judgment of acquittal as the plaintiff failed to

prove any of four facts necessary for a conviction under 18

USC § 659, that is:

1. That defendant had possession of stolen goods or chattels.

2. That the stolen goods or chattels, to wit: Certificates of

Kraftco Corporation stock, were in fact stock certificates.

3. That the said goods or chattels had a value in excess of

$100.00.

4. That defendant had knowledge that the said goods and

chattels were stolen.

The decision of the 8th Circuit Court of Appeals is in con-

flict with the decisions of the 2nd Circuit Court of Appeals.

Evidence of defendant’s relationship to the disposition

of the goods, or that he was involved in the transaction, is

not sufficient to sustain a conviction for possessing stolen

goods under this section, as there must be a showing of

“Dominion and control” over the goods in question; United

States v. Kearse (1971 CA 2 NY), 444 F2nd 62.

Where one defendant (although he witnessed sale of

stolen securities) was not shown to have had actual pos-

session of stolen securities at anytime, inference of knowl-

edge that securities were stolen raised by possession was

not applicable; and finding of constructive possession could

not be made since there was no evidence that (1) defendant

could set price for securities, (2) that he had final say as

to means of transfer, or (3) that he was able to assure their

delivery, proof of at least one of these being necessary to

a finding of constructive possession as required for con-

viction under 18 USC § 2314; United States v. Infanti

(1973 CA 2 NY) 474 F2nd 522.

Conviction under 18 USC § 659 for possession of goods

stolen from interstate shipment requires evidence of do-

minion and control of property that was subject of the

theft; United States v. Brown (1973, CA 3 NY) 452 F2nd

1325.

The trial court errored, and the Court of Appeals sustained the

error in permitting the case to go to the Jury on the issue of

value in that the only evidence that the two blank stock cer-

tificate forms had any value was from the shipping document,

which indicated that the 3000 forms in the shipment had a value

of $550.00, which would in turn result in the two forms in

evidence having a value of thirty cents. The other evidence as

to value given by the undercover agent was pure speculation

and was disregarded by the Appeals Court (Appendix A, A-15).

This defendant has not received a fair trial in that the plain-

tiff was permitted to try the case on the theory that the blank

stock certificates forms in evidence were to be treated as com-

pleted genuine stock certificates, and the verdict of the Jury

shows that this resulted in the Jury being bias and prejudiced

against this defendant. It is obvious now that defendant should

have been charged under the lesser offense contained in 18

USC § 659 (possession of stolen goods under $100.00), and

the plaintiff should not be permitted to rectify his error by ap-

plying a phony set of values to the stolen goods.

CONCLUSION

For the reasons stated herein, we respectfully submit that

the Petition should be granted.

Respectfully submitted,

JOHN D. CONNAGHAN

1620 South Broadway

St. Louis, Missouri 63104

241-4549

Attorney for Petitioner

APPENDIX

—_*

APPENDIX A

United States Court of Appeals for the Eighth Circuit

No. 77-1602 )

United States of America,

Appellee,

We

Michael C. Jackson, ;

eae — Appeals from the United

Appellant.

- ; States District Court for

No. 77-1612 = Eastern District of

United States of America, meena

Appellee, |

Salvatore (Sam) Pellitieri,

Appellant. |

Submitted: December 13, 1977

Filed: April 24, 1978

Before Lay, Bright, and Henley, Circuit Judges.

Bright, Circuit Judge.

On June 23, 1977, a federal petit jury in St. Louis, Missouri,

convicted Michael Jackson and Salvatore “Sam” Pellitieri on

three felony counts: conspiracy to transport stolen securities

in interstate commerce, 18 U.S.C. §§ 371, 2314 (1976); re-

ceiving and concealing stolen securities that were part of in-

terstate commerce, 18 U.S.C. § 2315 (1976); and possession

of stolen goods or chattels valued at more than $100 that were

— * een

part of interstate commerce, 18 U.S.C. § 659 (1976). Both

defendants wer= sentenced to five years on the conspiracy

charge and seven years on each of the other charges; the sen-

tences are to run concurrently.

In this appeal the defendants challenge their convictions.

They contend primarily that blank stock share certificates are

not “securities” and therefore not covered by the federal crim-

inal code provisions on which they were convicted, and that

even if the blanks are securities, their value is jess than that

required for conviction under the statutes.

We reverse their convictions on counts I and II, finding that

blank stock certificates are not securities under the terms of

the applicable federal criminal code provisions. We affirm their

convictions on count III, for possession of stolen goods or

chattels, holding that the requisite jurisdictional minimum of

over $100 is met in this case.

On February 18, 1977, the American Bank Note Company

of Bronx, New York, delivered five boxes of blank Kraftco

share certificates to Novo Air Freight of Newark, New Jersey,

for shipment to the National Boulevard Bank of Chicago. Two

of the boxes, one containing 1,250 certificates in 100-share

denominations and the other 1,750 certificates in “odd-lot” de-

nominations,’ were missing at the destination point. On Feb-

ruary 22, 1977, the Federal Bureau of Investigation was no-

tified of the theft.

In order to recover the certificates, the FBI devised an un-

dercover operation in which agents posed as representatives of

a construction company seeking stolen share certificates to use

. Share certificates denominated as “odd-lot” could be

to indicate between | and 99 shares. None of the 1,750 certificates

had been so, in theory, the box contained a maximum of

184,250 Kraftco shares.

YY

as security for a performance bond. On March 11, 1977,

agent Don Taylor called appellant Michael Jackson on the

telephone. During their conversation Jackson stated that he

could obtain some blank stock certificates, and they agreed to

meet that day to discuss the transaction.

The meeting was held at the Rodeway Inn in St. Louis,

Missouri. At the meeting Jackson stated that he had access to

200,000 shares of stolen blank Kraftco share certificates and

displayed two of the blanks to Taylor. One was a 100-share

certificate, and the other an odd-lot certificate that had not

been punched out to indicate a definite number of shares. Agent

Taylor and Jackson agreed upon a price of forty percent of

market value per share.* After the meeting a second FBI agent,

William Dial, observed Jackson meet with Salvatore “Sam” Pel-

litieri and a third party. Jackson stated, “Give me the copies.”

Jackson then returned to Taylor and gave him xeroxed copies

of the two share certificates he had earlier displayed.

Negotiations between Jackson and Taylor over the purchase

of the blank certificates continued during the next few days.

Jackson identified his source as “Sam” but indicated that he

was having delivery problems. He mentioned that he might

have to go to New York to make the initial purchase. Because

the FBI had obtained a warrant to tap the telephone Jackson

used, it was able to record many of these conversations as well

as conversations between Jackson and Pellitieri concerning the

transaction. Pellitieri was kept under surveillance during this

period. On several occasions he was observed in the vicinity

of the negotiations, and FBI agents overheard him make sev-

eral incriminating statements.

On March 24, 1977, Pellitieri flew to Buffalo, New York.

There the FBI observed him meeting with three other individ-

2 The closing price for Kraftco stock was 45% dollars per share

on March 11, 1977. Thus, the parties agreed on a price of approxi-

mately $18.15 per share for the stolen certificates.

ots

uals. On March 25, 1977, Jackson received a package from

Pellitieri that was sent via Trans World Airlines, from New

York. The package contained one blank certificate of Alco

Products, Inc., stock. That evening Jackson showed Taylor the

Alco stock certificate. He stated that if Taylor did not like the

Alco stock, “Sam” was in New York and had access to other

“samples,” which he would forward to St. Louis for approval.

The next day Jackson called Taylor and told him that the

Alco stock was worthless but that he would call “Sam” and

request more samples.

On March 30, 1977, Taylor went to a small office where

Jackson was working. He arrested Jackson and seized a file

drawer full of documents and a brief case resting on top of

the file cabinet as evidence. Pellitieri was also arrested, and

the two were brought to trial together.

Neither Jackson nor Pellitieri attack the sufficiency of the

evidence. Instead, both assert that the trial court made revers-

ible errors that fall into two broad categories:

(1) admission of improperly-obtained evidence; (2) allowing

the prosecution to go ahead under the assumption that (a)

blank stock share certificates are covered by the provisions of

the federal criminal statutes allegedly violated, and (b) the

minimum jurisdictional value of the contraband required for

prosecution under the statutes was met in this case.

A. Admission of Improperly-Obtained Evidence.

Jackson and Pellitieri make different objections tc certain

items of the evidence introduced at their joint trial. Pellitieri

argues that the district court erred in admitting into evidence

the wiretapped and recorded telephone conversations. Jackson

—

dees not object to the wiretap evidence, but he claims that the

Government on his arrest illegally seized evidence from the

closed file drawer and his attache case, and therefore that evi-

dence should not have been admitted at trial.

Pellitieri’s objection to the recorded telephone conversations

can be dismissed summarily.* Our review of the record indi-

cates that the warrant authorizing the wiretaps was based on

probable cause and properly issued. We do not find that the

supporting affidavit contains any material misrepresentations or

omissions. Instead, the affidavit fairly sets out the facts as the

Government understood them, and it sufficiently supports prob-

able cause.

Jackson’s contention that the evidence seized when he was

arrested should have been suppressed by the district court is

more troublesome. When Jackson was arrested in an office the

FBI seized a drawer full of documents in a file cabinet and

an attache case resting on top of the cabinet. Later the FBI

searched through the drawer and attache case, finding two

items that were introduced as evidence at trial: the blank Alco

stock certificate that Jackson had displayed previously to FBI

% Pellitieri summarizes his argument that the district court erred

in admitting into evidence the wiretap conversations as follows:

(a) The authorization of aforesaid wire taps were [sic] not

made in compliance with Title 18, Sections 2511, 2515, 2516,

2517 and 2518 of the U.S. Code Annoteted.

(b) The information contained in said wire taps was imma-

terial and irrelevant to the crimes for which defendant was being

tried.

(c) The information contained in said wire taps was of such

a nature that the jurors minds were prejudiced and poisoned

against this defendant and caused the jury to return a verdict

which was contrary to the evidence.

(d) Procedures as authorized in the above Sections were not

followed and resulted in prejudice of the defendant.

In the bedy of his argument, however, Pellitieri conflates his four

sub-points into one complaint: The warrant that authorized the wire-

tap was issued without probable cause because of various deficiencies

in the supporting affidavit filed by the FBI agent Taylor.

—_—

agent Taylor, and a note from Pellitieri to Jackson, apparently

mailed from New York, that read:

Could Alco Products be Shell Corp?

100 Sheets [at] 100 shares each—10,000 shares

10,000 shares at 55.00

$550,000.00

Check this figure per share

Studebaker, White Motor Division, Worthington-Alco

Products

Name affiliated with Alco Products

The district court denied Jackson’s motion to suppress the

items taken in the arrest search, stating:

This file cabinet opened on its top and sides, and was so

opened at the time of the arrest. Thus, the contents of the

cabinet were visible without the need to open drawers.

Agent Taylor had also seen defendant place documents

concerning false certificates of deposit in defendant's at-

tache case. This case was on top of, or along aside [sic],

the file cabinet at the time of arrest. Both the attache

case and one drawer of the file cabinet containing bank

records were seized at the time of arrest. No search war-

rant was obtained prior to the seizure.

It is the Court’s conclusion that the seizure of evidence

was proper. The items seized were in plain view. Cf,

United States v. Rothberg, 345 F.Supp. 1331, 1334-35

(E.D. N.Y. 1971), rev'd on other grounds, 460 F.2d 223

(2d Cir. 1972).

In admitting the evidence under the “plain view” exception to

the search warrant requirement, the district court erred. Al-

though the file drawer and the brief case that the agents seized

—v

were perhaps’ in plain view, the contents of each were not.

The plain view doctrine does not authorize search and seizure

of items contained within objects like attache cases, file cabi-

nets, and luggage that are themselves in “plain view.” See

Coolidge v. New Hampshire, 403 U.S. 443, 464-73 (1971):

cf. United States v. Chadwick, 97 S$.Ct. 2476, 2485 (1977).

A “plain view” seizure is limited to items that are clearly in-

criminating and that are inadvertently encountered in the course

of a justifiable intrusion. Coolidge v. New Hampshire, supra,

403 U.S. at 468-71. It cannot be used as justification for rum-

maging through file cabinets, even with probable cause to be-

+ Agent Taylor testified as follows at the suppression hearing:

Q. Mr. Taylor, so we're not confused, can you tell us once

ca rawer in the file cabinet was open and which was

Q. On the top drawer, I believe you said that you looked

through those and found noth nothing with regards to the Federal

Bank of Dominica, is that correct?

. That's correct.

A

Q. You had to out a drawer from below to get the file

that you were for?

A. The second drawer was underneath the first, yes.

Q. Did you open any of the desks or anything of that nature

while you were in the office? -

A. I glanced at the files that were on top of the desk in there,

because these were out in immediate view, and found nothing

there that pertained to the Federal Bank of Dominica and

didn’t seize any.

Q. You opened no drawers other than the ones have

described in the file cabinet? “

A. As I recall.

As the testimony indicates, Taylor could see only the file drawers

a ne oe cane Sees, So ons imately ssiaad,

—_ Se at least partially obscured by the top drawer. The

ve seen of the contents of the file drawers from his

Susi GU Wire tne tho tape af tho fie tehdoms Nothing inside

the attache case, which was closed, was exposed to his view.

nwiie

lieve that incriminating evidence lies within. Cf. United States

v. Chadwick, supra.

The Government’s alternative argument justifying the sei-

zure and search as “incident to arrest” under Chimel v. Cali-

fornia, 395 U.S. 752 (1969), is also invalid. Chimel held that

arresting officers could search, without a warrani, only the area

within the immediate control of the person arrested, meaning

the area from which he might gain possession of a weapon or

destructible evidence. See id. at 762-63. As the Supreme Court

stated in United States v. Chadwick, supra, 97 S.Ct. at 2485:

Once law enforcement officers have reduced luggage or

other personal property not immediately associated with

the person of the arrestee to their exclusive control, and

there is no longer any danger that the arrestee might gain

access to the property to seize a weapon or destroy evi-

dence, a search of that property is no longer an incident

of the arrest. [Footnote omitted.]

In this case, Jackson was already in custody when the seizure

was made. Both the file cabinet and the file drawer were lo-

cated well outside of his wing-span and, as agent Taylor testi-

fied, nothing was available to Jackson that would enable him

to destroy the evidence.

The Government appears to recognize that the quoted pas-

sage from Chadwick indicates that this search and seizure was

illegal but argues: (1) Chadwick should not be retroactively

applied,® and (2) introduction of the illegally-obtained evi-

dence was harmless beyond a reasonable doubt.

We need not reach this first argument for we agree with the

Government's alternative contention that the evidence against

Jackson, excluding the two items seized when he was arrested,

was overwhelming. The lengthy negotiations between Jackson

5 The seizure and search occurred on March 30, 1977. The Su-

preme Court announced its opinion in Chadwick on June 21, 1977.

—v

and agent Taylor, as well as the ten tape-recorded telephone

conversations, furnished the Government with enough evidence

to convince us that introduction of the illegally-obtained evi-

dence was harmless beyond a reasonable doubt. Harrington v.

California, 395 U.S. 250, 251 (1969); Chapman v. California,

386 U.S. 18, 24 (1967).

B. The Blank Stock Certificates.

Jackson and Pellitieri's remaining arguments al! relate to

whether it was proper, given the evidence, to indict and con-

vict them for violations of 18 U.S.C. §§659 and 2315, and

conspiracy to violate 18 U.S.C. §2314.° In particular, they

argue that (a) blank stock certificates are not “securities” for

purposes of those statutes, and (b) the value of the blank cer-

tificates is less than the jurisdictional minimum required for

conviction under the statutes.

“ jackson summarizes his argument as follows:

The court erred in overruling *s motions for directed

verdict, acquittal, and judgment acquittal notwithstanding the

verdict, an, to Ge cihacnibvn, Gor aoe tial. These rulings by

the court were erroneous in that the documents in question were

not securities within the meaning of U.S.C., Title 18, and the

documents in question did not have a value of either $5,000 or

$100 or more.

Pellitieri, although phrasing his objections somewhat differently, in

substance makes the same attack:

|. The trial court erred in ove defendant's pre-trial mo-

tion to dismiss the indictment for failure of said indictment to

State a violation of law. .

Il. The trial court erred in overruling defendant’s motion for

judgment of acquittal at the close of all the evidence for the

fellase of the eddies to canst Ge Chane @ cxaniiené fe

counts I, II, and III.

111. The court erred in refusing to instruct the jury on the legal

definition of a stock certificate or a security.

= &t—

1. 18 U.S.C. §§ 2314, 2315.

Count I of the indictment alleged, and became the basis of

a conviction, that the defendants conspired’ to violate 18

U.S.C. § 2314 (1976), by transporting stolen securities in inter-

state commerce. Count II, also the basis of a conviction,

alieged a violation of 18 U.S.C. § 2315 (1976), for possession

of stolen securities that were part of interstate commerce. Sec-

tion 2314 reads, in pertinent part, as follows:

Whoever transports in interstate or foreign commerce

any goods, wares, merchandise, securities or money, of

the value of $5,000 or more, knowing the same to have

been stolen, converted or taken by fraud * * *

Shall be fined not more than $10,000 or imprisoned

not more than ten years, or both.

Section 2315 includes the following relevant provision:

Whoever receives, conceals, stores, barters, sells, or

disposes of any goods, wares, or merchandise, securities,

or money of the value of $5,000 or more, or pledges or

accepts as security for a loan any goods, wares, or mer-

chandise, or securities, of the value of $500 or more,

moving as, or which are a part of, or which constitute

interstate or foreign commerce, knowing the same to have

been stolen, unlawfully converted, or taken * * *

Shall be fined not more than $10,000 or imprisoned

not more than ten years, or both.

The term “securities,” as used in both 18 U.S.C. §§ 2314 and

2315, is defined at 18 U.S.C. § 2311 (1976):

“Securities” includes any note, stock certificate, bond,

debenture, check, draft, warrant, traveler's check, letter

7 Thus, the defendants were convicted under the general con-

spiracy statute, 18 U.S.C. § 371 (1976), which incorporates as a

a

eee

— A-11 —

of credit, warehouse receipt, negotiable bill of lading,

evidence of indebtedness, certificate of interest or partici-

pation in any profit-sharing agreement, collateral-trust

certificate, preorganization certificate or subscription,

transferable share, investment contract, voting-trust cer-

tificate; certificate of interest in property, tangible or in-

tangible; instrument or document or writing evidencing

ownership of goods, wares, and merchandise, or trans-

ferring or assigning any right, title, or interest in or to

goods, wares, and merchandise; or, in general, any instru-

ment commonly known as a “security”, or any certificate

of interest or participation in, temporary or interim cer-

tificate for, receipt for, warrant, or right to subscribe to

or purchase any of the foregoing, or any forged, counter-

feited, or spurious representation of any of the foregoing

> *+ ¢

The issue posed by this case is that while the section 2311

definition embraces both genuine securities and forged or coun-

terfeit securities, it is silent about genuine blank certificates

that, when filled out properly, would designate stock share

ownership.

Clearly, the blank certificates are not “forged, counterfeited,

Or spurious representation{s],” and the Government does not

argue that they are. Instead, the Government urges that the

court find that they are “securities,” within the broad language

of section 2311. The blank certificates, however, lacked sev-

eral essential ingredients of a genuine stock certificate: the

name of the registered owner, a transfer agent’s signature, and

a counter-signature. Moreover, the certificates all bore the

words “not valid unless countersigned,” and the odd-lot cer-

tificates were not punched out to indicate the particular amount

of shares represented.”

* See Appendix “A”.

— 12 —

No court apparently has ever confronted the issue raised in

this case.* In the recent case of United States v. Speidel, 562

F.2d 1129 (8th Cir. 1977), cert. denied, 46 U.S.L.W. 3553

(1978), however, this court held that quit-claim deeds are

securities under section 2311 and opted for a broad construc-

tioa of the term “securities” in section 2311:

We note at the outset that “securities” is defined to

include the several categories of documents named. This

is similar to the wording, also in § 2311, used to define

“motor vehicle” and “tax stamp”. By contrast, the same

section defines some other types of property with the

word means. Using the plain and ordinary meaning of

these terms, it is apparent that the definition of securities

is intended to be expansive. The legislative history of

this statute reinforces this construction. During the course

of enactment, the wording of the bill’s definition of se-

curities was changed from “means” to “includes.” [Cita-

tions omitted.]

Even with a broad construction of section 2311 definition,

however, we cannot class blank share certificates as securities.

* Analogous blank certificates, such as checks and money orders,

that have been stolen and then filled out in order to — them

for have formed a basis for prosecution under § 2311 or

§ 2315. In such cases, the courts have found them to be forged,

counterfieited or spurious representations covered by the § 2311 defi-

nition of securities. See, e.g., Gearing v. United States, 432 F.2d 1038

(Sth Cir. 1970) (money order), cert. denied, 401 U.S. 980 (1971);

United States v. Seay, 386 F. Supp. 550 (E.D. Ill. 1974) (check),

aff'd, 518 F.2d 646 (7th Cir.), cert. denied, 423 U.S. 995 (1975).

In United States v. Anderson, 359 F. Supp. 61 (E.D. Ark. 1973),

Chief Judge (now Circuit Judge) Henley ruled that § 2311 covers

incomplete bond forms that lacked the countersignatures and names

of the payees. In that case, however, the bond certificates were

counterfeited. In United States v. Anderson, 532 F.2d 1218 (9th

Cir. 1976), the court found that genuine stock certificate forms, with

the names of fictitious shareholders and complete except for a signa-

ture in the blank space provided for the stock transfer agent, were

securities with the scope of § 2311. These certificates were deemed

as “counterfeit” or “spurious” securities because of the falsification

of shareholder names.

— A-13 —

To be sure, the potential for fraudulent use of these certificates

is great. But criminal statutes are construed strictly, and the

blank stock share certificates involved in this case are too far

removed from the genuine to class them as securities. The

blank certificates simply do not, in their present incomplete

form, fall under the express terms of 18 U.S.C. § 2311 defini-

tion of securities.'°

Our holding that the stolen blank stock certificates are not

securities necessitates reversal of the convictions on counts I

and II. This is not a case where the variance between the proof

and the indictment encompasses a mere factual detail. See, e.g.,

United States v. Freeman, 514 F.2d 1184 (10th Cir. 1975)

(indictment alleged acts done in own name; evidence estab-

lished that acts were done in corporate name). Instead, the

variance goes to the heart of the indictment; the proof failed

to establish one of the crucial elements necessary for prosecu-

tion under the particular parts of sections 2314 and 2315 cited

in the indictment, stolen securities. The fact that the Govern-

ment might have succeeded under other sections of the statutes,

see note 10 supra, is not enough to salvage the convictions.

The cornerstone of Jackson and Pellitieri’s defense was that

these certificates were not “securities”; it would be unjust and

unfair to uphold their convictions under alternative statutory

language. We cannot disregard a variance, such as this one.

that affects substantial rights. See Fed. R. Crim. P. 52(a).

1” Our holding does not, as one might first assume, necessarily

make impossible a prosecution under 18 U.S.C. §§ 2311, 2314

(1976) for misconduct such as in this case. The Government might

have proceeded under two other, more plausible, theories in order to

convict Jackson and Pellitieri under §§ 2314 and 2315. One possi-

bility would have been to ciass the stock certificates as stolen “goods,

wares, or merchandise,” which are covered by the first paragraphs

of both §§ 2314 and 2315. Another approach would have been to

proceed under the theory that the certificates are “things used or

intended to be used in falsely making, forging, altering, or counter-

feiting any security,” covered by the fifth paragraph of § 2314 and

the third paragraph of § 2315.

— A-14 —

Because we have determined the convictions of Jackson and

Pellitieri under counts I and II of the indictment must be re-

versed on the grounds that blank stock share certificates are

not securities, we do not need to consider their second objec-

tion: that the value of the stolen certificates did not meet the

jurisdictional minimum of $5,000.

2. 18 U.S.C. § 659.

Jackson and Pellitieri’s third conviction was based or 18

U.S.C. § 659 (1976), which provides in relevant part that:

Whoever embezzles, steals, or unlawfully takes by any

fraudulent device, scheme, or game, from any railroad

car, bus, vehicle, steamboat, vessel, or aircraft operated

by any common carrier moving in interstate or foreign

commerce or from any passenger thereon any money,

baggage, goods, or chattels, or whoever buys, receives,

or has in his possession any such money, baggage, goods,

or chattels, knowing the same to have been embezzled or

stolen— :

Shall in each case be fined not more than $5,000 or

imprisoned not more than ten years, or both; but if the

amount or value of such money, baggage, goods or chat-

tels does not exceed $100, he shall be fined not more

than $1,000 or imprisoned not more than one year, or

both.

Because the indictment and conviction under section 659 is

based on possession of stolen “goods” or “chattels,” the flaw

that resulted in our reversal of the convictions on counts I

and II is absent. Although the stolen blank stock certificates

are not “securities,” we have no qualms about classifying them

as “goods” or “chattels.” Indeed, Jackson and Pellitieri do not

even contest this point.

— A-15 —

Instead, the defendants argue that the “goods” and “chat-

tels,” consisting of the two Kraftco stock certificates exhibited

to agent Taylor, are not worth $100, therefore limiting any

imprisonment to one year under the express terms of section

659. In their view, the certificates have no intrinsic value other

than their printing cost. Because the shipping invoice declared

a value of $550 for all the certificates, two certificates are

worth only forty-eight cents.

In reply, the Government urges that the court adopt a

“thieves’ market” value for the certificates. Under this method

of appraisal, the two share certificates would be worth $3,-

612.25."

The courts have repeatedly approved the use of bartered or

thieves’ market value as a proper means of appraising stolen

goods or chattels. See, e.g., United States v. Tyers, 487 F.2d 828,

831 (2d Cir. 1973), cert. denied, 416 U.S. 971 (1974); United

States v. Ditata, 469 F.2d 1270, 1272 (7th Cir. 1972);

Churdes v. United States, 387 F.2d 825, 833 (8th Cir. 1968).

Although we approve of this method in general, we entertain

some skepticism that these two pieces of paper were worth

$3,612.25.'* Nevertheless, we believe that sufficient evidence

existed to justify a jury verdict that the incompleted stock cer-

tificates at issue were worth more than $100.

11 The “thieves’ market” price asserted by the Government is the

price at which agent Taylor agreed to buy the blank Kraftco stock

certificates, 40% of market value. Market value at the time the price

was set was approximately $45.38 per share. The two certificates,

one “round lot” of 100 shares and one “odd-lot” that could be

punched to a maximum of 99 shares, equalled 199 shares. Thus,

199 x $45.38 x 40% = $3,612.25.

‘2 A transaction between an FBI agent who is trying to make a

case and a thief who is willing to sell for all he can get is shaky evi-

dence of value in the thieves’ market or any other market. The most

it may show is the gullibility of the thief in believing that someone

would pay that much for the invalid securities.

“A”

—<

° —

— A-16 —

Ill

In summary, the convictions of both Jackson and Pellitieri

on counts I and II are reversed; their convictions on count III

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are affirmed. We remand the cases to the district court for entry

Attest:

of the appropriate judgment.

— A-18 —

APPENDIX B

In the

United States Court of Appeals

For the Eighth Circuit

United States of America,

Appellee,

> No. 77-1602, 1612

Salvatore (Sam) Pellitieri,

Appellant. J

APPELLANT'S PETITION FOR REHEARING

AND/OR

TRANSFER TO THE COURT EN BANC

Comes now Salvatore (Sam) Pellitieri, Appellant, and for

his Petition states:

1. The opinion of the Court of Appeals was filed on April

24th, 1978.

2. This motion is filed in accordance with Supreme Court

Rule 40 of the Rules of Appellate procedure.

3. The opinion of the Court as filed is contradictory in that

the Court did under Counts I and II make a specific finding

that the blank certificates of stock were not securities, but under

Count III this defendant now stands Convicted of having in

his possession certificates of Kraftco Corporation Stock.

4. The Court has over-looked the total effect of the differ-

ence between a certificate of stock and a blank certificate of

stock and a stock certificate business form, and Xeroxed copies

of blank business forms.

— A-19 —

5. Under Count III this defendant was charged with having

in his possession certificates of Kraftco Corporation stock, which

had theretofore been stolen, evidence clearly shows, and the

Court so found, that these items mentioned in evidence shows,

and the Court so found, that these items mentioned in evidence

are not “Securities”. Under Section 2311 USC, the term “Se-

curity” includes the term “Stock Certificate”. Now if these

items are not “Securities”, then they are not “Stock Certificates”,

and if they are not “Stock Certificates”, then there is a fatal

variance between the indictment and the evidence used to con-

vict. The Court in its opinion refers to the items in evidence

as “blank” stock Certificates about twenty times. Yet the in-

dictment fails to mention the term “blank”.

6. The Court has overlooked the fact that the items in evi-

dence are not certificates and for the same reasons stated in

the opinion reversing the Convictions under Count I and II,

that is, strict construction of criminal statutes and variance that

goes to the heart of the indictment, Count III should be dis-

missed, otherwise this defendant will stand convicted of hav-

ing in his possession something that this Court has ruled, did

not in fact exist, “stolen Certificates of Kraftco Stock”.

7. The Court overlooked this defendants objection to the

Courts failure to instruct the Jury on the definition of a stock

certificate. Had the Jury been instructed as this defendant re-

quested, the Jury would have returned a verdict of “not guilty”.

After listening to all the evidence about Counts I and II, the

minds of the Jury were so prejudiced against this defendant,

that they did not give any consideration to the charge under

Count III, and although many of them may have had some

skepticism about the value of items in evidence, and may have

rejected the values as established on rather shaky evidence be-

tween an FBI agent trying to make a Case, and a rather gullible

thief, they completely ignored the evidence and found this de-

fendant guilty under Count III, because the witnesses for the

—eeeeee

— A-20 —

prosecution, the prosecutor and the Court repeatedly referred

to the items in evidence as Certificates of Kraftco Corporation

Stock.

8. The Court has further overlooked the fact that no evi-

dence was introduced showing that this defendant had actual

or joint possession of any stock certificates charged in the

indictment. Further there was no evidence that this defendant

exercised any power or Control over the items in evidence, or

that he set the price for said items, or that he had the final

say as to their delivery. Unless, at least one of the above items

was proven by the evidence, then the Jury should have found

that the possession of stolen property was not proven, and they

should have returned a verdict of “not guilty” as to this defend-

ant. Because the evidence failed to show actual or construc-

tive possession in this defendant, the Jury could not infer that

this defendant had any knowledge that the items were stolen.

All of the foregoing is further indication that the Jury was

biased and prejudiced against this defendant, and their verdict

is a denial of substantial rights of this defendant. United States

v. Infanti, 474 F2d 522.

Wherefore, this defendant prays the Court to reconsider its

opinion issued on April 24, 1978 and after due consideration,

and so as to do substantial justice to this defendant, to reverse

the judgment as to Count III, or to remand said Count III back

to the District Court for a new trial.

JOHN D. CONNAGHAN

1620 South Broadway

St. Louis, Missouri 63104

(314) 241-4549

Attorney for Appellant

an &3t «

APPENDIX C

United States Court of Appeals

For the Eighth Circuit

No. 77-1612

United States of America, Appellee,

v.

Salvatore (Sam) Pellitieri, Appellant

On motion of appellant, it is now here ordered that the is-

suance of the mandate herein be, and the same is hereby, stayed

for a period of thirty days from this date. If within that time

there is filed with the Clerk of this Court a certificate of the

Clerk of the Supreme Court of the United States that a petition

for writ of certiorari has been filed, the stay hereby granted shall

continue until the final disposition of the case by the Supreme

Court.

May 24, 1978