United States v. Jerry Charles Dunlap, Rolondo Romo, John Roben, Bradford Serna

Four defendants, Dunlap, Romo, Roben, and Serna, were indicted for violations of 18 U.S.C. §§ 371 and 2314 (conspiracy to transport and transportation of counterfeit securities). The district court dismissed the indictment on the ground that the counterfeit department-store scrip being transported was not a “security” within the meaning of 18 U.S.C. §§ 2311 and 2314. The government, pursuant to 18 U.S.C. § 3731 , appealed.

The only issue before us is whether the Broadway store’s scrip, if genuine, would be a “security” under 18 U.S.C. §§ 2311 and 2314. A forged or counterfeit security is a “security” under the statute.

The government asserts that these papers fall within the § 2311 definition as either “evidence of indebtedness” or an instrument “commonly known as a security”.

The defendants argue that 18 U.S.C. § 2314 is a criminal statute and as such must be strictly construed. They also argue that, under any construction, the scrip is not a security within the § 2311 definition.

Although the scrip has value, it is primarily a medium of limited exchange and is not evidence of an obligation or a promise to pay money.

Broadway issues the scrip:

(1) When a customer returns…