United States v. Thomas J. Faust

Thomas Faust appeals his convictions under 18 U.S.C. §§ 495 and 641 (1982) for forgery and embezzlement.

On October 8, 1980, the federal government entered into a security agreement with Tractug Associates in accordance with the Federal Ship Mortgage Insurance Program, Title XI, Merchant Marine Act of 1936. Under this agreement, the Maritime Administration (MARAD), which is a division within the United States Department of Transportation, guaranteed approximately $25 million in bonds and notes, thus enabling Tractug Associates to obtain financing for the construction of eight tugboats. Thomas Faust organized and was the general partner of Tractug Associates.

Section 2.07 of the security agreement addressed the issue of insurance and possible damage to any of the eight tugboats. The government required that the vessels be insured, with any loss over $100,000 payable to the Secretary of Transportation for distribution “by himself to himself and Tractug Associates.” An endorsement subsequently required that losses exceeding $50,000 would be payable jointly to the Secretary of Transportation and Tractug Associates. A copy of the endorsement, signed by Faust, was forwarded by the…