Also known as: false-making · falsemaking · forgery
Written by attorneys — see sources below.
The fraudulent making or altering of a writing so that it appears to be genuine. The writing must misrepresent its own execution or nature rather than merely contain false statements, and the act must be done with intent to defraud.
Forrest Falconer received a check from Frostline Textiles in payment for goods. The check bore no visible signs of alteration when Falconer negotiated it to a bank. The bank later discovered the drawer signature had been forged but could not point to any irregularity apparent on the face of the instrument at the time of negotiation.
Fatima Flores left her signature stamp unsecured in an open office drawer. A coworker used the stamp to forge endorsements on several checks drawn on Flores's account. The bank paid the checks in good faith and later sought to preclude Flores from asserting the forgeries.
Farah Fox prepared financial statements containing forged board resolutions for Franklin Foundry. The company's outside auditors failed to detect the false making during their review. Investors later sued the auditors for negligence in not uncovering the fabricated documents.
Osborne Computer Corporation was founded in 1980 by entrepreneur Adam Osborne and began manufacturing the Osborne I portable personal computer for the mass market, with shipments starting in 1981. By fall 1982, sales of the company's sole product had reached $10 million per month, making the company one of the fastest growing enterprises in the history of American business. In 1981 and again in 1982, the company retained Arthur Young & Company to audit its financial statements and issue audit reports. Arthur Young issued unqualified audit opinions on the company's 1981 and 1982 financial statements. The 1982 opinion was issued on February 11, 1983, appeared on Arthur Young's letterhead addressed to the company, and 100 copies of the professionally printed opinion were personally delivered to the company. The 1982 financial statements reported a modest net operating profit of $69,000 on sales of more than $68 million. In late 1982 the company postponed a planned initial public offering and instead issued warrants to investors in exchange for bridge financing loans or letters of credit. Plaintiffs, a group that included individuals as well as pension and venture capital funds, invested in the company in early 1983; one plaintiff, Robert Bily, purchased 37,500 shares of stock from Adam Osborne for $1.5 million. With one exception, plaintiffs testified that they made their investments in reliance on Arthur Young's unqualified 1982 audit opinion. After the warrant transaction closed on April 8, 1983, sales declined sharply because of manufacturing problems with the company's new Executive model computer, the public offering never occurred, and the company filed for bankruptcy on September 13, 1983, causing plaintiffs to lose their investments. Plaintiffs brought separate lawsuits against Arthur Young in Santa Clara County Superior Court that were consolidated for trial. Plaintiffs' expert witness identified more than 40 deficiencies in the 1982 audit amounting to gross professional negligence, including an understatement of liabilities by approximately $3 million that turned the reported $69,000 profit into a loss of more than $3 million, and testified that Arthur Young had discovered but failed to disclose material weaknesses in the company's internal accounting controls. After a 13-week trial the jury returned a verdict for plaintiffs on the professional negligence claim and awarded approximately $4.3 million in compensatory damages, but found for Arthur Young on the fraud and negligent misrepresentation claims. The trial court granted Arthur Young's motion for judgment notwithstanding the verdict on the negligence claim. The Court of Appeal reversed the judgment in favor of Arthur Young. The Supreme Court of California granted review.
View caseFrancesca Fowler was convicted after forging a government contract to obtain a federal grant. The trial court imposed a lengthy prison term. Fowler challenged the sentence as cruel and unusual punishment given the nonviolent nature of the false making offense.
Paul Weems served as a disbursing officer of the Bureau of Coast Guard and Transportation in the Philippine Islands. He was prosecuted for falsifying a public cash book. The complaint charged that he entered sums of 208 pesos and 408 pesos as wages paid for lighthouse service at Capul and Matabriga when those amounts had not been disbursed. The complaint described Weems as an official of the United States Government of the Philippine Islands and alleged that the falsification was committed corruptly with intent to deceive that government. A demurrer to the complaint was overruled. Weems was convicted after trial. The trial court imposed a sentence of fifteen years of cadena temporal together with a fine of four thousand pesetas and the accessory penalties of civil interdiction, perpetual absolute disqualification, and subjection to surveillance for life. The sentence required service at hard and painful labor while carrying a chain at the ankle hanging from the wrists and with no assistance from outside the penal institution. The Supreme Court of the Philippine Islands affirmed the conviction and sentence. Weems obtained a writ of error from the United States Supreme Court. The assignments of error challenged the sufficiency of the complaint based on the governmental description used. They also claimed that the punishment was cruel and unusual, although that contention had not been presented to the Philippine courts. The record before the Supreme Court contained no trial evidence. The penalty of cadena temporal included not only the term of imprisonment but also perpetual accessories that continued after release. Those accessories encompassed disqualification from exercising parental or marital authority, loss of rights to vote or hold office, and the requirement to notify authorities of any change in domicile while remaining under their inspection.
View caseFrederick Ferguson created a forged selective service card as part of a public demonstration against the draft. He burned the document during the protest. Prosecutors charged him with false making even though the act was intended as symbolic speech.
On the morning of March 31, 1966, David Paul O'Brien and three companions burned their Selective Service registration certificates on the steps of the South Boston Courthouse. A sizable crowd, including several agents of the Federal Bureau of Investigation, witnessed the event. Immediately after the burning, members of the crowd began attacking O'Brien and his companions. An FBI agent ushered O'Brien to safety inside the courthouse. After he was advised of his right to counsel and to silence, O'Brien stated to FBI agents that he had burned his registration certificate because of his beliefs, knowing that he was violating federal law. He produced the charred remains of the certificate, which, with his consent, were photographed. For this act, O'Brien was indicted, tried, convicted, and sentenced in the United States District Court for the District of Massachusetts. He did not contest the fact that he had burned the certificate. He stated in argument to the jury that he burned the certificate publicly to influence others to adopt his antiwar beliefs, as he put it, "so that other people would reevaluate their positions with Selective Service, with the armed forces, and reevaluate their place in the culture of today, to hopefully consider my position." The indictment upon which he was tried charged that he "willfully and knowingly did mutilate, destroy, and change by burning . . . (his) Registration Certificate (Selective Service System Form No. 2); in violation of Title 50, App., United States Code, Section 462(b)." Section 462(b)(3), one of six numbered subdivisions of § 462(b), was amended by Congress in 1965, 79 Stat. 586, so that at the time O'Brien burned his certificate an offense was committed by any person "who forges, alters, knowingly destroys, knowingly mutilates, or in any manner changes any such certificate . . . ." In the District Court, O'Brien argued that the 1965 Amendment prohibiting the knowing destruction or mutilation of certificates was unconstitutional because it was enacted to abridge free speech, and because it served no legitimate legislative purpose. The District Court rejected these arguments. On appeal, the Court of Appeals for the First Circuit held the 1965 Amendment unconstitutional as a law abridging freedom of speech. The Court of Appeals ruled, however, that O'Brien's conviction should be affirmed under the statutory provision making violation of the nonpossession regulation a crime. The Government petitioned for certiorari arguing that the Court of Appeals erred in holding the statute unconstitutional. O'Brien cross-petitioned arguing that the Court of Appeals erred in sustaining his conviction on the basis of a crime of which he was neither charged nor tried. The Supreme Court granted the Government's petition to resolve the conflict in the circuits, and it also granted O'Brien's cross-petition.
View caseFlora Ford deposited a U.S. Treasury check bearing a forged endorsement at Fulton Shipping's account. The government later sought recovery from the bank. The dispute turned on whether federal common law or state rules governed liability for the false making on the federal instrument.
On April 28, 1936, a check was drawn on the Treasurer of the United States through the Federal Reserve Bank of Philadelphia to the order of Clair A. Barner in the amount of $24.20, dated at Harrisburg, Pennsylvania for services rendered by Barner to the Works Progress Administration, and placed in the mail addressed to Barner at his address in Mackeyville, Pa., but Barner never received the check. Some unknown person obtained the check in a mysterious manner and presented it to the J. C. Penney Co. store in Clearfield, Pa., representing that he was the payee and identifying himself to the satisfaction of the employees of J. C. Penney Co. He endorsed the check in the name of Barner and transferred it to J. C. Penney Co. in exchange for cash and merchandise, but Barner never authorized the endorsement nor participated in the proceeds of the check. J. C. Penney Co. endorsed the check over to the Clearfield Trust Co., which accepted it as agent for the purpose of collection and endorsed it as follows: “Pay to the order of Federal Reserve Bank of Philadelphia, Prior Endorsements Guaranteed.” Clearfield Trust Co. collected the check from the United States through the Federal Reserve Bank of Philadelphia and paid the full amount thereof to J. C. Penney Co. Neither the Clearfield Trust Co. nor J. C. Penney Co. had any knowledge or suspicion of the forgery. Each acted in good faith. On or before May 10, 1936, Barner advised the timekeeper and the foreman of the W. P. A. project on which he was employed that he had not received the check in question, and this information was duly communicated to other agents of the United States. On November 30, 1936, Barner executed an affidavit alleging that the endorsement of his name on the check was a forgery. No notice was given the Clearfield Trust Co. or J. C. Penney Co. of the forgery until January 12, 1937, at which time the Clearfield Trust Co. was notified, and the first notice received by Clearfield Trust Co. that the United States was asking reimbursement was on August 31, 1937. This suit was instituted in 1939 by the United States against the Clearfield Trust Co., the jurisdiction of the federal District Court being invoked pursuant to the provisions of 28 U.S.C. § 41(1). The cause of action was based on the express guaranty of prior endorsements made by the Clearfield Trust Co., J. C. Penney Co. intervened as a defendant, and the case was heard on complaint, answer and stipulation of facts. The District Court dismissed the complaint. On appeal the Circuit Court of Appeals reversed. The Supreme Court granted certiorari because of the importance of the problems raised and the conflict between the decision below and a decision from the Ninth Circuit.
View caseYes. Only writings that appear to have legal significance, such as contracts or commercial instruments, can be the subject of false making at common law. A document valued solely for historical or artistic reasons does not qualify.
Yes. Fraudulently causing another to sign a document without understanding what is being signed constitutes false making. If the signer understands the document, no false making occurs even if the signature was obtained by misrepresentation.
No. Intent to defraud is sufficient. The prosecution need not show that anyone suffered pecuniary harm or that the defendant caused actual loss.
A lawyer must report when the lawyer knows of a violation involving false making that raises a substantial question about the other lawyer's honesty or fitness, unless the information is protected by confidentiality rules.
Syllabus The Court of Common Pleas of Franklin County, Ohio, convicted respondent of forgery of a check in the name of Bernard Isaacs and of receiving stolen property, namely, checks in the name of Isaacs and his wife. The checks had been taken from the Isaacs' home, which had been…