more than a promise to pay, it cannot be true or false. Only assertions of fact are capable of being true or untrue and it would seem that § 1014 is designed only to prohibit such false statements of fact in connection with, for example, an application for a loan.
Additionally, the 1948 version of § 1014 covered institutions which for the most part were engaged in the business of lending money to farmers and home owners. Of the originally enumerated organizations, only the Reconstruction Finance Corporation and the federal reserve banks performed any duties other than making farm and home loans. See United States v. Sabatino, 485 F.2d 540 (2d Cir. 1973). Neither of those two organizations resemble a federally insured bank because they do not accept checks for deposit from private customers. Therefore, when Congress enacted the original version of the statute, it clearly did not intend to cover the presentation of worthless checks. The 1970 amendment increased the jurisdictional scope of the statute by adding banks and savings and loan associations whose deposits were insured either by the Federal Savings and Loan Insurance Corporation or the Federal Deposit Insurance Corporation. However, nothing in the legislative history nor in the amendment to the statute indicates that by the addition of such banks Congress intended to make the presentation of worthless checks to those banks a federal crime. Although holding that making a false statement in an application for an automobile loan to a bank whose deposits were insured by the Federal Deposit Insurance Corporation was within § 1014 following the enactment of the 1970 amendment even though automobile loans had never been covered by that statute before, the United States Court of Appeals for the Second Circuit in United States v. Sabatino, 485 F.2d 540, 542 (2d Cir. 1973) stated that the question of whether Congress intended an extension of federal criminal jurisdiction to that area was not entirely free from doubt, citing statistics indicating that as of June 30, 1973 the Federal Deposit Insurance Corporation insured 13,669 banks of which 9,063 were state banks. Clearly, an extremely large number of transactions which had not been federal crimes until 1970 were made so by the extension of the statute to applications for loans made by state banks. It is doubtful that Congress intended simply by the addition of federally insured banks to the statute to create federal jurisdiction over crimes which might be more prevalent than false statements made in loan applications to state banks and which have traditionally been a subject of state regulation. See, e.g., Act of December 6, 1972, P.L. 1482, No. 334, § 1, 18 Pa.C.S.A. § 4105. The Court does not believe that Congress intended to expand federal criminal jurisdiction to the extent suggested by the United States in this case.
Finally, had Congress intended to outlaw the passing of worthless checks to such banks, it could easily have said so in terms far more certain than those contained in § 1014. For example, the Pennsylvania law prohibiting the passing of worthless checks states that a person commits an offense if he issues or passes a check or similar sight order for the payment of money knowing that it will not be honored by the drawee. Therefore, the Court concludes that the passing of worthless checks even to a bank whose deposits are insured by the Federal Deposit Insurance Corporation does not constitute the making of a false statement within the contemplation of § 1014.
Edwards and the United States also dispute whether the passing of worthless checks is one of the enumerated transactions in § 1014. The Government argues that it constitutes an "advance" because in this situation the bank permitted Edwards to draw funds from his account which were credited to that account before the worthless checks which he deposited were presented to the drawee bank for payment. The Court is not convinced that this banking practice, which is not required by the Uniform Commercial Code but is solely within the bank's discretion, constitutes the type of "advance" contemplated in § 1014 for the reason that this particular transaction was not entered into by any of the corporations or organizations originally enumerated in the statute and that the withdrawal of funds from an account prior to the payment of deposited checks is not an "advance" as that term is ordinarily used. However, the Court does not base its ruling on the fact that the presentation of worthless checks is not an enumerated transaction but rather that such presentation is not nor was it intended to be a false statement as defined in § 1014.
For the foregoing reasons, the Court will dismiss the indictment in the above-captioned case.
An appropriate order will be entered.
1. The indictment in the above-captioned case is dismissed.
2. The Clerk of Court shall inform counsel of the dispositive portion of this Order by telephone.
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