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People v. Maynarich: Is Counterfeit Currency A Bank Note?

Counterfeiting was once considered to be tantamount to treason.  It is still a serious, but not capital, crime.  In fact, it is one of only four crimes specifically mentioned in the Constitution.  Notably, however, the Constitution doesn’t mention paper currency, it refers rather to the “securities and current coin of the United States”.  Perhaps this was because the first general circulation of paper currency didn’t occur until the Civil War. Prior to that time, private banks issued bank notes that varied wildly in denomination and design.

A recent California decision tackled the question of whether currency is in fact a bank bill or note.  Heath Maynarich was convicted of forgery under Penal Code Section 475 after having been found in possession of three counterfeit $50 bills.  After California voters approved Proposition 47, Mr. Maynarich petitioned the court to recall his conviction and reduce it to a misdemeanor.  He argued that Proposition 47 amended Penal Code Section 473 to define the punishment for forgery of, among other things, a bank bill or note as a misdemeanor.  The trial court refused, explaining:

“[U]nless currency is considered to be equivalent to any of those items, then I don’t think [Proposition] 47 would apply, and—so the only question is, is currency considered a bank bill or note? And I don’t think it is. It’s not currency. Those are basically blank instruments that can be filled out, as opposed to, you know, forging currency, which I don’t think is contemplated by [Proposition] 47.”

People v. Maynarich, 2016 Cal. App. LEXIS 468 (Cal. App. 2d Dist. June 15, 2016).  The Court of Appeal disagreed:

United States currency, issued by the Federal Reserve Bank, qualifies as a bank bill or note. As explained in People v. Bedilion (1962) 206 Cal.App.2d 262 [24 Cal. Rptr. 19], at the time of the enactment of [Penal Code] section 475 in 1872, the expressions “bank bill” and “bank note” were synonymous terms. (Bedilion, at p. 269.) “‘A bank bill or a bank note may be defined as a written promise on the part of the bank to pay to the bearer a certain sum of money, on demand; an obligation for the payment of money on demand, passing from hand to hand as money …’ . … [¶]  Of course, today the issuance of such bank notes or bills is generally forbidden [by] private banks and ‘bills,’ our paper currency, are issued only by the Federal Reserve banks.” (People v. Bedilion, supra, 206 Cal.App.2d at p. 269, citations omitted; see also People v. Ray (1996) 42 Cal.App.4th 1718, 1722 [50 Cal. Rptr. 2d 612] [“bills,” as used in § 480, proscribing counterfeiting, includes Federal Reserve notes].)  Indeed, if United States currency were not a bank bill or note, defendant’s conviction for violating section 475 would be suspect.

Id.  

By my count, the U.S. Constitution mentions a total four criminal offenses.  As discussed above, counterfeiting is one of them.  The other three are treason (Article III, § 3); piracies and felonies committed on the high seas (Art. I, § 8); and offenses against the law of nations (Art. I, § 8).  Treason is the only crime defined by the constitution.  Article I, Section 8 empowers Congress to define and punish piracies and felonies committed on the high seas.  Oddly it empowers Congress only to provide for the punishment of counterfeiting.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume VI, Number 180
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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