18 U.S.C. § 513 makes it a federal crime to make, utter, or possess a counterfeit or forged security issued by a state, political subdivision, or private organization, when done with intent to deceive.
The statute covers checks, drafts, money orders, letters of credit, certificates of deposit, stocks, bonds, and other financial instruments.
For corporate officers and financial-services professionals, an 18 U.S.C. § 513 case can arise from an alleged forged signature, endorsement, alteration, or use of a company or financial institution instrument.
What Does 18 U.S.C. § 513 Prohibit?
The statute defines “organization” broadly. It includes corporations, companies, associations, firms, partnerships, joint stock companies, foundations, institutions, societies, unions, and other associations of persons that operate in or whose activities affect interstate or foreign commerce.
“Security” also has a comprehensive definition under the statute. Covered instruments include:
- Checks and drafts
- Certificates of deposit
- Stocks and bonds
- Debentures and warrants
- Money orders and traveler's checks
- Letters of credit
- Evidence of indebtedness
- Investment contracts
- Instruments evidencing ownership of goods or merchandise
- Blank forms of covered instruments
The federal government does not have to show that the alleged forged instrument was transported across state lines. The Department of Justice explains that § 513 does not require the interstate transportation element found in certain other federal forgery statutes.
What is the Difference Between a Forged Security and a Counterfeit Security?
Section 513 distinguishes between a counterfeit security and a forged security. A “counterfeited” document is claimed to be genuine but was falsely made or manufactured in its entirety.
A “forged” document is put forward as genuine but was falsely altered, completed, signed, endorsed, or otherwise modified. The definition of forged also includes a document assembled from parts of two or more genuine documents.
That difference can matter when a corporate officer is accused of participating in a transaction involving an altered or falsely endorsed instrument.
What Does “Uttering” Mean Under Federal Forgery Law?
“Uttering” generally refers to offering, passing, presenting, or transferring a forged instrument as genuine. For a corporate officer, an uttering allegation might involve signing or endorsing a check, directing an employee to deposit an instrument, or presenting it to a bank.
What Must the Government Prove Under 18 U.S.C. § 513?
For an 18 U.S.C. § 513(a) prosecution, the government must establish the statutory components beyond a reasonable doubt. In practical terms, the prosecution will focus on four questions:
- Was the instrument a security covered by § 513?
- Was the security counterfeit or forged as the statute defines those terms?
- Did the defendant make, utter, or possess the security?
- Did the defendant act with intent to deceive another person, organization, or government?
The final element can become particularly important in cases involving corporate officers. Knowing a document existed differs from intending to deceive.
Involvement in a transaction does not by itself establish that an officer knew a signature, endorsement, alteration, or other portion of a security was false.
Why is Intent to Deceive Important in a Corporate 18 U.S.C. § 513 Case?
Section 513(a) expressly requires intent to deceive. Corporate officers may have legitimate authority to approve payments, sign documents, direct employees, authorize transfers, or negotiate with financial institutions.
A dispute can arise when someone later alleges that a signature, endorsement, authorization, or corporate instrument was forged.
Evidence showing reliance on employees, established approval procedures, outside professionals, prior dealings with a bank, or incomplete knowledge of a document's creation can become relevant to whether the officer knew that the particular instrument was false and intended another person or organization to accept it as genuine.
How Can a Financial Institution's Records Affect an 18 U.S.C. § 513 Prosecution?
Financial records can become central evidence in a forgery prosecution. Investigators may examine account-opening documents, signature cards, check images, transaction histories, deposit records, wire instructions, authorization logs, internal compliance records, and communications between the company and the financial institution.
A bank record may establish that a check was deposited without establishing who knew an endorsement was forged. An internal approval may show that an officer authorized payment without establishing knowledge of an alteration.
A defense may require comparison of the bank's records with the company's accounting system, approval procedures, communications, and testimony from the people who handled the transaction.
What Penalties Apply to a Violation of 18 U.S.C. § 513?
A violation of § 513(a) is punishable by a fine, imprisonment for not more than 10 years, or both. Section 513(b), which addresses implements designed or particularly suited for making counterfeit or forged securities, carries the same maximum term of imprisonment.
Put simply, § 513(b) makes it a federal crime to possess equipment specifically designed or particularly suited to produce forged or counterfeit checks, bonds, certificates of deposit, or other securities covered by § 513.
Federal sentencing also considers the United States Sentencing Guidelines and statutory factors, including the charged conduct, criminal history, and, where relevant, financial loss.
What Are Potential Defenses to a Federal Securities Forgery Charge?
The appropriate defense depends on what the government alleges and what the evidence establishes. Potential defenses include:
- The instrument does not qualify as a security under § 513
- The document was genuine rather than falsely made or altered
- The defendant did not make, utter, or possess the instrument
- The defendant lacked knowledge that the instrument was forged or counterfeit
- The defendant lacked the required intent to deceive
- The alleged conduct involved a genuine instrument containing inaccurate information rather than a forged security
- The evidence does not reliably connect the defendant to the creation, alteration, endorsement, or use of the instrument
Does 18 U.S.C. § 513 Apply to Every Type of Check?
No. Section 513 is broad, but its coverage depends on the statutory definition of “security” and the identity of the issuer or organization involved.
The Justice Department has stated that the law does not cover personal checks or securities issued by the United States government.
Separate federal statutes address counterfeiting and forging United States obligations, including 18 U.S.C. §§ 471 and 472. Section 513 covers securities issued by private organizations, including securities of foreign corporations and foreign banks.
What Are the Related Federal Laws in a Securities Forgery Investigation?
Understanding related federal statutes is critical because federal prosecutors frequently stack multiple fraud and forgery charges in a single indictment to expand corporate liability and increase statutory penalties.
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Federal Bank Fraud (18 U.S.C. § 1344): Prohibits knowingly executing or attempting to execute a scheme to defraud a financial institution or obtain money, funds, or assets owned by or under the custody of a bank through false or fraudulent pretenses, carrying penalties of up to 30 years in federal prison.
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Federal Wire Fraud (18 U.S.C. § 1343): Penalizes using interstate electronic communications, wire transfers, emails, or digital banking systems to carry out a fraudulent scheme involving negotiable instruments or financial documents, punishable by up to 20 years in prison.
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Fictitious Obligations (18 U.S.C. § 514): Criminalizes appearing to issue, pass, or negotiate false or fictitious instruments—such as fake financial instruments modeled after non-existent securities—with intent to defraud, carrying a maximum sentence of 20 years in prison.
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Aggravated Identity Theft (18 U.S.C. § 1028A): Mandates an additional, consecutive two-year prison sentence if a person knowingly transfers, possesses, or uses the identification or signature of another individual without lawful authority during the commission of a federal forgery or bank fraud offense.
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Conspiracy to Commit Fraud or Forgery (18 U.S.C. § 371): Makes it a federal felony for two or more individuals to conspire to commit any offense against the United States or to defraud the federal government, establishing penalties of up to 5 years in prison.
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Mail Fraud (18 U.S.C. § 1341): Prohibits using the U.S. Postal Service or private commercial interstate carriers to transmit checks, corporate forms, forged securities, or related correspondence in furtherance of a scheme to defraud, punishable by up to 20 years in prison.
Hypothetical Case Study: Corporate Officer Accused of Forging Bank Instruments
A chief financial officer of a nationwide financial-services company is accused of directing the use of three corporate checks totaling $2.4 million.
Investigators contend that the CFO caused the checks to be issued with altered payee information and later presented one check to a bank with an allegedly forged endorsement.
The government has emails showing that the CFO approved the payments and testimony from an employee who says the CFO requested that the checks be processed quickly.
An outside treasury-management provider prepared and transmitted the checks, and the CFO did not personally handle the physical instruments. Bank records establish that the checks were negotiated, but they do not identify who altered the payee information or endorsement.
White-Collar Crime Defense by Eisner Gorin LLP
Our white-collar defense attorneys at Eisner Gorin LLP would focus on the statutory connection between the CFO and each particular security. That would include:
- Examining who created the checks,
- Who had access to the treasury system,
- Who possessed the instruments,
- Who made the alleged alterations, and
- What the CFO actually knew when the checks were negotiated.
Our firm would also examine whether the evidence shows intent to deceive rather than merely approval of legitimate corporate payments.
Our team could establish that the outside provider generated the checks from information another executive supplied and that the CFO approved them before the alleged alterations.
The government would be left without reliable evidence that the CFO knew the checks had been altered or intended the bank to accept forged instruments as genuine. The government would have to dismiss the § 513 charges or prove them at trial.
Frequently Asked Questions (FAQs)
Reviewing these common legal questions provides essential clarity for corporate officers, business owners, and accounting executives seeking to understand their exposure under federal forgery statutes and protect their organization from high-stakes federal prosecution.
When does a check or security forgery issue become a federal crime under 18 U.S.C. § 513?
A forgery or counterfeiting issue becomes a federal crime under 18 U.S.C. § 513 when it involves a security issued by a state, political subdivision, or private organization whose activities affect interstate or foreign commerce, and the act is committed with the intent to deceive another entity or individual.
What is the main difference between a counterfeit security and a forged security under federal law?
A counterfeit security is falsely made or manufactured in its entirety to pass off as genuine, whereas a forged security is an authentic document that has been falsely altered, completed, signed, endorsed, or assembled from parts of genuine documents without authorization.
Does 18 U.S.C. § 513 require proof that the forged security crossed state lines?
No, unlike certain other federal forgery statutes, 18 U.S.C. § 513 does not require federal prosecutors to prove interstate transportation of the document, as jurisdiction rests entirely on whether the issuing or targeted organization affects interstate commerce.
How does the government prove "intent to deceive" in a corporate § 513 prosecution?
The government must prove beyond a reasonable doubt that the accused deliberately misled or defrauded another party, which defense attorneys often counter with evidence of legitimate corporate authority, reliance on professional advice, or standard administrative oversight.
Does 18 U.S.C. § 513 apply to personal checks or federal government securities?
No, Section 513 specifically covers securities issued by private organizations, state or local governments, and foreign entities, while personal checks and instruments issued by the United States government are governed by separate federal statutes such as 18 U.S.C. §§ 471 and 472.
What are the maximum criminal penalties for a conviction under 18 U.S.C. § 513?
A conviction under either Section 513(a) for making, uttering, or possessing a forged security or Section 513(b) for possessing legal implements designed to make forged securities carries a penalty of up to 10 years in federal prison, statutory criminal fines, and mandatory restitution.
Speak to a Federal Defense Lawyer
The federal criminal defense attorneys at Eisner Gorin LLP can help you. Schedule your consultation by calling (818) 781-1570 or filling out the contact form. Our law firm is based in Los Angeles.
