J. JOSEPH SMITH, Circuit Judge:
In October, 1969, personnel in the Custody Department of the Morgan Guaranty Trust Company of New York discovered that some $13,194,000 worth of United States Treasury bills had disappeared, presumably subsequent to their purchase by the bank's Bond Department but prior to their deposit in the vault. On March 4, 1970, government agents arrested Anthony Tavoularis, Joseph DiRienzo and Stuart Norman as
I. THE FACTS
The evidence, viewed in the light most favorable to the government, established, as the government accurately portrays it, a "thieves' market" in stolen bills. In late 1969, Daniels, manager of the Williams Bar on Fort Hamilton Parkway in Brooklyn, asked Norman, who had a vending machine business, if he knew where to get rid of stolen securities. Norman said no, but not long thereafter Melvin Berman, who worked in another bar and was in debt to Norman, asked Norman if he knew of "a good shot at maybe making some money." Tr. 594.
In the meantime, Tavoularis had approached DiRienzo and asked if he could get rid of some Treasury bills. DiRienzo said that a fence in Cedarhurst named Murray might be interested. DiRienzo had never met Murray and, although he did not contact him regarding Tavoularis' proposal, he told Tavoularis that Murray would pay eleven to twelve points (that is, eleven to twelve per cent of face value), but wanted to see a copy of the bills.
On Tuesday, DiRienzo, Tavoularis and one Arnie went to Berman's apartment to pick up the bills. They were unavailable. DiRienzo complained, and Tavoularis assured him that he would have the bills the next day. That evening, however, Norman picked up the package of bills from Poerio and Daniels in a bar on Cross Bay Boulevard, went to Berman's and counted them, and then proceeded to Tom's Bar in East New York for a meeting with Tavoularis and DiRienzo, hoping to make the transfer to DiRienzo's buyer that night. But DiRienzo, taken by surprise, was unable to reach the Secret Service, and told Norman and Tavoularis that Murray couldn't make it that night. Norman returned to Poerio and Daniels at the Cross Bay Boulevard bar to report; Poerio made a telephone call to find out if he could hold the bills until the next morning. He was given the green light, and it was agreed that Norman would meet Daniels and Poerio in the morning in a diner on Atlantic Avenue.
At 8:00 a. m. the next day, Wednesday, March 4, the three met. Daniels and Poerio gave the package of bills to Norman, who went to Frank's Luncheonette to meet Tavoularis and DiRienzo, carrying the package inside his shirt. At the luncheonette, Norman and DiRienzo went into the bathroom while Tavoularis stood outside. DiRienzo examined the bills and returned them to Norman, who put them back in his shirt. All three then left the luncheonette; as they approached Tavoularis' car, ostensibly to go to Cedarhurst to see Murray, DiRienzo gave a pre-arranged signal and they were all arrested.
The government's case thus presented a picture of an ever-lengthening chain of middlemen looking for a buyer. The chain started with the unexplained disappearance of the bills from the Morgan bank. There is no evidence whatever that any of the defendants took part in what was apparently an inside job, nor is there any indication of how many links removed from the bank the defendants were. The government's evidence loses sight of the chain after the bills' disappearance from the Morgan bank and
II. SUFFICIENCY OF THE EVIDENCE
The construction of 18 U.S.C. § 2113(c) is not seriously in issue here.
As a preliminary matter, we dispose of a point not specifically mentioned by the government here, but on which the district court relied in denying defendants' motions to dismiss the indictment at the conclusion of the government's case. The district court apparently held that, if any one defendant had the requisite knowledge, it could be imputed to the other defendants for purposes of the conspiracy count. Tr. 679-80. This is an erroneous statement of legal principle. Where a substantive offense requires specific knowledge, that same knowledge must be established before a defendant can be found to be a member of a conspiracy to commit that offense. United States v. Hysohion, 448 F.2d 343, 347 (2d Cir. 1971). This applies equally to an aider and abettor
It is undisputed that, while the evidence tending to prove that the defendants knew the bills were stolen was overwhelming, there was no direct evidence that they knew they were stolen from a bank. However, placing primary reliance on Crone v. United States, 411 F.2d 251 (5th Cir.), cert. denied, 396 U.S. 896, 90 S.Ct. 195, 24 L.Ed.2d 173 (1969), the government contends, and the district court held, that such knowledge may be inferred from the unexplained possession of property recently stolen from the bank. In Crone, the court adopted a theory of multiple inferences, holding that unexplained possession of recently stolen goods gives rise to an inference of knowledge that the goods were stolen and also to an inference of participation in the theft, and that one who participated in the theft ipso facto has knowledge of where the goods were stolen from. 411 F.2d at 254. We have no occasion here to decide whether, in the abstract, the inference of participation
Of the three defendants, Poerio apparently was the closest link to whoever took the bills from the Morgan bank; it is clear, however, that there was at least one link between Poerio and the bank since Poerio had to call an unidentified person for permission to hold the bills overnight from March 3 to March 4. And given the nature of the "thieves' market" depicted by the government it would be the sheerest of speculation to say that Poerio's contact was the thief. If the evidence rebuts any inference that Poerio participated in the theft, it necessarily defeats that inference with respect to Daniels and Tavoularis as well, for they were both further down the chain. Moreover, Daniels' statement to Norman after a phone call to someone — perhaps Poerio — that the bills were still available, and that they were Treasury notes and not securities, is a clear indication that he was nothing more than a middleman; a participant in the theft would most likely have known what was stolen. As for Tavoularis, the evidence seems clear that he had no part in the operation until recruited by Berman. To infer participation in the theft would thus be irrational here with respect to each defendant, since that inference is totally inconsistent with the evidence adduced by the government. Crone, therefore is inapplicable.
We conclude, therefore, that there was no evidence on which the jury could have based a finding that the defendants knew, beyond a reasonable doubt, that the Treasury bills had been stolen from a bank. This failure of proof on an essential element of the crime requires that the judgments of conviction be reversed and the case remanded to the district court with instructions to dismiss the indictment.
We reverse these convictions with reluctance and regret. The evidence tending to prove that these defendants possessed stolen property knowing it to have been stolen was overwhelming. Unfortunately, the statute under which the government chose to bring this prosecution required more, and on that additional element the government failed — and totally failed — to prove its case. Our system of administering justice requires that a defendant, no matter how guilty he may be of some crime, cannot be convicted unless there is proof beyond a reasonable doubt that he committed the particular crime with which he is charged. The prosecutorial branch of the law enforcement establishment is quite properly vested with considerable discretion in deciding what charges to bring against whom, but in this case the improvident exercise of that discretion — not only in selecting the particular statute under which the case proceeded, but also, and more fundamentally, in pursuing this matter in federal court rather than turning it over to state authorities for prosecution in a more appropriate forum — has caused the release of three proven criminals who ought to be in prison.
Reversed and remanded with directions to dismiss the indictment.
The relevant portion of subsection (b) provides:
The Court went on to hold that greater knowledge would not be required for a conspiracy conviction than for the underlying substantive offense.
We realize that the application of Leary/Turner/Barnes analysis to this common-law inference is contrary to this court's statement in United States v. Coppola, 424 F.2d 991, 993 (2d Cir.), cert. denied, 399 U.S. 928, 90 S.Ct. 2246, 26 L.Ed.2d 795 (1970), that such analysis is applicable only to statutory presumptions and not to common-law inferences. That proposition was rejected in Barnes, supra, 412 U.S. at 844-45 & n. 8, 93 S.Ct. 2357, however, and we are obliged to give Barnes controlling effect.
In United States v. Fistel, 460 F.2d 157 (2d Cir. 1972), the defendant, charged with a violation of § 2113(c), told an undercover agent that the bills there involved were included on a list of securities missing from a particular bank. In this case, the Morgan bank circulated a similar list, but there is no evidence that any defendant saw it or was aware of it.
None of the other cases cited by the government — United States v. Brawer, 482 F.2d 117 (2d Cir. 1973); United States v. Jacobs, 475 F.2d 270 (2d Cir.), cert. denied, 414 U.S. 821, 94 S.Ct. 116, 38 L.Ed.2d 53 (1973); United States v. Izzi, 427 F.2d 293 (2d Cir.), cert. denied, 399 U.S. 928, 90 S.Ct. 2244, 26 L.Ed.2d 794 (1970); and United States v. DeSisto, 329 F.2d 929 (2d Cir.), cert. denied, 377 U.S. 979, 84 S.Ct. 1885, 12 L.Ed.2d 747 (1964) — involved § 2113(c). They were all prosecutions under different statutes which required only knowledge that goods were stolen, not that they were stolen from a particular kind of institution.
Finally, United States v. Hamilton, 457 F.2d 95, 99 (3d Cir. 1972), and United States v. Licausi, 413 F.2d 1118, 1121 (5th Cir. 1969), cert. denied, 396 U.S. 1006, 90 S.Ct. 560, 24 L.Ed.2d 498 (1970), relied on at oral argument, appear to hold only that under § 2113(c) there is no requirement that the defendant know the particular bank from which the property was stolen; they in no way vitiate the requirement that it be proven that the defendant knew the property was stolen from some bank. So far as Licausi may be thought to hold otherwise, we must respectfully differ.
Tavoularis and Daniels challenge the authority of Strike Force attorneys to present a case to the grand jury. Even if this claim was not waived by the failure to raise it by pre-trial motion, see Davis v. United States, 411 U.S. 233, 93 S.Ct. 1577, 36 L.Ed.2d 216 (1973), we have no occasion to reach it here.