Knowledge or Belief

Knowledge or Belief

The element that most often decides a receiving case is the defendant's state of mind. The Code makes a person guilty only if he receives, retains, or disposes of the property "knowing that it has been stolen, or believing that it has probably been stolen."¹ The earlier elements describe things an observer could see: someone took delivery, and the goods had been taken by theft before that. This element describes something no observer can see, namely what the defendant understood about the goods when acting. The previous section separated the question of who keeps the goods from the question of who is guilty, and the mental element is where that separation does its work. An owner can reclaim stolen goods from anyone, but only a defendant who knew or believed the truth about them can be convicted.

The two-part wording of the element, knowledge or belief, answers two opposite dangers. A receiving statute with no mental requirement would convict anyone who bought goods that later turned out to be stolen, so the buyer's guilt would depend on a theft that happened earlier and out of sight, and the law would punish bad luck rather than blameworthy conduct. A statute demanding certainty would fail in the other direction, because a receiver could avoid liability by never asking questions, never learning the goods' history, and then claiming not to have known. The Code reaches both actual knowledge and belief that the goods are probably stolen, which protects the buyer who has no reason to doubt the seller and still catches the one who has every reason to doubt and goes ahead.²

Because a state of mind is private, defendants almost never admit it, and the prosecution proves it indirectly. The jury is asked to infer what the defendant knew or believed from the surrounding facts, such as how the goods were obtained, what was paid for them, what the seller said, how the defendant behaved afterward, and what else the defendant had done. The inference is the same one a person draws from circumstances in ordinary life, and the law permits it for the same reason: if direct proof were required, the element could almost never be established. That explains why this element is taught in three steps below. The first fixes what knowing and believing probably mean, the second shows how other acts of the defendant can prove them, and the third covers the special presumption the Code applies to dealers.

A common mistake comes from treating the element as an objective test. Students go wrong when they ask what a careful buyer should have suspected and stop there, because the Code's words describe what this defendant actually knew or believed.³ Suspicious circumstances still matter, since they are the evidence from which a jury may find that the defendant held the belief, but they remain evidence of a state of mind and do not replace it. A purchaser who honestly accepted a seller's account has not committed receiving, even though the purchaser must surrender the goods to the owner.

Knowing or Believing Probably Stolen

The Code gives the prosecution two ways to prove the mental element, and each deserves a definition before any evidence is weighed. A defendant who knows the property has been stolen is aware, at the moment of acting, that the goods came from a theft. A defendant who believes it has probably been stolen holds the conviction that theft is the likelier explanation for how the goods reached the seller, even without being sure.⁵ The second route exists because the first would rarely be provable alone. Receivers of stolen goods almost never know in the sense of being able to testify to it, since a fence who resells goods must keep up a more respectable front than the thieves who supply them.⁶ A mental element that demanded certainty would therefore be unsatisfiable against most professional receivers.

The statute in People v. Jaffe shows what the added words accomplish. That statute required that the accused know the property to have been stolen, and the New York Court of Appeals reasoned that no one can know what is not so and that belief was not enough under that wording.⁷ A rule demanding knowledge alone also hands every receiver an easy strategy: never confirm anything, keep the doubt alive, and later insist that nothing was ever certain. The belief alternative removes that strategy, because the question becomes what the defendant concluded from the facts available and not whether anyone ever confirmed the truth.⁸ A receiver who sees the warning signs, declines to ask, and goes ahead has therefore already formed the belief the Code requires, and the decision not to ask is itself evidence that the belief was held.

The same word that widens the element also limits it. Probably ordinarily means more likely than not, so the required belief sits between certainty above and bare suspicion below. A buyer who recognizes only that goods might be stolen, and who goes on to accept an ordinary explanation, has felt a flicker of doubt without concluding that theft is the likelier account.⁹ The limit matters because nearly every buyer of used goods has wondered about a bargain at some point, and an element satisfied by that passing thought would convict anyone whose bargain happened to prove stolen. The word probably instead separates deliberate indifference from ordinary commercial naivety. Students lose this issue when they treat a flicker of doubt as belief.

The three buyers paid the same price, so price does not separate them; what separates them is what each transaction told the buyer. Circumstances that commonly make theft the likelier explanation include a price far below market value, delivery at odd hours, and missing documentation.¹⁰ A seller who discourages questions about where the goods came from supplies a reason for suspicion that an honest seller would lack. Guidance for lawyers draws the same inference from a transferor who says not to ask how material was obtained, treating the remark as notice that calls for inquiry before the material is used; that guidance describes what prudence requires of a lawyer and does not define the criminal element, but it shows why such a remark is so telling.¹¹ The facts of an illustration involving a discount dealer named Rob show the same movement from doubt to inference. Rob is tried for receiving twenty-five large-screen televisions, admits taking them, and claims he had no idea they were stolen, but a former employee is prepared to testify that Rob paid only $10,000 for the sets and entered $25,000 in his books. The false entry undercuts the claim of innocence, because a buyer with no suspicion has no reason to disguise what the goods cost.¹²

Because the element looks to this defendant's actual belief, an honest conviction that the goods were legitimate defeats it even when a prudent buyer would have judged otherwise. A defendant who mistakenly took the goods to be lawful lacks the required mental state, though the circumstances would have led a careful person to suspect theft.¹³ What a reasonable buyer would have thought remains evidence, and its force is practical: when the defendant's story of innocence is one that no sensible buyer could have accepted, the jury may infer that the defendant never honestly held it.¹⁴ That inference runs from the facts to the defendant's mind, and the jury remains free to reject it.

Knowledge or belief must also attach to the right fact, which is that the property was stolen. In United States v. Schultz the federal receiving statute required knowing the goods to have been stolen, and the court observed that proof the defendant knew antiquities had been smuggled out of Egypt would still leave a jury question whether he knew he was dealing in stolen goods.¹⁵ Awareness that goods are contraband or irregular in some other way is not awareness that they were taken from an owner. The defendant need not, however, know that receiving stolen goods is itself a crime. In Dixon v. United States the Court explained that knowingly ordinarily requires only knowledge of the facts that make up the offense, and the same division between facts and legal consequences fits this element.¹⁶

The mental state must exist when the defendant performs the act charged, because the Code joins it to that act: the defendant purposely receives, retains, or disposes of the goods while knowing or believing them stolen.¹⁷

Learning the truth afterward therefore defeats a charge of receiving, but it does not necessarily end the buyer's exposure, because the Code treats retaining as a separate act, and a buyer who learns the goods are stolen and purposely keeps them is in the position that clause addresses.¹⁸

Proving Knowledge from Other Acts

Knowledge is a private state of mind, and a receiving defendant who claims to have thought the goods were legitimate will rarely contradict that account on the stand. The prosecution's natural response is to show what else the defendant did, because a person's other dealings reveal what that person understood about the people supplying the goods. That response collides with a general rule of evidence. Federal Rule of Evidence 404(b) bars evidence of other crimes, wrongs, or acts when it is offered to prove character in order to show that the person acted in conformity with it, yet the same rule permits such evidence for other purposes, including motive, opportunity, intent, preparation, plan, knowledge, identity, and absence of mistake or accident.²⁰ Knowledge sits on that list, and it is the element a receiving defendant most often contests. The rest of this section shows how the prosecution uses other acts to reach knowledge and where the law stops that use.

In Huddleston v. United States the defendant was charged under federal law with selling and with possessing stolen property in interstate commerce, based on a shipment of blank Memorex videocassette tapes. A trailer holding more than 32,000 of the tapes had been stolen from a truck yard in Illinois, and within days of the theft Huddleston contacted the manager of a rent-to-own store in Michigan, asked her help in selling a large number of tapes, assured her they were not stolen, and offered them in lots of at least 500 for $2.75 to $3 each, when each tape had cost $4.53 to manufacture.²¹ About 5,000 tapes were sold through that arrangement. Nobody disputed that the tapes were stolen, so the only material issue at trial was whether Huddleston knew it.²² He testified that a man named Leroy Wesby supplied the tapes and the other merchandise, represented all of it as legitimately obtained, and paid him on commission, and Huddleston denied knowing that any of it was stolen.²³

To answer that defense the government offered two other pieces of evidence. A record store owner testified that Huddleston had offered him new twelve-inch black-and-white televisions at $28 apiece, said he could obtain several thousand, and then sold him 20 sets and later 18 more. An undercover FBI agent testified that Huddleston offered him 28 refrigerators, 2 ranges, and 40 icemakers for $8,000, though the Amana appliances were worth about $20,000 and were part of a stolen shipment.²⁴ The district court admitted the evidence under Rule 404(b) as clearly relevant to knowledge, and it told the jury to use the evidence only to decide whether Huddleston knew the goods were stolen and not to judge his character.²⁵ The jury convicted him on the possession count only.²⁶

The reason this evidence qualifies lies in the chain of inference it supports. A single sale of cheap tapes could have an innocent explanation, such as an overstock or a liquidation, and a seller might honestly accept a supplier's word that the goods were legitimate. A seller who is offered tapes, then televisions, then refrigerators and appliances by the same supplier, each in quantity and each priced far below its worth, has a much harder time explaining why none of it raised a question. The government's theory, as the Court described it, was that a series of sales of stolen merchandise from the same suspicious source would be strong evidence that the seller was aware each item, including the tapes, was stolen.²⁷ Each additional sale makes the innocent account less likely, and the jury reaches its conclusion by reasoning about the defendant's dealings with that source. The evidence keeps its footing only while the jury can reach knowledge without passing through character, and the instruction confining the sales to the question of knowledge reinforces that limit.

The televisions raise a further problem, because their sale proves anything about the tapes only if the televisions were themselves stolen. A sale of lawfully obtained televisions says nothing about what Huddleston understood of his supplier.²⁸ Huddleston argued that the government had to prove that fact to the judge before the jury could hear the testimony, and the Sixth Circuit first reversed because the government had not shown by clear and convincing evidence that the televisions were stolen, then affirmed on rehearing under a preponderance standard.²⁹ The Supreme Court held that the trial court need not make that preliminary finding, and that the evidence goes to the jury if there is sufficient evidence to support a jury finding that the defendant committed the similar act.³⁰ The judge therefore checks for sufficiency and not for persuasiveness. If no sufficient evidence supported a finding that the televisions were stolen, they would not have been a similar act at all, and the link to knowledge would fail. Likewise, had the government offered the other sales only to show that Huddleston is the sort of person who deals in stolen goods, with no tie to a disputed issue such as knowledge, Rule 404(b) would have barred them.

Two further limits keep this method from becoming the propensity inference the Rule forbids. The first concerns how much the other acts matter to the case. Their probative force is highest when the defendant has put knowledge in dispute, as when a retailer who admits taking the goods claims only that he had no idea they were stolen, because the prosecution may then rebut with other goods from the same supplier delivered without a bill of sale, far below market price, in large volume, or after hours.³¹ The force drops when the defendant denies the act itself, because other sales then bear on little except disposition. The second limit is that the judge still weighs probative value against the danger of unfair prejudice, confusion, and delay under Rule 403 and may exclude the evidence if that danger substantially outweighs its value.³² The other transactions must also carry their own marks of suspicion, since the prosecution needs enough evidence for the jury to conclude that the defendant understood those other goods to be stolen.³³

Other conduct surrounding the transaction can serve the same function. In the television example from earlier in this chapter, the dealer Rob admitted receiving twenty-five sets and claimed he had no suspicion, but testimony that he paid $10,000 and recorded $25,000 in his books undercuts that claim, and the testimony is admissible as proof of a substantive fact in the case and not merely as an attack on Rob's credibility.³⁴ The other listed purposes in Rule 404(b) work in the same way, because each supports an inference about conduct or state of mind without assuming a bad character.³⁵

The prohibition that Rule 404(b) preserves appears in Michelson v. United States, and the contrast with Huddleston shows where the line falls. The Court explained that courts in the common-law tradition almost unanimously forbid the prosecution from showing a defendant's prior trouble with the law, specific criminal acts, or ill name in its case in chief, even though such facts might logically suggest a probable perpetrator, because evidence of that kind weighs too heavily with the jury and tends to produce confusion, unfair surprise, and undue prejudice.³⁶ A 1920 arrest for receiving stolen goods figured in that case, but the trial was for bribery, and the arrest was put to the defendant's character witnesses only because the defendant had called them to testify to his good reputation.³⁷ What separates the two cases is the link to a disputed issue. The old arrest in Michelson bore on no question about what the defendant knew of particular goods, while the televisions and appliances in Huddleston bore directly on the only issue the jury had to decide.

The Dealer Presumption

Proof of knowledge is where receiving prosecutions most often stall, and the Code answers that problem for one class of defendant with a presumption. Section 223.6(2) provides that the requisite knowledge or belief is presumed in the case of a dealer who meets one of three listed conditions.³⁹ A dealer is a person in the business of buying or selling goods, and the definition expressly includes a pawnbroker.⁴⁰ A presumption of this kind lets the factfinder treat knowledge or belief as present once the prosecution proves the dealer's status and one triggering fact, so the prosecution is spared the nearly impossible task of producing direct evidence of what the dealer thought.

The rule is confined to dealers because of what a dealer's trade involves. A person who buys and sells goods for a living learns what those goods are worth and sees a steady flow of merchandise, some of it stolen, so a dealer is poorly placed to claim surprise at a suspicious deal. The incentive reason is subtler. Receivers who work through a business front seldom know that goods are stolen in the way a witness could swear to in court, because the business depends on keeping up a respectable appearance and on buying from the thief as if the transaction were ordinary.⁴¹ A rule demanding proof of that kind of knowledge would reward the dealer who takes care never to ask questions. The dealer is also the person best able to explain where the goods came from and to keep records, so asking the dealer for an explanation, once the facts point strongly toward theft, imposes a fair burden.

The first two triggers rest on pattern. One stolen item in a dealer's inventory could be a single unlucky purchase, but property that came from two different owners in separate thefts shows that the dealer's stock is being fed by theft, and an innocent explanation becomes much harder to sustain. The second trigger works through experience: a dealer who took stolen goods within the previous year has seen how they arrive and cannot easily claim that the next batch looked ordinary. The one-year window ties that inference to recent experience, since a transaction long past says little about what the dealer understands now.

The third trigger works through price and carries two internal limits. The dealer must be a dealer in property of the sort received, because a jeweler's feel for what watches are worth gives the jeweler no special insight into the value of, say, construction equipment. The dealer must also know that the price is far below reasonable value, and the knowledge this clause demands concerns the price and not the goods' stolen status. The clause thus turns awareness of a bargain-basement price into a presumption of awareness of theft. In the discount television example from earlier in this chapter, the dealer Rob paid only $10,000 for twenty-five unused sets while recording $25,000 in his books, and the prosecutor needed a former employee's testimony to build the inference that Rob suspected the sets were stolen.⁴⁵ Had the evidence also shown that Rob knew $10,000 was far below what such sets are worth, the third trigger would have given the prosecution an additional route to the mental element, because Rob sells discount goods and televisions are goods of the sort he handles.

The three triggers share one structure. Each is a fact about the dealer's own trade, whether a supply that keeps turning out to be stolen, recent experience with stolen goods, or a price the dealer knows is too good to be honest, and each makes ignorance hard to believe. The presumption can be rebutted, so a dealer who produces a credible explanation for the pattern or the price can still defeat the inference. Two limits keep it from reaching further than its reason. The first is that the presumption covers only the mental element. The prosecution must still prove that the defendant purposely received, retained, or disposed of movable property of another that was stolen at that moment, and that no purpose to restore the property to the owner is present.⁴⁶ The second is that the presumption is limited to dealers. A later part of this chapter on grading refers to a receiver who is in the business of buying or selling stolen property, a different concept that raises the grade of the offense and does not supply knowledge.⁴⁷