Monday, December 12, 2016

Supreme Court Clarifies Bank Fraud Statute

In an unanimous decision, the Supreme Court in Shaw v. United States rejected defendant's argument that section 1344(1) "does not apply to him because he intended to cheat only a bank depositor, not a bank."  The Court found that the defendant's scheme to cheat another "was also a scheme to deprive the bank of certain property rights."  That said, the Court noted that there is no need to show "that the defendant intend that the victim bank suffer" a financial harm. The Court summed up stating:

"The statute is clear enough that we need not rely on the rule of lenity. As we have said, a deposit account at a bank counts as bank property for purposes of subsection (1).  The defendant, in circumstances such as those present here, need not know that the deposit account is, as a legal matter, characterized as bank property.  Moreover, in those circumstances, the Government need not prove that the defendant intended that the bank ultimately suffer monetary loss.  Finally, the statute as applied here requires a state of mind equivalent to knowledge, not purpose." (citations omitted)

But the Court does leave open one important question - the jury instruction. The defendant argued that the instruction allowed for a guilty finding for one who deceives the bank but not one who "deprive[s]" the bank of anything of value. The Court stated that it is necessary that the "scheme be one to deceive the bank and deprive it of something of value." Sending it back to the 9th Circuit, the Supreme Court instructs the lower court "to determine whether the question was fairly presented to that court and, if so, whether the instruction is lawful, and, if not, whether any error was harmless in this case."    

(esp)

https://lawprofessors.typepad.com/whitecollarcrime_blog/2016/12/supreme-court-clarifies-bank-fraud-statute.html

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