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Shaw v. United States
United States Supreme Court
December 12, 2016
LAWRENCE EUGENE SHAW, PETITIONER
October 4, 2016
OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
Petitioner Shaw used identifying numbers of a bank account
belonging to bank customer Hsu in a scheme to transfer funds
from that account to accounts at other institutions from
which Shaw was able to obtain Hsu's funds. Shaw was
convicted of violating 18 U.S.C. §1344(1), which makes
it a crime to "knowingly execut[e] a scheme ... to
defraud a financial institution." The Ninth Circuit
1. Subsection (1) of the bank fraud statute covers schemes to
deprive a bank of money in a customer's deposit account.
Shaw's arguments in favor of his claim that subsection
(1) does not apply to him because he intended to cheat only a
bank depositor, not a bank, are unpersuasive.
First, the bank did have property rights in Hsu's bank
deposits: When a customer deposits funds, the bank ordinarily
becomes the owner of the funds, which the bank has a right to
use as a source of loans that help the bank earn profits.
Sometimes, the contract between the customer and the bank
provides that the customer retains ownership of the funds and
the bank only assumes possession; even then, the bank has a
property interest in the funds because its role is akin to
that of a bailee. Hence, for purposes of the bank fraud
statute, a scheme fraudulently to obtain funds from a bank
depositor's account normally is also a scheme
fraudulently to obtain property from a "financial
institution, " at least where, as here, the defendant
knew that the bank held the deposits, the funds obtained came
from the deposit account, and the defendant misled the bank
in order to obtain those funds.
Second, Shaw may not have intended to cause the bank
financial harm, but the statute, while insisting upon "a
scheme to defraud, " demands neither a showing that the
bank suffered ultimate financial loss nor a showing that the
defendant intended to cause such loss. This Court has found
no case that interprets the statute as Shaw does. Cf.
Carpenter v. United States, 484 U.S. 19, 26.
Third, that Shaw may have been ignorant of relevant
bank-related property law is no defense to criminal
prosecution for bank fraud. Shaw knew that the bank possessed
Hsu's account, Shaw made false statements to the bank,
Shaw believed that those false statements would lead the bank
to release from that account funds that ultimately and
wrongfully ended up with Shaw, and the bank in fact possessed
a property interest in the account. These facts are
sufficient to show that Shaw knew that he was entering into a
scheme to defraud the bank even if he was not aware of the
niceties of bank-related property law. Cf. Pasquantino v.
United States, 544 U.S. 349, 355-356.
Fourth, Shaw mistakenly contends that the statute requires
the Government to prove not just that he acted with the
knowledge that he would likely harm the bank's
property interest but also that such was his
purpose. This Court has found no relevant authority
supporting the view that a statute making criminal the
"knowin[g] execution of] a scheme ... to
defraud" requires something more than knowledge.
Allison Engine Co. v. United States ex rel. Sanders,
553 U.S. 662, 665-668; Tanner v. United States, 483
U.S. 107, 110-112; United States v. Cohn, 270 U.S.
339, 343; and Bridges v. United States, 346 U.S.
209, 221-222, distinguished.
Fifth, subsection (2) of the bank fraud statute, which makes
criminal the use of "false or fraudulent pretenses"
to obtain "property . . . under the custody or control
of a bank, may overlap with subsection (1), but it does not
do so completely. Thus, it should not be read as excluding
from subsection (1) applications that would otherwise fall
within the scope of subsection (1), such as the conduct at
issue in this case. See Loughrinv. United States,
573 U.S.__, __, n. 4.
Finally, because the bank fraud statute is clear enough, the
rule of lenity is not implicated. Pp. 2-8.
2. With regard to the parties' dispute over whether the
District Court improperly instructed the jury that a scheme
to defraud a bank must be one to deceive the bank or
deprive it of something of value, instead of one to deceive
and deprive, the Ninth Circuit is left to determine
whether that question was properly presented and if so,
whether the instruction given is lawful, and, if not, whether
any error was harmless in this case. Pp. 8-9.
781 F.3d 1130, vacated and remanded.
BREYER, J., delivered the opinion ...
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