United States v. Shaw

Whether “scheme to defraud a financial institution” in subsection (1) of the bank-fraud statute, 18 U.S.C. §1344, requires proof of a specific intent not only to deceive, but also to cheat a bank?

After impersonating a bank customer in order to defraud a customer’s account using PayPal, Petitioner was charged with violating the bank-fraud statute 18 U.S.C. §1344(1). At trial, Petitioner sought a jury instruction that the government had to prove that Petitioner specifically intended to make the bank the principal target of the fraud, as opposed to the PayPal account holder. The district court refused to give the instruction, finding instead that 1344(1) only required proof that the defendant intended to deceive the bank, not that he also intended the bank to bear the loss. On appeal, the Ninth Circuit refused to hold that the bank needed to be the intended victim of the financial fraud. Furthermore, the Ninth Circuit’s case law establishes that § 1344(1)’s element of intent “to defraud,” does not include intent to financially victimize the bank. Therefore, the district court’s conviction was affirmed by Ninth Circuit. Petitioner alleges that the Ninth Circuit’s minority view decision only accentuated a split in the Courts of Appeals on an issue of substantial practical importance. Petitioner alleges that nine courts have held, contrary to the Ninth Circuit’s decision, that §1344(1)’s “scheme to defraud” requires proof of an intent to deceive and cheat a bank. Petitioner also alleges that the Ninth Circuit minority-view decision is contrary to the Court’s jurisprudence, which held that the essence of traditional fraud is the intent to cheat another via deception.