Summary
The Supreme Court held that 18 U.S.C. § 1344(2), the federal bank fraud statute’s second clause, does not require the Government to prove that the defendant intended to defraud a financial institution. The statute requires intent to obtain bank property and that the acquisition occur by means of a false or fraudulent representation. The Court affirmed the Tenth Circuit’s judgment sustaining Kevin Loughrin’s convictions.
Topics
Practice areas
Questions Presented
- Whether 18 U.S.C. § 1344(2) requires the Government to prove that the defendant intended to defraud a financial institution.
- Whether § 1344(2) requires the Government to prove that the defendant's scheme created a risk of financial loss to a bank.
- How the phrase "by means of false or fraudulent pretenses, representations, or promises" limits the scope of § 1344(2).
Holdings
- Section 1344(2) does not require the Government to prove that the defendant intended to defraud a financial institution. The provision requires a knowing scheme or attempt to obtain property owned by or under the custody or control of a financial institution by means of false or fraudulent pretenses, representations, or promises.
- The false or fraudulent statement must be the mechanism naturally inducing a bank or custodian of bank property to part with money in its control; a merely incidental or tangential connection is insufficient. Presenting an altered or forged check to a merchant satisfies this requirement when the check would ordinarily be forwarded to a bank for payment.
- Section 1344(2) does not require proof that the defendant's scheme exposed a bank to a risk of financial loss.
Key quotations
“But the text of §1344(2) precludes Loughrin’s argument.” (4)
“We have often noted that when “Congress includes particular language in one section of a statute but omits it in another”—let alone in the very next provision—this Court “presume[s]” that Congress intended a difference in meaning.” (6)
“That phrase typically indicates that the given result (the “end”) is achieved, at least in part, through the specified action, instrument, or method (the “means”), such that the connection between the two is something more than oblique, indirect, and incidental.” (11-12)
“The premise of Loughrin’s federalism argument thus collapses.” (14)
Factual background
Loughrin stole checks from residential mailboxes, altered or forged them, and made them payable to Target. He used the checks to purchase merchandise and then returned the merchandise for cash. The checks were drawn on accounts at federally insured banks, and Target either detected the fraud or deposited the checks, resulting in attempted or completed bank payments.
Procedural history
Loughrin was charged after using forged or altered checks to purchase merchandise from Target and return it for cash. The district court declined to instruct the jury that conviction under § 1344(2) required an intent to defraud a financial institution, and the jury convicted him on all six counts. The Tenth Circuit affirmed, holding that intent to defraud a bank was required only under § 1344(1). The Supreme Court affirmed the Tenth Circuit.