LOCATION: United States District Court for the District of Utah
DOCKET NO.: 13-316
DECIDED BY: Roberts Court (2010-2016)
CITATION: 573 US (2014)
GRANTED: Dec 13, 2013
ARGUED: Apr 01, 2014
DECIDED: Jun 23, 2014
Anthony A. Yang – for the Respondent
Kevin Russell – for the Petitioner
Facts of the case
Kevin Loughrin created a scheme to obtain cash by stealing checks from people’s outgoing mail, altering them to make purchases at Target, and returning the purchases for cash. When the scheme came to an end, he and Theresa Thongsarn were indicted on six counts of bank fraud, two counts of aggravated identity theft, and one count of possession of stolen mail. Loughrin moved to dismiss the case and alleged violations of the Speedy Trial Act; the district court denied the motion to dismiss. At trial, Loughrin requested that the jury instructions specify that the jury had to find that he had the intent to defraud a financial institution in order to find him guilty of bank fraud. The district court held that such an instruction was not necessary and declined to use it. Loughrin was convicted on all counts and sentenced to 36 months in prison. The U.S. Court of Appeals for the Tenth Circuit affirmed.
In order to find the defendant guilty of bank fraud, is the prosecution required to show that the defendant acted with intent to defraud the bank?
Media for Loughrin v. United States
Audio Transcription for Opinion Announcement – June 23, 2014 in Loughrin v. United States
Justice Kagan has our opinion this morning in Case 13-316, Loughrin versus United States.
A part of the federal bank fraud statute §1344(2) of the Federal Criminal Code makes it a crime to knowingly execute a scheme to obtain property owned by or under the custody of a bank by means of false or fraudulent pretenses.
In this case, we address whether a prosecution under that statute requires the Government to prove that the defendant intended to defraud a bank.
Petitioner Kevin Loughrin executed the fraud involving forged checks posing as a Mormon missionary, he would steal checks out of residential mailboxes, forge or alter the checks and use them to buy merchandise at a Target store by posing as the accountholder.
He would then walk back into the store and return the goods for cash.
Each of the six checks that formed the basis for the charges in this case was drawn on accounts at federally insured banks.
The Federal Government eventually caught up with Loughrin and charged him with six counts of bank fraud under 1344(2).
Loughrin asked the District Court to instruct the jury that to convict, they must find that he acted with intent to defraud a financial institution.
The District Court refused to give that instruction and the jury convicted Loughrin.
The Tenth Circuit affirmed.
Today, we also affirm.
Everyone agrees as do we that a prosecution under 1344(2) requires at least two things.
First, the defendant must intend to obtain bank property, and second, that result must be achieved by means of a false statement.
Loughrin would have us read in yet, a third element that the defendant must intend to defraud, in other words, to deceive the bank as opposed to some third party like Target.
But that requirement appears nowhere in the statute.
Importing it would prevent 1344(2) from applying the cases falling within the statute’s clear terms such as frauds directed against the third party who has custody of bank-owned property, and it would make 1344(2) merely a subset of 1344(1) which specifically prohibit schemes to defraud a bank.
The better rate to read those two clauses is as two separate prohibitions.
Loughrin argues that without an element of intent to defraud a bank, 1344(2) would apply to every minor fraud involving payment with a check even if the check is perfectly valid.
That he says would unduly expand the reach of federal criminal law into areas traditionally left to the States.
But his argument ignores a significant textual limit on 1344(2)’s reach.
The criminal must acquire a bank property by means of the misrepresentation.
That language limits the statute’s application to cases like this one in which the misrepresentation is made directly to or is likely to reach a federally insured bank.
The statute does not extend the schemes where the banks only involvement is the redemption of a valid check.
Justice Scalia has filed an opinion concurring in part and concurring in the judgment in which Justice Thomas has joined, Justice Alito has also filed an opinion concurring in part and concurring in the judgment.