Federal Bank Fraud: Defendant Need Not Intend to Defraud the Bank

Bank - Law Offices of Hope C. Lefeber

The U.S. Supreme Court, in Shaw v. United States, held that a violation of the federal bank fraud statute does not require a finding of intent to defraud the bank. In this case, Lawrence Shaw stole over $300,000 by using fraudulent personal information of another person to move money out of a Bank of America account into another account at another bank from which Shaw then withdrew the money. Shaw argued that he didn’t commit federal bank fraud because he didn’t intend to defraud a bank, only the person from whose account the money was stolen. The Supreme Court rejected that argument, stating that:

  1. the statute does not require the defendant to deprive the bank of its own property;
  2. that the bank had a property right in the depositor’s bank account; and
  3. that the bank owned the funds and could loan them to someone else, even if the depositor could also withdraw them.

In addition, the Supreme Court held that the bank fraud statute does not require an intent to cause a financial loss. The Supreme Court also held that the bank fraud statute expressly criminalizes a “knowing” execution of a scheme to defraud.

Although this case is a win for the government, a crack in the door was left open in that Shaw’s challenge to the jury instructions was remanded for the lower court to resolve. Shaw had argued that the instructions given to the jury were flawed in that they could have allowed the jury to convict him simply by finding that he had intended to deceive the bank, without more, when in fact he must have intended to both deceive the bank and deprive it of something of value.

Categories: Fraud