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  • Stealing Money from a Bank Account Is “Defrauding a Financial Institution”

    Perhaps getting a bit too creative for his own good, Lawrence Shaw argued that his conviction under 18 U.S.C. sec. 1344(1), for “executing a scheme . . . To defraud a financial institution,” should be overturned because what he really did—steal information about a person’s bank account so he could take funds from that person’s account—did not defraud the bank itself, but rather just the person he stole from. The Court, in a unanimous opinion by Justice Breyer, slammed the door shut on that potential loophole, and affirmed the conviction, noting at the outset that the bank did indeed have “property rights” in a depositor’s funds, at minimum like a bailee. Even if the bank itself suffered no loss, the statute’s prohibition still applied. However, the Court granted Shaw a slight victory: he complained that his jury instruction might have led the jury to believe that he could be convicted under the statute without it being proven that his scheme was intended to deprive the bank of “something of value.” The Court vacated and remanded for further proceedings on the instruction, although noting that the Ninth Circuit could find that the error was harmless. Given the facts and the Court’s opinion, harmless error would seem likely.



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