Loughrin v. United States
The Court ruled that a man who forged stolen checks and cashed them at Target could be convicted of bank fraud even though he never tried to trick a bank directly — only the store.
The decision confirms that this part of the federal bank fraud law reaches schemes aimed at getting bank-controlled money through a false check, so long as the fake check is the kind that would normally make its way to a bank for payment, without requiring proof the defendant meant to deceive the bank itself.
“Section 1344(2)'s "by means of" language is satisfied when, as here, the defendant's false statement is the mechanism naturally inducing a bank (or custodian of bank property) to part with money in its control.”
The Court's key limiting principle on how broadly the bank fraud statute reaches.
How it got here: A jury convicted Loughrin after the trial court refused his requested instruction; the Tenth Circuit affirmed, and the Supreme Court took the case to resolve a circuit split.
The Case in Depth
What happened
Kevin Loughrin stole checks from residential mailboxes, altered or forged them, and used them to buy merchandise at Target stores, then returned the goods for cash refunds. All six checks were drawn on federally insured banks. Federal prosecutors charged him with bank fraud, and at trial he argued that a conviction required proof he specifically intended to deceive a bank rather than the store.
The question before the Court
Does the federal bank fraud law require prosecutors to prove a defendant specifically meant to deceive a bank, or is it enough that he tricked someone else out of money a bank controlled?
Why it matters
Prosecutors can bring federal bank fraud charges against people who use forged or altered checks to swindle stores, landlords, or other third parties, not just those who lie directly to a bank teller. At the same time, the ruling keeps ordinary local scams — like selling a fake handbag and getting paid by a valid check — out of federal court, because the fraud there has no real connection to the banking system.
What changes now
This is a final merits decision resolving the legal question nationwide, so no further proceedings on the statutory issue are needed; Loughrin's conviction stands. Lower courts must now apply the Court's 'by means of' limitation when deciding which check-based frauds count as federal bank fraud versus purely local scams, a line the concurring justices suggested may still need further clarification in future cases.
What this does not decide
The Court left open exactly how far the 'by means of' limitation reaches in other fact patterns, and Justice Scalia's concurrence explicitly argued the majority's test for what counts as a sufficiently direct connection to a bank was not settled or necessary to decide this case. The decision also does not require proof the scheme created any actual risk of financial loss to a bank.
Concurrences and dissents
How the Justices voted
Majority (6). Justice Kagan (author), joined by Justice Roberts, Justice Kennedy, Justice Ginsburg, Justice Breyer, and Justice Sotomayor.
Separate writings (3). Justice Scalia (author of a concurrence (in part)), joined by Justice Thomas.
Concurrence in part — Justice Scalia
Justice Scalia agreed that neither intent to defraud a bank nor risk of loss to a bank is required, but refused to join the majority's specific test for the 'by means of' element, arguing the Court's requirement that a false statement 'naturally induce' a bank to part with money was not adequately briefed or necessary to the decision. He offered several hypotheticals arguing the majority's directness test does not match ordinary usage of 'by means of,' and would have left defining that limit for a future case.
Concurrence in part — Justice Alito
Justice Alito agreed with the Court's bottom-line holding but objected to language in the opinion suggesting the statute requires a defendant to act with the specific purpose of obtaining bank property. He argued this confuses the objective of the criminal scheme with the defendant's own mental state, and that the statute's actual mens rea requirement is only that the defendant act 'knowingly,' not with purpose. Read the full partial concurrence →
How the Court got there
The legal reasoning, step by step
- The Court read the bank fraud statute's second clause on its own terms: it requires only that the defendant intend to obtain bank-owned or bank-controlled property, and that this be accomplished 'by means of' a false statement — nothing in the text separately demands an intent to deceive the bank itself.
- The Court applied ordinary rules of statutory interpretation, including the principle that the word 'or' joining two clauses signals they carry separate meanings, and that courts should avoid readings that make one clause a redundant subset of another.
- The Court distinguished its earlier decision in McNally v. United States, which read similar 'or' language in the mail fraud statute as describing a single offense, by pointing to differences in the two statutes' formatting, drafting history, and the fact that lower courts already read the bank fraud language disjunctively when Congress enacted it.
- To address concerns that reading the clause this broadly would federalize routine local scams paid for by check, the Court identified a built-in limit: the false statement must be the mechanism that naturally causes a bank or its custodian to hand over the money, not merely a but-for cause somewhere in the chain of events.
- Applying that limit to the facts, the Court concluded that Loughrin's forged checks satisfied the requirement because a merchant like Target would ordinarily forward such checks to a bank for payment, giving the scheme the necessary real connection to the banking system.
Doctrinal impact
Cases affected by this decision
Distinguishes McNally v. United States (483 U.S. 350)
The Court declined to apply McNally's reading of similar mail fraud language to the bank fraud statute, citing textual and historical differences.