Shaw v. United States

Background

A man named Lawrence Shaw used a Bank of America customer's account numbers to transfer money from that customer's account into other accounts he controlled. The Government prosecuted Shaw under a federal law that criminalizes schemes to defraud a financial institution. Shaw argued the law did not apply because his target was the customer, not the bank, and because the banks ultimately suffered no unreimbursed monetary loss. The Ninth Circuit affirmed his conviction and the case came to the Court to decide whether the statute covers this kind of conduct.

Reasoning

The Court examined whether deposits count as bank property and what mental state the statute requires. It explained that banks ordinarily have property or possession rights in deposited funds, such that a scheme that fraudulently causes the bank to release customer deposits also deprives the bank of property. The Court said the law does not require proof that the bank suffered ultimate financial loss, nor that the defendant intended to cause that loss. It further held the defendant need only know he was deceiving the bank, not understand technical bank property rules.

Real world impact

This interpretation means prosecutors can charge people who trick banks into releasing customer funds even if the bank is later reimbursed or never loses money. Defendants cannot avoid liability by claiming ignorance of complex property-law classifications so long as they knew the bank held the account and they lied to the bank. The Court vacated the Ninth Circuit’s judgment and sent the case back for further proceedings, including possible review of the jury instruction question.