United States v. Shaw

885 F.3d 1217

UNITED STATES of America, Plaintiff–Appellee,

v.Lawrence Eugene SHAW, Defendant–Appellant.

No. 13-50136

United States Court of Appeals, Ninth Circuit.

Filed March 27, 2018

James H. Locklin, Deputy Federal Public Defender; Hilary L. Potashner, Federal Public Defender; Federal Public Defender’s Office, Los Angeles, California; for Defendant–Appellant.

Elana Shavit Artson, Assistant United States Attorney; Tracy L. Wilkison, Executive Assistant United States Attorney; Lawrence S. Middleton, Chief, Criminal Division; Sandra R. Brown, United States Attorney; United States Attorney’s Office, Los Angeles, California; for Plaintiff–Appellee.

Before: Mary M. Schroeder, Jacqueline H. Nguyen, and Andrew D. Hurwitz^* , Circuit Judges.

SCHROEDER, Circuit Judge:

This case, involving a conviction for bank fraud in violation of 18 U.S.C. § 1344(1), is before us on remand from the Supreme Court. See Shaw v. United States , ––– U.S. ––––, 137 S.Ct. 462, 196 L.Ed.2d 373 (2016). Shaw had created a scheme to siphon off the funds in the account of a bank depositor, Stanley Hsu, through the use of an online payment and money transfer service, PayPal. The losses were eventually borne by Hsu and PayPal, not the bank, prompting Shaw to argue that he had not defrauded the bank within the meaning of the statute. See id. at 466.

We affirmed the conviction, and the Supreme Court agreed that a fraudulent scheme to obtain money in a depositor’s account violates the statute. The Court also rejected the defendant’s theory that the government must show that the bank itself suffered a financial loss or that the defendant intended the bank to suffer a financial loss. See id. at 466–68. We had reached the same conclusion. See United States v. Shaw , 781 F.3d 1130, 1135–36 (9th Cir. 2015).

The Supreme Court remanded the case, however, on an issue we had not considered. In the Supreme Court, Shaw challenged the disjunctive form of the district court’s instruction to the jury that a "scheme to defraud" within the meaning of the statute means a defendant must intend to "deceive, cheat or deprive" the bank of something of value. Shaw , 137 S.Ct. at 469. The parties agreed in the Supreme Court that a conviction under subsection (1) requires both a scheme "to deceive the bank and deprive it of something of value." Id. Shaw argued in the Supreme Court that because the instruction was in the disjunctive, the jury was allowed to convict if it found the defendant intended only to deceive the bank and not to deprive it of something of value. Id. The Court remanded to us to consider whether this argument was fairly presented below, "and, if so, whether the instruction is lawful, and, if not, whether any error was harmless in this case." Id. at 470.

We called for supplemental briefs. Not surprisingly, Shaw contends he preserved such an instructional error argument in the district court and to us, and the government maintains he did not.

We have carefully reviewed the record. It shows that Shaw did object to the instruction given by the district court. But the objection was not on the ground he urged in the Supreme Court—that the instruction allowed the jury to convict if it found only an intent to deceive the bank without regard to an intent to deprive it of something of value. Rather, Shaw argued in the district court and on appeal to us that the instruction erroneously allowed the jury to convict for stealing Hsu’s money, not the bank’s. This was consistent with the position Shaw advanced all the way to the Supreme Court—that the government had to prove an intent to cheat the bank and not the depositor. As the Supreme Court has now clarified, an intent to obtain money from a depositor’s bank account is sufficient to constitute bank fraud under 18 U.S.C. § 1344(1). It is not necessary to show an intent to cause the bank itself a financial loss. See id. at 467.

Accordingly we conclude that the argument the Supreme Court identified for consideration on remand was not fairly presented...