Appeal from a conviction by a jury in the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge), for conspiring to, and filing, false claims with the IRS, bank fraud, aggravated identity-theft, and identity- theft.
The opinion of the court was delivered by: Winter, Circuit Judge:
Before: WINTER, LYNCH, and CARNEY, Circuit Judges.
We affirm in part, vacate in part, and remand for resentencing.
11 Felix Nkansah appeals from his conviction after a jury trial 12 before Judge Rakoff for: (i) conspiracy to file false claims 13 with the Internal Revenue Service ("IRS") in violation of 18 14 U.S.C. § 286 ("Count One"); (ii) filing false claims with the IRS 15 in violation of 18 U.S.C. § 287 ("Count Two"); (iii) bank fraud 16 in violation of 18 U.S.C. § 1344 ("Count Three"); (iv) aggravated 17 identity-theft related to the bank fraud charged in Count Three 18 in violation of 18 U.S.C. § 1028A(a)(1), (c)(5) ("Count Four"); 19 and (v) identity-theft in violation of 18 U.S.C. § 1028(a)(7), 20 (b)(1) ("Count Five").
21 We hold that there was insufficient evidence for appellant's 22 conviction on Count Three and that his conviction on Counts Three 23 and Four must, therefore, be vacated. We find appellant's other 24 arguments to be without merit but do not address his claim 25 regarding the substantive reasonableness of his sentence.
27 Viewing the evidence in the light most favorable to the 28 government, see United States v. Chavez, 549 F.3d 119, 124 (2d 29 Cir. 2008), appellant was part of a group that, beginning in 30 early 2005 through August 2008, stole names, dates of birth, and 31 social security numbers from foster care, hospital, and childcare 32 databases. This information was used to file thousands of 1 fraudulent tax returns in the victims' names with fictitious 2 income figures, resulting in tax refunds either sent as a check 3 to the address of a group member or electronically deposited into 4 a bank account controlled by a group member. The group, 5 expecting about half the refunds to be approved by the IRS, filed 6 for $2.2 million in fraudulent refunds and ultimately obtained 7 $536,167. When a refund was received in the form of a check made 8 out to an identity-theft victim, a group member would forge the 9 payee's signature along with an endorsement over to the group 10 member. The particular group member would deposit the check into 11 a controlled bank account and would soon thereafter withdraw the 12 money.
13 Appellant was linked to deposits at Commerce Bank, HSBC, and 14 Bank of America. A search of his home and car revealed stolen 15 identity information, tax refund correspondence to identity-theft 16 victims sent to appellant's address, and a computer with a 17 partially-completed tax refund made out in an identity-theft 18 victim's name. Other evidence linked nearly 70 fraudulent tax 19 returns to an IP address registered to appellant. On the same 20 day, one of appellant's bank accounts received two federal tax 21 refunds of several thousand dollars each. Evidence linked 22 appellant to checks made out to identity-theft victims and 23 endorsed over to a "William K. Arthur." These checks were 24 deposited into a Bank of America account that appellant 25 controlled under that name.
1 Appellant was arrested on September 9, 2008 and ultimately 2 charged with the five counts described above. Count Five of the 3 indictment for identity-theft did not include a reference to 4 interstate commerce, an element of the crime for which he was 5 convicted. While on bail prior to trial, appellant fled to 6 Canada where he was later apprehended and returned to the United 7 States. After an aborted plea deal, he was found guilty by a 8 jury on January 29, 2010, on all five counts. He was sentenced 9 principally to 51 months' imprisonment on each of Counts One 10 through Three and Five to run concurrently and 24 months' 11 imprisonment on Count Four to run consecutively to the other 12 counts.
13 At trial, the government sought to show that the banks in 14 which deposits were made by the group were at a risk of loss. 15 Special Agent Peck of the Secret Service testified: 16 When the bank transmits the funds to be 17 collected and it comes back as not accurate 18 or a counterfeit check or a fraudulent check, 19 they no longer will get those funds back and 20 they, most of the time, have already given 21 out the funds to a payee or someone else. It 22 is withdrawn.
24 He also testified that Commerce Bank suffered financial losses 25 "for not just Mr. Nkansah himself but the combined total in the 26 case" as a result of the scheme. However, when pressed about 27 specific losses suffered by banks as a result of appellant's 28 specific use of accounts, Agent Peck could not confirm that such 29 losses occurred. He also testified that while he thought that 30 such banks bore the loss from accepting for deposit fraudulently 1 obtained Treasury checks, he was "unsure" if that theory was 2 correct.
3 During jury deliberations, the government inadvertently 4 provided the jury with documents that had not been introduced 5 into evidence. In particular, a standard form proffer agreement 6 was included. Upon being notified of this by the government, the 7 district court sent the courtroom deputy into the jury room, 8 which had already been vacated for the evening, to retrieve the 9 exhibit. It was still in the manila folder in which it had been 10 originally housed. The folder was still inside the Redweld in 11 which it had been given to the jury. Because of the 12 circumstances surrounding the exhibit's location, the court 13 concluded that it was likely that the jury had not seen the 14 proffer agreement. The court further found that, even if the 15 jury had seen the proffer, it contained nothing in evidence and, 16 in any event, nothing material to any issue not already 17 established in the case -- usually from Nkansah's own testimony. 18 Other documents mistakenly given to the jury were found to be 19 similarly duplicative of evidence already before the jury.
21 We address each of appellant's challenges in turn. 22 a) Bank Fraud Conviction
23 We turn first to the sufficiency of the evidence regarding 24 appellant's bank fraud conviction. 5 1 We note the familiar standard that sufficiency challenges 2 are reviewed de novo, United States v. Leslie, 103 F.3d 1093, 3 1100 (2d Cir. 1997), but a defendant challenging the sufficiency 4 of the evidence bears a "heavy burden," United States v. Gaskin, 5 364 F.3d 438, 459 (2d Cir. 2004) (internal quotation marks 6 omitted). Appellant's claim, however, turns largely upon the 7 legal definition of the defendant's state of mind that must be 8 proven for purposes of a bank fraud conviction.
9 The federal bank fraud statute, 18 10 U.S.C. § 1344, provides: 11 Whoever knowingly executes, or attempts to 12 execute, a scheme or artifice -- 13 (1) to defraud a financial institution; 14 or 15 (2) to obtain any of the moneys, funds, 16 credits, assets, securities, or other 17 property owned by, or under the custody 18 or control of, a financial institution, 19 by means of false or fraudulent 20 pretenses, representations, or promises; 21 shall be fined not more than $1,000,000 or 22 imprisoned not more than 30 years, or both.
24 Appellant knowingly used deception with regard to the bank 25 accounts he controlled: (i) he opened them in the names of other 26 people as well as the fictional William K. Arthur; and (ii) he 27 deposited in the accounts checks fraudulently obtained from the 28 United States Treasury causing the bank to seek reimbursement 29 from the Treasury. Appellant argues, however, that the 30 government was required to prove that he intended to victimize 31 the banks as opposed to the Treasury. He claims that there was 32 no evidence of such an intent or even that the banks had actually 1 lost money. In essence, he argues that the banks were no more 2 victims of his deceptions than a bank in which someone opens an 3 account under a false identity to conceal funds from a spouse or 4 business partner.
5 Appellant is correct that the bank fraud statute is not an 6 open-ended, catch-all statute encompassing every fraud involving 7 a transaction with a financial institution. Rather, it is a 8 specific intent crime requiring proof of an intent to victimize a 9 bank by fraud. See United States v. Rubin, 37 F.3d 49, 54 (2d 10 Cir. 1994). "[A] federally insured or chartered bank must be the 11 actual or intended victim of the scheme." United States v. 12 Stavroulakis, 952 F.2d 686, 694 (1992); see also United States 13 v. Blackmon, 839 F.2d 900, 906 (2d Cir. 1988) ("Where the victim 14 is not a bank and the fraud does not threaten the financial 15 integrity of a federally controlled or insured bank, there seems 16 no basis in the legislative history for finding coverage under 17 section 1344(a)(2)."); S. Rep. No. 98-225, at 377 (1983), 18 reprinted in 1984 U.S.C.C.A.N. 3182, 3517 (bank fraud Statute 19 designed to "assure a basis for federal prosecution of those who 20 victimize these banks through fraudulent schemes.")
Therefore, 21 convictions for bank fraud are limited to situations where "the 22 defendant (1) engaged in a course of conduct designed to deceive 23 a federally chartered or insured financial institution into 24 releasing property; and (2) possessed an intent to victimize the 25 institution by exposing it to actual or potential loss." United 26 States v. Barrett, 178 F.3d 643, 647-48 (2d Cir. 1999).
1 Our concurring colleague takes serious issue with the need 2 to prove intent to harm a financial institution, albeit he 3 concedes that this element is well-established in our caselaw. 4 We note only that the government has argued none of the points he 5 makes and begins its discussion of this issue with the following 6 statement: "The bank fraud statute was enacted to 'protect the 7 financial integrity of [federally guaranteed financial] 8 institutions, and . . . assure a basis for Federal prosecution of 9 those who victimize these banks through fraudulent schemes.' S. 10 Rep. No. [98-225], [at] 377 (1983), reprinted in 1984 11 U.S.C.C.A.N. 3182, 3517." Brief of Appellee at 16, United States 12 v. Gyanbaah (Nkansah), 10-2441 (2d Cir. Apr. 13, 2011). The 13 ensuing discussion then goes on to underline the need to prove 14 the intent to harm a financial institution.*fn1
15 The government had to prove beyond a reasonable doubt that 16 appellant intended to expose the banks to losses.*fn2 Were that1 intent proven, the actuality, or even possibility, of losses 2 would be irrelevant. However, there is no direct evidence of 3 appellant's intent to victimize the banks at which he opened 4 accounts under the name of others ...