4.18.1344 Bank Fraud, 18 U.S.C. § 1344(1), (2 See Statute

[Defendant] is charged with bank fraud. It is against federal law to engage in such conduct against certain financial institutions. For you to find [defendant] guilty of this crime you must be convinced that the government has proven each of these things beyond a reasonable doubt:

First, a scheme, substantially as charged in the indictment, to defraud a financial institution [or to obtain a financial institution’s money by means of false or fraudulent pretenses];

Second, [defendant]’s knowing and willful participation in this scheme with the intent to defraud [or to obtain money by means of false or fraudulent pretenses];

Third, the financial institution was federally insured or was a federal reserve bank or a member of the federal reserve system.

A scheme includes any plan, pattern or course of action. The term “defraud” means to deceive the bank in order to obtain money or other property by misrepresenting or concealing a material fact. It includes a scheme to deprive another of the intangible right of honest services.

[The term “false or fraudulent pretenses” means any false statements or assertions that concern a material aspect of the matter in question, that were either known to be untrue when made or made with reckless indifference to their truth and that were made with the intent to defraud. They include actual, direct false statements as well as half- truths and the knowing concealment of facts.]

A “material” fact or matter is one that has a natural tendency to influence or be capable of influencing the decision of the decisionmaker to whom it was addressed.

[Defendant] acted “knowingly” if [he/she] was conscious and aware of [his/her] actions, realized what [he/she] was doing or what was happening around [him/her], and did not act because of ignorance, mistake or accident.

An act or failure to act is “willful” if done voluntarily and intentionally, and with the specific intent to do something the law forbids, or with specific intent to fail to do something the law requires to be done; that is to say, with bad purpose either to disobey or to disregard the law.

Intent or knowledge may not ordinarily be proven directly because there is no way of directly scrutinizing the workings of the human mind. In determining what [defendant] knew or intended at a particular time, you may consider any statements made or acts done or omitted by [defendant] and all other facts and circumstances received in evidence that may aid in your determination of [defendant]’s knowledge or intent. You may infer, but you certainly are not required to infer, that a person intends the natural and probable consequences of acts knowingly done or knowingly omitted. It is entirely up to you, however, to decide what facts are proven by the evidence received during this trial.

The government need not prove that the scheme was successful, that the financial institutions suffered a financial loss, that the defendant knew that the victim of the scheme was a federally insured financial institution [federal reserve bank; member of the federal reserve system] or that the defendant secured a financial gain.

Comment(s)

(1) This instruction is based largely on United States v. Kenrick, 221 F.3d 19, 26-29 (1st Cir. 2000) (en banc). Accord United States v. Brandon, 17 F.3d 409, 424-28 (1st Cir. 1994); United States v. Benjamin, 252 F.3d 1 (1st Cir. 2001). Kenrick concluded that intent to harm is not required. United States v. Moran, No. 00-2097, 2002 WL 31086297, at *10 (1st Cir. Sept. 23, 2002), confirmed that a defendant’s conduct need not directly induce the bank to disburse funds.

(2) See the Comments to Instruction 4.18.1341 (Mail Fraud).

(3) If more than one scheme is charged in a particular count, the jury should be instructed that it has to make a unanimous finding with respect to a particular scheme. United States v. Puerta, 38 F.3d 34, 40-41 (1st Cir. 1994).

(4) The prosecution need not prove that the defendant knew the financial institution’s status; it is sufficient for the prosecutor to prove the objective fact that the institution was insured. Brandon, 17 F.3d at 425.

(5) In United States v. Blastos, 258 F.3d 25, 27 (1st Cir. 2001), the defendant argued that the previous pattern charge was inadequate under Neder v. United States, 527 U.S. 1 (1999), because the instruction did not identify materiality as a separate element of the offense. (Neder had not yet been decided when the first patterns were published.) The First Circuit assumed arguendo that was so, but found it harmless error in light of the rest of the charge on materiality, noting “that the district court gave an instruction on materiality that, although it did not meet the specific requirements of Neder, accomplished the same purpose.” Blastos, 258 F.3d at 29. The revised pattern still does not list materiality as a separate element because it seems most logical to treat it as part of the definition of “defraud” or “false or fraudulent pretenses.” An argument can be made in light of Blastos, however, that it is safer to separate out materiality as a separate numbered element of the offense. The instruction then presumably would add a new “Second” namely, “The use of false statements, assertions, half-truths, or knowing concealments, concerning material facts or matters;” and the other elements would be renumbered accordingly. In United States v. Moran, No. 00-2097, 2002 WL 31086297, at *7 (1st Cir. Sept. 23, 2002), the court said that “the government must show that the defendants: (1) engaged in a scheme or artifice to defraud or obtain money by means of materially false statements or misrepresentations; (2) from a federally insured financial institution; and, (3) did so knowingly.