Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-50528/USCOURTS-ca9-14-50528-0/pdf.json

Parties Involved:
Lloyd Irvin Taylor
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

LLOYD IRVIN TAYLOR, AKA Larry

A. Busenius, AKA David Duane

Fisher, AKA Henry W. Henrikson,

AKA Larry Henrikson, AKA James

R. Holaway, AKA Kenneth H.

Miller, AKA Terry A. Price, AKA

Larry Taylor, AKA William J.

Yount,

Defendant-Appellant.

No. 14-50528

D.C. No.

3:13-cr-01390-

MMA-1

OPINION

Appeal from the United States District Court

for the Southern District of California

Michael M. Anello, District Judge, Presiding

Argued and Submitted

November 5, 2015—Pasadena, California

Filed December 29, 2015

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2 UNITED STATES V. TAYLOR

Before: Mary M. Schroeder and Michelle T. Friedland,

Circuit Judges and Vince G. Chhabria,* District Judge.

Opinion by Judge Schroeder

SUMMARY**

Criminal Law

Affirming convictions for making false statements to a

bank in violation of 18 U.S.C. § 1014 and aggravated identity

theft in violation of 18 U.S.C. § 1028(a), the panel held that

proof of risk of loss to a financial institution is not required

for a conviction under § 1014.

COUNSEL

Knut S. Johnson (argued), Emerson Wheat, San Diego,

California, for Defendant-Appellant.

Caroline D. Ciraolo, Acting Assistant Attorney General,

Frank P. Cihlar, Chief, Criminal Appeals &Tax Enforcement

Policy Section, Gregory Victor Davis and Gregory S. Knapp

(argued), Attorneys, Department of Justice, Tax Division,

* The Honorable Vince G. Chhabria, United States District Judge for the

Northern District of California, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. TAYLOR 3

Washington, D.C.; and Laura E. Duffy, of Counsel, United

States Attorney, SanDiego, California, for Plaintiff-Appellee.

OPINION

SCHROEDER, Circuit Judge:

Lloyd Taylor appeals his conviction of seven counts of

making false statements to a bank in violation of 18 U.S.C.

§ 1014, and six counts of aggravated identity theft in

violation of 18 U.S.C. § 1028(a). These convictions arose out

of a tax evasion scheme in which Taylor used multiple false

identities to open bank accounts in order to obtain cashier’s

checks to buy gold. The bank discovered the scheme and

reported it to federal authorities.

The determinative issue he raises in this appeal is whether

§ 1014 requires a risk of loss or liability for the bank. There

was none in this case because Taylor was depositing and

withdrawing money from accounts that he had created. The

statutory language, however, contains no requirement of a

risk of loss to the financial institution. Rather, it requires

only that Taylor knowingly made a false statement for the

purpose of influencing in any way the action of the bank in

connection with covered banking transactions—elementsmet

when Taylor used false documents in connection with

opening accounts and obtaining cashier’s checks. We

therefore join the Fourth Circuit in holding that the statute

does not contain any requirement of a risk of loss, and we

affirm the convictions. See Elliot v. United States, 332 F.3d

753, 764 (4th Cir. 2003).

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4 UNITED STATES V. TAYLOR

BACKGROUND

Taylor’s scheme began in the 1980s when he used the

identities of children who had died before receiving social

security numbers, and who would have been approximately

the same age as Taylor. At trial, the government introduced

evidence that Taylor obtained Florida driver’s licenses, which

he subsequently renewed, and voter registration cards, using

the stolen identities. According to the evidence presented,

Taylor used these false documents to open various bank and

brokerage accounts, including checking accounts at Wells

Fargo and Wachovia. In 2009, Taylor, using one of his false

identities, purchased four cashier’s checks from Wells Fargo

Bank, in the total amount of $250,000. Around the same

time, again using a false identity, he purchased two cashier’s

checks from Wachovia Bank, in the total amount of $98,050. 

To obtain the cashier’s checks, Taylor provided various forms

of false identification to each bank. To pay for these

cashier’s checks he used funds drawn from checking accounts

he had opened at each bank, also using false identities. In

addition, Taylor had various other schemes involving falsified

passport applications and creation of a nonexistent church,

which are not at issue here.

A grand jury indicted Taylor for violating numerous

statutes, including making false statements to a federally

insured financial institution, 18 U.S.C. § 1014; making false

statements on U.S. passport applications, 18 U.S.C. § 1542;

obstruction of the administration of internal revenue laws,

26 U.S.C. § 7212(a); tax evasion, 26 U.S.C. § 7201; and

aggravated identity theft, 18 U.S.C. § 1028(a). A jury

convicted Taylor of all counts in June 2014.

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UNITED STATES V. TAYLOR 5

On appeal he challenges only the § 1014 false statement

convictions and the § 1028(a) convictions, which are

derivative of the § 1014 convictions. These convictions

effectively resulted in increasing his sentence by two years. 

Taylor rests his entire appeal on the argument that the

government was required to prove under § 1014 that Taylor’s

conduct created a risk of loss to the banks, which the

government unquestionably did not do.

DISCUSSION

Resolution of Taylor’s appeal requires us to look at the

textual elements of the statute. Section 1014 provides, in

relevant part:

Whoever knowingly makes any false

statement or report . . . for the purpose of

influencing in any way the action of . . . any

institution the accounts of which are insured

by the Federal Deposit Insurance Corporation

. . . upon any . . . commitment . . . or

application for . . . a guarantee . . . shall be

[guilty of an offense against the United

States].

18 U.S.C. § 1014. It is undisputed that Taylor made false

statements of his identity to open accounts, withdraw funds,

and obtain cashiers’ checks from insured banks. A “cashier’s

check is a commitment” within the meaning of 18 U.S.C.

§ 1014. United States v. Boren, 278 F.3d 911, 916 (9th Cir.

2002) (quoting United States v. Riley, 550 F.2d 233, 235 (5th

Cir. 1977)).

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6 UNITED STATES V. TAYLOR

Prior to 1997, most circuits had held that § 1014 reached

only those false statements that were “material,” that is,

having “the capacity to influence the lending institution” with

respect to a decision involving the bank’s funds. Theron v.

U.S. Marshall, 832 F.2d 492, 497 (9th Cir. 1987) (citation

omitted). The Supreme Court in United States v. Wells,

519 U.S. 482, 489–99 (1997), rejected the materiality

requirement, holding that materiality of a false statement is

not an element of § 1014. The Wells Court relied on the plain

text of § 1014, which contains no mention of materiality, as

well as on the legislative history of the statute, to determine

that there is no materiality requirement. Id.

Relying on Wells, the Fourth Circuit explicitly rejected a

risk of loss element. Elliot explained that Wells held that a

false statement “need not be material to a financial

institution’s decision to advance or loan funds.” 332 F.3d at

764. If a false statement violates the statute even if it cannot

influence any financial decision, then, Elliot concluded, there

can be no requirement of risk of financial loss. See id.

“Because materiality is not an essential element of § 1014, it

would be nonsensical for us to require the Government to

nonetheless prove that the financial institution faced a risk of

financial loss.” Id. The Fourth Circuit’s decision is

consistent with that of the pre-Wells opinion by the Third

Circuit in United States v. Yoo, which explained,

“[Defendant’s] additional argument that § 1014 does not

apply here because in this case there was no risk of loss to

any federally insured bank, disregards established precedent. 

Damage or the risk of damage to an insured bank is not an

element of § 1014.” 833 F.2d 488, 490 n.2 (3d Cir. 1987)

(citations omitted).

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UNITED STATES V. TAYLOR 7

Relatedly, the Fifth, Seventh, and Tenth Circuits have all

held that actual loss is not an element of § 1014. See United

States v. Lane, 323 F.3d 568, 583 (7th Cir. 2003) (“[M]uch

like materiality, loss is not an element under § 1014.”);

United States v. Grissom, 44 F.3d 1507, 1511 (10th Cir.

1995) (“The defendant need not have intended to harm the

bank or to personally profit, and the bank need not have

suffered actual loss in order to sustain [§ 1014] convictions.”)

(citation omitted); United States v. Waldrip, 981 F.2d 799,

806 (5th Cir. 1993) (“Loss need not be proven to convict a

defendant for . . . making a false statement to a bank . . . .”).

Our court has not previously addressed the issue, but we

have no reason to disagree with our sister circuits, because

the plain language of § 1014 imposes no risk of loss

requirement. Congress could legitimately have been

concerned about banks’ ability to detect identity theft and

ensure the correct identity of their customers, regardless of

whether the banks were also exposed to potential liability. 

We therefore hold that proof of a risk of loss to a financial

institution is not required for conviction of making a false

statement in violation of § 1014.

AFFIRMED.

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