Opinion ID: 2790696
Heading Depth: 4
Heading Rank: 2

Heading: to obtain any of the moneys, funds, credits,

Text: assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both. 18 U.S.C. § 1344. A person commits bank fraud by violating either subsection. United States v. Brandon, 298 F.3d 307, 311 (4th Cir. 2002). The government presented a theory of liability under § 1344(2), alleging that Gadsden executed a single, integrated scheme to obtain funds that were first in the custody of Bank of America and then in the custody of PNC Bank. The government conceded at trial, and continues to concede on appeal, that it therefore had to prove that Gadsden violated § 1344 as to both banks. 2 The district court instructed the jury in accordance 2 We express no opinion as to whether this concession was (continued) 7 with that concession. See J.A. 1123. The district court also instructed the jury, without objection by either party, that the government had to prove that Gadsden “placed the banks at a risk of loss and that the banks did not knowingly accept such a risk.” 3 J.A. 1125. necessary or appropriate. Regardless of whether the government was required to prove a violation as to both banks, the evidence was sufficient to support the § 1344 convictions. 3 While this case was on direct appeal, the Supreme Court issued Loughrin v. United States, in which it rejected the argument that risk of loss is an element of bank fraud under § 1344(2). See 134 S. Ct. 2384, 2395 n.9 (2014). Even if Loughrin were to apply retroactively and render the district court’s “risk of loss” instruction erroneous, we would not correct that error because it would not affect the outcome of this case: the jury convicted Gadsden despite the favorable instruction, and, as we discuss below, the evidence supports the convictions. See Fed. R. Crim. P. 52(a) (“Any error, defect, irregularity, or variance that does not affect substantial rights must be disregarded.”). While Gadsden argues that we should not retroactively apply Loughrin, Appellant’s Br. at 22–23, 30, he also maintains that if Loughrin were to apply, the government must have had to prove that Gadsden obtained funds “by means of false statements that were the mechanism naturally inducing each bank to part with HABC’s funds.” Appellant’s Br. at 26. Assuming Gadsden’s interpretation of Loughrin is correct and that the government failed to meet that standard, we still would not reverse under Loughrin because Gadsden requested an instruction at trial, which the district court gave, that the false statements “must relate to a material fact or matter” and must have been made “in furtherance of the alleged scheme to defraud,” regardless of whether they naturally induced the banks to part with funds. Supp. J.A. 16; J.A. 1124–25. Even if that instruction constituted plain error, we would not correct that error because Gadsden invited it, and “[i]n the context of plain error review, an error that was invited by the appellant ‘cannot be viewed as (continued) 8 Gadsden argues on appeal that the evidence at trial was insufficient to support the finding that Bank of America suffered a risk of loss. Because the jury could have reasonably inferred that Bank of America suffered a risk of loss to HABC, an actual loss to PNC, or both, we hold that the evidence was sufficient to support Gadsden’s convictions for bank fraud. As to risk of loss, PNC investigator Michael Hersh testified at trial that Daughtry LLC “was going to receive [approximately $1.3 million] from Bank of America” in ACH transfers from the HABC account. J.A. 79. Although PNC returned the full amount to Bank of America, the jury could have reasonably inferred from Hersh’s testimony that Bank of America suffered a risk of loss in that it would have been liable to HABC for the fraudulently transferred funds but for PNC’s decision to return all of the funds. Indeed, the jury could also have reasonably inferred that Bank of America suffered an actual loss based on Hersh’s testimony that PNC Bank “recover[ed] some money from the branches or banks that the funds were sent to,” bringing its loss down to $1.1 million. J.A. 188. Although Hersh did not one that affected the fairness, integrity, or public reputation of judicial proceedings.’” United States v. Lespier, 725 F.3d 437, 450 (4th Cir. 2013) (quoting United States v. Gomez, 705 F.3d 68, 76 (2d Cir. 2013)). 9 name any specific bank, the jury received evidence that accounts at Bank of America were the second most-common recipients of funds transfers from the Daughtry LLC account, with over $250,000 going into the Fisher LLC account alone. See J.A. 1456–61. This evidence supports the conclusion that PNC recovered some of the money from Bank of America, indicating that Bank of America suffered an actual loss. Based on the evidence described above, a rational jury could have concluded beyond a reasonable doubt that Bank of America suffered a risk of loss or actual loss, either of which was sufficient to support the convictions. Accordingly, we affirm the convictions for Counts Two through Nine.