Opinion ID: 3002136
Heading Depth: 2
Heading Rank: 2

Heading: sufficiency of the evidence

Text: The defendants contend that the evidence at trial was insufficient to prove their knowledge and intent to defraud. Their burden in doing so is heavy. United States v. Useni, 516 F.3d 634, 646 (7th Cir. 2008). When the sufficiency of the evidence is challenged, we review the evidence and all reasonable inferences from it in the light most favorable to the verdict. Id. We “will reverse only if no rational trier of fact could find the defendants guilty beyond a reasonable doubt.” United States v. DeSilva, 505 F.3d 711, 715 (7th Cir. 2007); see also Useni, 516 F.3d at 646. A conviction for bank fraud under 18 U.S.C. § 1344 requires proof of, inter alia, the defendant’s knowing participation in a scheme to defraud a bank, see United States v. Yoon, 128 F.3d 515, 523 (7th Cir. 1997); United States v. Ross, 502 F.3d 521, 530-31 (6th Cir. 2007), cert. denied, 128 S. Ct. 1723 (2008), and the defendant’s intent to defraud the bank, United States v. Lamarre, 248 F.3d 642, 649 (7th Cir. 2001). “Intent to defraud” means that the Nos. 06-3848, 06-4124, & 06-4399 31 defendant “acted willfully and with specific intent to deceive or cheat, usually for financial gain for one’s self or the causing of financial loss to another.” Id.; see also United States v. Sloan, 492 F.3d 884, 891 (7th Cir. 2007). The intent to defraud may be proven by circumstantial evidence and inferences drawn from the scheme itself. Lamarre, 248 F.3d at 649. Falsifying information on loan documents is circumstantial evidence of intent to defraud. Id. The government offered some direct evidence of the defendants’ knowledge of the scheme and intent to defraud the bank, that is, it produced Mr. Jones’s testimony that Ms. Hubbard had identified “Ieanis” as an insider involved in the scheme. And we agree with the district court that the circumstantial evidence was overwhelming. The evidence against Ms. Young established that she was the sister of Ms. Hubbard, one of the insiders at Washington Mutual. Ms. Young’s checking account had very low or negative balances in late 2002 and early 2003. But on January 28, $194,471.70 was transferred from Washington Mutual, the bank where her sister worked, into Ms. Young’s checking account in Texas, even though she was not a Washington Mutual mortgage loan customer. The wire transfer sheet used to request the transfer contained Ms. Young’s name, the name of her bank, Bank One, and her bank account number. The jury reasonably could infer that Ms. Young’s personal information was on the wire transfer sheet because she had given that information to Ms. Hubbard. Phone records support the inference that Ms. Young and 32 Nos. 06-3848, 06-4124, & 06-4399 Ms. Hubbard discussed the scheme to defraud Washington Mutual and that Ms. Young gave her account information to Ms. Hubbard in the days leading up to the wire transfer. Their telephone conversations increased significantly during the ten days surrounding the wire transfer. Ms. Young’s actions following the inexplicable transfer of $194,471.70 into her account provided additional circumstantial evidence of her knowledge and intent. Ms. Young never attempted to determine why she received such a large sum of money from Washington Mutual—the bank where her sister worked. Nor did she attempt to notify her bank or Washington Mutual that a mistake apparently had been made involving her account. Instead, the day after the wire transfer, as her bank records show, Ms. Young opened a new savings account and transferred $94,243.58 into that new account. She also obtained a cashier’s check made payable to Ms. Hubbard for $97,000—a little more than half of the money that had been transferred into her account the day before. It was reasonable for the jury to infer that this was a kickback to Ms. Hubbard for her role in the fraudulent wire transfer. The bank records also show that the following day, $45,207.12 was withdrawn from Ms. Young’s new savings account. Ms. Young argues that the government had little evidence of her activities after the wire transfer on January 28. But the government was not required to prove what Ms. Young did with the money she received in order to prove her guilty of bank fraud. See 18 U.S.C. § 1344; United States v. Abboud, 438 F.3d 554, 590 (6th Cir. 2006); United States v. Dadi, 235 F.3d 945, 950 (5th Cir. 2000); see also Federal Criminal Jury Instructions of the Seventh Circuit 266 Nos. 06-3848, 06-4124, & 06-4399 33 (1999). The fact that Ms. Young did not go on a spending spree or purchase big ticket items does not exculpate her. Nor does it negate the reasonable inference of her knowledge of the scheme and intent to defraud the bank. Quite possibly, Ms. Young restrained her spending so as not to draw attention to her new-found riches. With respect to Ms. Shaw, the evidence was more than sufficient to allow a reasonable jury to conclude that she had the requisite knowledge and intent to defraud. The evidence supported a reasonable inference that Ms. Shaw was an insider at Washington Mutual and a key player in the fraudulent scheme. As an opener, her job responsibilities would not have included accessing wire transfers in Pronto. But nonetheless, the evidence raises a reasonable inference that she accessed wire transfers—repeatedly. Every Washington Mutual employee who reversed a wire transfer in Pronto left a digital fingerprint. The investigation revealed that Ms. Shaw’s user identification number was used to reverse the March 28 wire to Mr. Jackson, which preceded the real wire transfer of April 1; the April 29 wire transfer to Mr. Jones and all the Hulet wires, which occurred after Ms. Hubbard had left Washington Mutual’s employ; and lastly, the five wires printed in Ms. Shaw’s husband’s name. While it is possible that another Washington Mutual employee used Ms. Shaw’s identification number to reverse the wire transfers, the jury properly could infer that it was Ms. Shaw using her own identification number. The timing of the Jones wire transfer and all of the Hulet wires after Ms. Hubbard had left the bank meant that Ms. Hubbard was no longer in a position to reverse 34 Nos. 06-3848, 06-4124, & 06-4399 these wire transfers, yet Ms. Shaw remained at the bank where she could. In addition, the Jones wire transfer was effected in a way similar to that of the other wire transfers in the scheme, and the authorizing signatures on the Jones wire transfer were identical to those on the worksheet for the Hulet wire transfer. The jury could reasonably infer Ms. Shaw’s intent to defraud from her creation of fraudulent wire transfers and wire reversals. See Lamarre, 248 F.3d at 649. And there was more. Shortly after the Jackson wire transfer, Ms. Shaw received two personal checks for $10,000 from Ms. Hubbard who had just received a personal check from Mr. Jackson for $125,000. The jury could reasonably infer these $10,000 checks were payment for Ms. Shaw’s role in the Jackson wire transfer. As the government argues, it is highly unusual for one coworker to give another co-worker $20,000, for no apparent reason. The evidence was that Ms. Shaw actually received these suspicious checks—they were deposited into her own bank account. Moreover, the evidence established that after the Jones wire transfer, Mr. Jones obtained a cashier’s check payable to Ms. Shaw, whom he had never met, in the amount of $60,000. Mr. Jones testified that Ms. Hubbard had instructed him to divide the proceeds of the wire transfer three ways and to obtain two cashier’s checks, one for her and one for Ms. Shaw. And the evidence raised an inference that someone other than Ms. Hubbard caused the Jones wire transfer; Ms. Hubbard had left Washington Mutual the day before. Thus, the jury reasonably could infer that the $60,000 cashier’s check was payment for Ms. Shaw’s knowing and intentional role in the Jones wire transfer. Nos. 06-3848, 06-4124, & 06-4399 35 Yet Ms. Shaw argues that there was no evidence as to what she was told about the checks she received from Mr. Jones and Ms. Hubbard. Like Ms. Young, Ms. Shaw did not spend all of the money she obtained immediately. But as stated, quick spending of ill-gotten gains is not an element of bank fraud. See Abboud, 438 F.3d at 590; Dadi, 235 F.3d at 950. Anyway there was evidence that Ms. Shaw spent a good deal of the money in a short period of time on frills such as expensive jewelry, a honeymoon to a resort in Jamaica, and new furniture. The fact that she did not spend all of the money does not negate the reasonableness of the inference of her knowledge and intent to defraud. The jury could have inferred that Ms. Shaw did not spend more of the money more quickly in order to avoid calling too much attention to her sudden windfall. Finally, Mr. Jackson’s close friendship with Ms. Hubbard was not the only evidence regarding his knowledge and intent. Mr. Jackson was not a Washington Mutual customer, yet he received a wire transfer of $250,641.40 into his newly opened bank account. This account had carried a very low and even negative balance right before the transfer. There was no evidence that Mr. Jackson ever questioned the wire transfer or notified the bank that an error had been made. Importantly, the wire transfer worksheet contained Mr. Jackson’s name, his bank name, and his personal checking account number. As with Ms. Young, the jury could draw a reasonable conclusion from this evidence that Mr. Jackson had given this information to Ms. Hubbard. Also as with Ms. Young, telephone records showed a marked increase in the number and 36 Nos. 06-3848, 06-4124, & 06-4399 duration of telephone calls between Ms. Hubbard and Mr. Jackson in the ten days surrounding the wire transfer. From this evidence, the jury could reasonably infer that they were planning and discussing the fraudulent wire transfer to Mr. Jones’s account. The evidence of what Mr. Jackson did with the money wired to his account also raises an inference of knowledge and intent. He quickly wrote a personal check for $125,000 payable to Ms. Hubbard. The jury could infer that this was Ms. Hubbard’s kickback for her role in the wire transfer. Mr. Jackson spent the money he fraudulently obtained almost as soon as it hit his account, for cash, furniture, vehicles, and gifts to family and friends. His bank account was back to a near $0 balance in less than three months. Mr. Jackson’s extraordinary spending spree raises a reasonable inference of his knowing participation in the scheme and intent to defraud.5 In sum, the documentary evidence of the defendants’ knowing participation in the scheme to defraud and intent to defraud Washington Mutual as corroborated by Mr. Jones’s testimony as to how the scheme worked while he was involved was overwhelming. Therefore, the defendants’ challenge to the sufficiency of the evidence fails. 5 As noted, a spending spree is not a required element of bank fraud. Nonetheless, a spending spree may typically follow such fraudulent behavior. Nos. 06-3848, 06-4124, & 06-4399 37