Opinion ID: 2780753
Heading Depth: 2
Heading Rank: 1

Heading: Count 1: The Conspiracy

Text: At trial, the government introduced testimony by participants in the conspiracy, law enforcement investigators, and bank employees as well as extensive documentary exhibits. The evidence established that the conspiracy as alleged involved various participants -- leaders, recruiters, information providers, and fraudulent check cashers. Participants changed over time as some went to prison and others were recruited. Leader Steven Maxwell testified that he and Russell Royals began using printing equipment to create counterfeit identification documents as early as 2006. After the printing operation was raided by the police, Maxwell began altering checks so they would be accepted at retailers, such as Wal-Mart, which used a check verification system called TeleCheck. The altered checks, supported by stolen or forged identifications, were used at retailers to purchase merchandise, which was then returned for cash. The conspirators shared information on how to avoid retailers’ check verification systems, such as driver license numbers that would not trigger a TeleCheck rejection. By using documents issued as temporary licenses, conspirators could use a single license number to support multiple fraudulent transactions. Maxwell also printed checks using a laptop and a portable printer, using a computer program called VersaCheck. Moore, nicknamed “Lucky,” supplied conspirators counterfeit identifications along with checks. After Lucky’s operation was raided, Maxwell purchased his own card printer to make fraudulent identifications by printing the picture and signature -6- of a conspirator, and the name, date of birth, and license number of a victim, on blank card stock. Kevin Martin testified that he created and supplied some of the identifications used. The conspirators obtained personal information contained in the fraudulent identifications and checks from many sources. Insiders at multiple banks supplied account numbers, addresses, dates of birth, and Social Security numbers. A credit department employee at Target provided personal information, including dates of birth and Social Security numbers. The conspirators purchased stolen checks acquired in auto thefts or supplied by Maxwell’s contact at a paper shredding company. They purchased personal information acquired by theft, including stolen employment applications, and information wrongfully supplied by an employee at the Board of Psychology. Maxwell used a website called PublicData.com to verify personal information and obtain driver license numbers. Conspirators conducted over six thousand searches using PublicData.com. Some conspirators used real identifications of persons they resembled. The conspirators used the stolen and counterfeit documents to unlawfully obtain cash in a variety of ways. A conspirator carrying stolen or counterfeit checks and identification documents would make a bank deposit to learn the account balance, then make a withdrawal for less than the account’s full balance, a fraud tactic described at trial as “split deposits.” Conspirators shared information regarding banks where it was easier or more difficult to pass counterfeit or fraudulent checks. At some banks, conspirators used real checks they had acquired, rather than fabricated checks. The conspiracy focused on retail stores during the holiday season, when it was easier to pass checks. Banks typically required more information than retailers, such as a date of birth and Social Security number. Conspirators would alter receipts to circumvent a retailer’s waiting period between paying with a check and returning the fraudulently purchased merchandise for cash. A conspirator who had trouble passing -7- a check would sometimes use his own identification and a check bearing his name, but with a false account number. Kevin Martin testified that he obtained fraudulent checks from Maxwell and Lucky and used the checks to buy expensive items at WalMart and return them for cash. The specific locations where conspirators passed checks -- either banks or retailers -- depended on the information at hand. After WalMart changed its check and return system, the conspirators targeted Sam’s Club, which did not require using a check with an actual account number. There was evidence that Kevin Martin and Maxwell’s brother, Desmon Burks, traveled throughout Minnesota and into North Dakota to cash counterfeit checks that Burks supplied. Records were introduced showing that Burks sent Maxwell victim identification information that was used to conduct fraudulent retail transactions. In at least one instance, a counterfeit check passed at a retailer went through the victim’s account, giving rise to one count of bank fraud against Burks. Burks recruited check cashers and supplied identification information, fraudulent checks, and instructions on how to conduct the transactions. Maxwell testified that he made identifications for Powell using stolen personal information. Powell instructed conspiracy participants how to make split deposits. He provided checks to cashers and retained some of the proceeds. At Maxwell’s request, Powell recruited a woman whose photograph was placed on a counterfeit identification along with personal information wrongfully acquired from the Board of Psychology. Powell, Maxwell, and two others then went to a bank where the woman cashed a fraudulent check. Allen was a director of a company named Even Cash Flow (“ECF”). Powell, accompanied by Allen, attempted to open an ECF bank account. When the bank did not permit Powell to be a signer because his identity could not be verified, Allen opened the account. Allen opened ECF accounts with minimal balances at three different banks and used the accounts to deposit substantial checks and receive a -8- portion of the deposits in cash withdrawals. A bank compliance officer testified that a series of split deposits on the ECF accounts in September and October 2010 involved checks made out to Allen and bearing a “Norman Allen” signature and generated negative balances of thousands of dollars on the ECF accounts. Another branch manager also testified to these transactions, which he said resembled a check kiting scheme. ECF bank records confirmed that some fraudulent deposits took place on the same day, and that the cash received in the split deposits was well in excess of the available funds in the account. Approximately $195,000 of fraudulent checks were passed on the ECF accounts, including some $170,000 after the accounts were closed. Allen and Powell, who exchanged over 1300 phone calls during the course of the ECF transactions, also used the accounts to provide conspirators with checks to open other bank accounts. Hamilton recruited at least one check casher, accompanied Powell on trips to banks, and provided some of the counterfeit checks. Hamilton and Powell had over four thousand phone calls during the course of the conspiracy. The evidence presented at trial, which we have briefly summarized, was sufficient to establish the knowing participation of Burks, Powell, Allen, and Hamilton in the bank fraud conspiracy charged in Count 1. Burks argues there was insufficient evidence that he knowingly joined a conspiracy to commit bank fraud because “his planning and his scheming was to get money from Wal-Mart, not a federally insured bank.” We disagree. The district court instructed the jury that intent to defraud a financial institution was an element of the offense, and the jury could reasonably infer that Burks intended to obtain the property of a financial institution by means of false pretenses, a violation of 18 U.S.C. § 1344(2).2 2 The Supreme Court recently ruled that a violation of § 1344(2), unlike a violation of § 1344(1), does not require proof of intent to defraud a bank. Loughrin v. United States, 134 S. Ct. 2384, 2393 (2014). That ruling does not affect this case because the district court instructed the jury that intent to defraud a financial -9- Powell argues the district court erred when it refused to give a requested multiple conspiracy instruction. Allen and Hamilton argue there was a fatal variance between the single conspiracy charged and the multiple conspiracies proved at trial. Because the evidence supported a single conspiracy, there was no abuse of discretion in denying Powell’s requested instruction and no variance between the indictment and the proof at trial. “If the evidence supports a single conspiracy, the failure to give a multiple conspiracy instruction is not reversible error.” United States v. Santisteban, 501 F.3d 873, 881 (8th Cir. 2007) (quotation omitted). Powell further argues the evidence was insufficient because three government witnesses were government agents with whom one cannot illegally conspire. This contention is without merit. The district court specifically instructed the jury, “There can be no indictable conspiracy involving only the defendant and Government agents and informants.” There was more than sufficient evidence that Powell agreed with Maxwell and other non-government conspirators to commit bank fraud. Allen argues that Vinicia Williamson was the only government witness connecting him to the conspiracy, and his acquittal on two substantive counts in which Williamson was a key participant in the underlying transactions established that the jury discredited her testimony, making the evidence insufficient to convict Allen of conspiracy and another substantive count. We do not agree that, in reviewing a jury verdict, we must completely disregard the testimony of a witness if the jury disregarded part of that witness’s testimony. That is inconsistent with our deferential standard in reviewing jury verdicts. See United States v. Clark, 668 F.3d 568, 573 (8th Cir. 2012). But in any event, Allen’s actions in opening and maintaining ECF bank accounts through which $195,000 of fraudulent checks passed over a substantial institution was an element of both § 1344 offenses. See United States v. Staples, 435 F.3d 860, 866 (8th Cir.), cert. denied, 549 U.S. 862 (2006). However, Loughrin may affect how § 1344 offenses should be charged and instructed in future cases. -10- period of time was sufficient additional evidence for the jury to find beyond a reasonable doubt that he was a knowing member of the bank fraud conspiracy. Hamilton argues that the evidence was insufficient because it was based upon unreliable testimony by cooperating witnesses. “We have repeatedly upheld jury verdicts based solely on the testimony of conspirators and cooperating witnesses, noting that it is within the province of the jury to make credibility assessments and resolve conflicting testimony.” United States v. Buckley, 525 F.3d 629, 632 (8th Cir.), cert. denied, 555 U.S. 977 (2008).