Opinion ID: 785400
Heading Depth: 3
Heading Rank: 2

Heading: The Denial of Mr. Swanson's Motion for Judgment of Acquittal

Text: 20 At the close of the government's case, Mr. Swanson moved for a judgment of acquittal on the grounds that the conduct the government proved at trial does not violate 18 U.S.C. § 1344(1). The court denied this motion, and Mr. Swanson, inexplicably, failed to renew it at the conclusion of the case. On appeal Mr. Swanson asserts that the court erred in failing to grant the motion because the evidence was insufficient to support the jury verdict.
21 Ordinarily, a defendant who moved for a judgment of acquittal at the close of the government's case must move again for a judgment of acquittal at the close of the entire case or the issue will be waived. United States v. Bowie, 892 F.2d 1494, 1496 (10th Cir.1990). However, if no motion for acquittal is made at the close of all evidence, we nevertheless review for plain error under FED.R.CRIM.P. 52(b) .... [and] the standard actually applied is essentially the same as if there had been a timely motion for acquittal. Id. Thus, we review this denial of a motion for judgment of acquittal de novo, viewing the evidence in the light most favorable to the government. United States v. Austin, 231 F.3d 1278, 1283 (10th Cir.2000). [R]eversal is only appropriate if no rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Id. (internal quotation marks omitted). This standard requires this court to review the trial record to determine if there is evidence to support the verdict. Id.
22 Mr. Swanson contends that the government did not establish the existence of a scheme to defraud because the evidence failed to prove that (a) NationsBank issued the cashier's checks by relying on the falsely inflated balances, Aplt's Br. at 16, and (b) the defendant did something more than write checks on accounts with insufficient funds. Aplt's Br. at 13. We disagree with Mr. Swanson's assessment of what is required to prove a case brought under § 1344(1) and his assessment of the evidence. 23
24 As to Mr. Swanson's contention that the government failed to establish that NationsBank issued the cashier's checks in reliance on the falsely inflated balances, Mr. Swanson appears to have confused the elements of § 1344(2) with those of § 1344(1). We have held that [a]lthough largely overlapping, a scheme to defraud, and a scheme to obtain money by means of false or fraudulent pretenses, representations, or promises, are separate offenses. United States v. Cronic, 900 F.2d 1511, 1513 (10th Cir.1990). Indeed, 25 the plain language of 18 U.S.C. § 1344 sets forth two distinct crimes concerning federally insured financial institutions. Each crime requires a defendant first to knowingly execute a scheme or artifice. To convict a defendant of a crime under subsection (1), the government would have to prove the scheme defrauded the financial institution. To convict a defendant under subsection (2), the government would have to prove the scheme enabled the defendant to obtain certain property  by means of false or fraudulent pretenses, representations or promises.  26 United States v. Bonnett, 877 F.2d 1450, 1453-54 (10th Cir.1989) (quoting and adding emphasis to § 1344(2)). Had Mr. Swanson been charged under subsection (2), his argument that the government was required to prove that NationsBank relied on falsely inflated balances when issuing the cashier's checks may have carried more weight. However, Mr. Swanson was charged under subsection (1), which only requires the government to prove that the defendant's scheme defrauded a financial institution. See also Cronic, 900 F.2d at 1513-14 (The offense of a scheme to defraud focuses on the intended end result, not on whether a false representation was necessary to effect the result. Schemes to defraud, therefore, may come within the scope of [§ 1344] even absent an affirmative misrepresentation.). 27 b. Evidence Mr. Swanson Did Something More Than Write Checks On Accounts With Insufficient Funds 28 Mr. Swanson next argues that NationsBank made a conscious business decision when it allowed him to maintain overdrafts in his accounts and that the government did not establish a sufficient pattern of conduct designed to deceive. However, our cases liberally construe the bank fraud statute, Young, 952 F.2d at 1255-56, and we have clearly held that check kiting, or cross-depositing a series of worthless checks, constitutes a scheme to defraud under 18 U.S.C. § 1344(1). United States v. Ratchford, 942 F.2d 702, 704 (10th Cir. 1991) (affirming conviction under § 1344(1) for check-kiting); Cronic, 900 F.2d at 1514 (stating that check-kiting constitutes a scheme to defraud under § 1344(1)); Bonnett, 877 F.2d at 1454, 1455 (adopting the same). In Ratchford, we held that the government proved a violation of § 1344(1) when 29 [t]he government's evidence at trial showed that on the dates the checks charged in [the indictment] were written, there were insufficient funds in the respective accounts to cover the checks.... [and that] the covering deposits for these checks were in the form of checks written on either the account to which the original indicted check was deposited or an account of one of defendant's other companies involved in the float scheme. 30 942 F.2d at 704. Accordingly, [f]or purposes of § 1344(1), the relevant inquiry is whether defendant knowingly had insufficient funds in the accounts being utilized on the date the checks were written. Id. 31 We emphasize that this is not a case of an isolated overdraft or a few occurrences of minor overdrafts. Instead, there were scores of transactions. Thus, in this case, the jury could rationally find that the evidence established that Mr. Swanson strategically used the CDA to circulate the insufficient funds checks among his eleven accounts on a daily basis, in order to take advantage of the float time inherent in the banking system so that his account balances were artificially inflated. Accordingly, we hold that there was ample evidence for a rational trier of fact to conclude that Mr. Swanson did something more than write checks on accounts with insufficient funds. 32 c. Risk of Loss 33 Finally, Mr. Swanson contends that the government did not establish that NationsBank was ever at a risk of loss because the bank was always fully secured by the collateral on Mr. Swanson's loans. However, this contention improperly analogizes the assessment of loss in check-kiting cases to the assessment of loss in fraudulently obtained loan cases. We concede that both types of cases involve violations of the bank fraud statute. Moreover, we have held that in fraudulently obtained loan cases, `[t]he security of [a] loan is a valid consideration in evaluating a defendant's realistic intent and the probability of inflicting the loss.' United States v. Williams, 292 F.3d 681, 686 (10th Cir. 2002) (quoting United States v. Nichols, 229 F.3d 975, 980 (10th Cir.2000)). Here, however, Mr. Swanson's check-kiting activity was independent from and unrelated to the loans he obtained from NationsBank. We agree with the government that Mr. Swanson's argument is tantamount to a suggestion that if an account holder has sufficient collateral at a bank, he can commit fraud against the bank so long as his activity does not exceed the value of his collateral. Aple's Br. at 12. See United States v. Flowers, 55 F.3d 218, 221 (6th Cir.1995) (Check kiting is more akin to theft than to fraudulently obtaining a loan. The offender in a fraudulently induced loan transaction at least asked the bank to provide the funds and gave some kind of security in return.); United States v. Frydenlund, 990 F.2d 822, 825 (5th Cir.1993) ([C]heck kiting is not more equivalent to a fraudulent loan transaction than to simple theft.... The bank ... voluntarily places a limit on its risk when it lends money, but it is at the mercy of the check kiter for the amount of loss he may cause.). We hold that the government produced sufficient evidence for a rational trier of fact to conclude that Mr. Swanson's conduct put the bank at a risk of loss equal to the sum of his bank accounts' overdrafts each day, which on the day his check writing ability was stopped, amounted to $522,064.30. Accordingly, we hold it was not error for the district court to deny Mr. Swanson's motion for judgment of acquittal.