Opinion ID: 202748
Heading Depth: 2
Heading Rank: 3

Heading: Jury Instruction on Misapplication

Text: 172 Appellants argue that the jury instructions improperly permitted the jury to convict them on the misapplication charge if it found them merely reckless. We review de novo a claim that the district court erred in instructing the jury on the intent necessary to support a conviction. United States v. Woodward, 149 F.3d 46, 68-69 (1st Cir.1998). 173 The contested instruction stated that the government must prove beyond a reasonable doubt 174 that the defendants acted with the intent to injure, defraud or deceive the bank. You may also consider whether defendants acted recklessly, that is, in reckless disregard of the interests of the bank. If you find that defendants acted recklessly, with respect to the alleged misapplications, you may find that the defendants acted with intent to injure, defraud or deceive the bank. 175 Relying on a Fifth Circuit case, United States v. Adamson, 700 F.2d 953, 965 (5th Cir.1983), appellants contend that, contrary to this instruction, reckless behavior is insufficient to establish misapplication under 18 U.S.C. § 657. 46 Contrary to the Fifth Circuit, however, we have specifically held that `the sine qua non of charges of willful misapplication of bank funds is action taken with the knowledge of harm to, intent to harm, or reckless disregard for, the financial health of the bank.' United States v. Brennan, 994 F.2d 918, 923 (1st Cir.1993)(emphasis added)(quoting United States v. Fusaro, 708 F.2d 17, 21 (1st Cir.1983)); see also United States v. London, 66 F.3d 1227, 1241 (1st Cir. 1995)([T]he cases applying § 656 [the misapplication statute that deals with banks rather than savings and loans institutions] . . . have generally held reckless disregard to establish the requisite intent to defraud.); United States v. Rodriguez-Alvarado, 952 F.2d 586, 590 (1st Cir. 1991)(A reckless disregard by a bank officer of his bank's interest . . . is sufficient to establish the requisite intent to defraud . . . .). In light of these binding decisions, appellants' arguments are futile. We find no error in the district court's instruction on the misapplication charge.