Opinion ID: 535670
Heading Depth: 2
Heading Rank: 1

Heading: Criminal Conduct Under 18 U.S.C. Sec. 1344

Text: 18 Appellant first argues that 18 U.S.C. Sec. 1344 does not make it a crime to procure and pledge duplicate automobile titles and to misrepresent the amount and existence of collateral. Instead, Matousek would have us believe that his conduct constitutes merely an ordinary breach of a security agreement. Title 18 U.S.C. Sec. 1344(a)(1) provides: 19 Whoever, knowingly executes, or attempts to execute, a scheme or artifice--(1) to defraud a federally chartered or insured financial institution ... shall be fined not more than $10,000, or imprisoned not more than five years, or both. 20 18 U.S.C. Sec. 1344. 21 In support of his novel position, appellant points to the legislative history of the bank fraud statute and cites the comments of the House Judiciary Committee which expressed concern about expansive interpretation of the wire and mail fraud statutes (the statutes which preceded 18 U.S.C. Sec. 1344). 22 Contrary to appellant's suggested interpretation, other courts have addressed the scope of the bank fraud statute and have held that 18 U.S.C. Sec. 1344 should be construed broadly. In United States v. Bonallo, 858 F.2d 1427 (9th Cir.1988), the Ninth Circuit discussed the breadth of the act in the context of a scheme to defraud a bank by manipulating transaction records involving automatic teller machines. The Bonallo court concluded: 23 The legislative history of the bank fraud statute strongly indicates that Congress intended that it have the same broad scope as the mail fraud statute, 18 U.S.C. Sec. 1341 et seq. ... Further, the House Judiciary Committee, in considering the proposed bank fraud statute, expressly endorsed the broad reading courts have given the mail and wire fraud provisions. 24 (Footnote omitted) 858 F.2d at 1432. 25 Similarly, in United States v. Gunter, 876 F.2d 1113 (5th Cir.1989), the Fifth Circuit has interpreted the bank fraud statute broadly. Gunter involved a fraudulent scheme similar to the one employed by the appellant. In Gunter, two automobile dealership employees were convicted of pledging to banks certificates of title for vehicles which they no longer owned. Although there was no evidence that the defendants expressly misrepresented the ownership of the vehicles, the court concluded that the conduct was criminal within the meaning of 18 U.S.C. Sec. 1344, and upheld the convictions. 26 We conclude that the conduct of appellant falls squarely within the intended scope of the criminal bank fraud statute.