Opinion ID: 675752
Heading Depth: 2
Heading Rank: 1

Heading: Agreement to Commit Unlawful Act

Text: 10 The government alleges that the appellants' conduct amounted to bank fraud and money laundering. Bank fraud is proscribed under 18 U.S.C. Sec. 1344. 1 It is also one of the predicate offenses specified under the money laundering statute, which prohibits the use in certain financial transactions of the proceeds of certain predicate offenses affecting interstate or foreign commerce. 18 U.S.C. Sec. 1956. 2 Thus, if we conclude that a rational jury could, based on the evidence presented, find that Brown and Clague were guilty of bank fraud, we may also conclude that the jury could reasonably find the appellants guilty of money laundering. Their guilt would also turn on whether they participated in a type of financial transaction that is covered by Sec. 1956(c). 3 The parties do not dispute that the appellants' activities constitute financial transactions within the meaning of Sec. 1956 and, in any event, we find that that section applies. 4 11 Section 1344 is to be construed broadly. Whether a scheme to defraud exists is determined by examining 'whether the scheme demonstrated a departure from fundamental honesty, moral uprightness, or fair play and candid dealings in the general life of the community. The bank fraud statute condemns schemes designed to deceive in order to obtain something of value.'  United States v. Hammen, 977 F.2d 379, 383 (7th Cir.1992) (citing United States v. Goldblatt, 813 F.2d 619, 624 (3d Cir.1987)). This broad definition suggests that each individual component of the scheme need not be specifically illegal, so long as the scheme as a whole constitutes fraudulent conduct. See Goldblatt, 813 F.2d at 624 (citing United States v. Feldman, 711 F.2d 758, 764 (7th Cir.), cert. denied, 464 U.S. 939, 104 S.Ct. 352, 78 L.Ed.2d 317 (1983)). 12 There is ample support in the record for the jury's conclusion that Brown and Clague agreed to defraud the banks. There is evidence that they knew that banks would not allow third-party processing because of its potential for increased risk. In addition, the defendants encouraged the recruitment of new merchants, they did not reveal their own activities to the banks and they encouraged other alleged participants not to reveal their activities to the banks. In short, neither appellant's role was limited merely to buying or selling third-party processing services without accompanying fraudulent purposes. See United States v. Mancillas, 580 F.2d 1301, 1307 (7th Cir.), cert. denied, 439 U.S. 958, 99 S.Ct. 361, 58 L.Ed.2d 351 (1978). While the appellants argue that they did not know that their activities were illegal and that they consulted attorneys, Brown Br. at 8-10, their purported intent only to bypass Visa and Mastercard regulations indicates a departure from notions of fundamental honesty and forthright dealings as required under Hammen. 5 Given the wealth of evidence against the appellants, it was perfectly reasonable for the jury to find that Brown and Clague had agreed to defraud the bank. Further, the appellants' substantive bank fraud and money laundering convictions were not erroneous.