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Statutory Coverage – Bank Fraud

By: Derek Hawkins//December 13, 2016//

Statutory Coverage – Bank Fraud

By: Derek Hawkins//December 13, 2016//

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US Supreme Court

Case Name: Shaw v. United States

Case No.: 15-5991

Focus: Statutory Coverage – Bank Fraud

Subsection (1) of the bank fraud statute covers schemes to deprive a bank of money in a customer’s deposit account. Shaw’s arguments in favor of his claim that subsection (1) does not apply to him because he intended to cheat only a bank depositor, not a bank, are unpersuasive

“First, the bank did have property rights in Hsu’s bank deposits: When a customer deposits funds, the bank ordinarily becomes the owner of the funds, which the bank has a right to use as a source of loans that help the bank earn profits. Sometimes, the contract between the customer and the bank provides that the customer retains ownership of the funds and the bank only assumes possession; even then, the bank has a property interest in the funds because its role is akin to that of a bailee. Hence, for purposes of the bank fraud statute, a scheme fraudulently to obtain funds from a bank depositor’s account normally is also a scheme fraudulently to obtain property from a “financial institution,” at least where, as here, the defendant knew that the bank held the deposits, the funds obtained came from the deposit account, and the defendant misled the bank in order to obtain those funds.”

Vacated and Remanded

Full Text


Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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