Loughrin v. United States
573 U.S. ___ (2014)

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Justia Opinion Summary

The bank fraud statute, 18 U.S.C. 1344(2), makes it a crime to “knowingly execut[e] a scheme ... to obtain” property owned by, or under the custody of, a bank “by means of false or fraudulent pretenses.” Loughrin was charged with bank fraud after he was caught forging stolen checks, using them to buy goods at a Target store, and then returning the goods for cash. The district court declined to give Loughrin’s proposed jury instruction that section 1344(2) required proof of “intent to defraud a financial institution.” A jury convicted Loughrin. The Tenth Circuit and Supreme Court affirmed. Section 1344(2) does not require proof that a defendant intended to defraud a financial institution, but requires only that a defendant intended to obtain bank property and that this was accomplished “by means of” a false statement. Imposing Loughrin’s proposed requirement would prevent the law from applying to cases falling within the statute’s clear terms, such as frauds directed against a third-party custodian of bank-owned property. The Court rejected Loughrin’s argument that without an element of intent to defraud a bank, section 1344(2) would apply to every minor fraud in which the victim happens to pay by check, stating that the statutory language limits application to cases in which the misrepresentation has some real connection to a federally insured bank, and thus to the pertinent federal interest.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

LOUGHRIN v. UNITED STATES

certiorari to the united states court of appeals for the tenth circuit

No. 13–316. Argued April 1, 2014—Decided June 23, 2014

A part of the federal bank fraud statute, 18 U. S. C. §1344(2), makes it a crime to “knowingly execut[e] a scheme . . . to obtain” property owned by, or under the custody of, a bank “by means of false or fraudulent pretenses.” Petitioner Kevin Loughrin was charged with bank fraud after he was caught forging stolen checks, using them to buy goods at a Target store, and then returning the goods for cash. The District Court declined to give Loughrin’s proposed jury instruction that a conviction under §1344(2) required proof of “intent to defraud a financial institution.” The jury convicted Loughrin, and the Tenth Circuit affirmed.

Held: Section 1344(2) does not require the Government to prove that a defendant intended to defraud a financial institution. Pp. 4–15.

     (a) Section 1344(2) requires only that the defendant intend to obtain bank property and that this end is accomplished “by means of” a false statement. No additional requirement of intent to defraud a bank appears in the statute’s text. And imposing that requirement would prevent §1344(2) from applying to cases falling within the statute’s clear terms, such as frauds directed against a third-party custodian of bank-owned property. Loughrin’s construction would also make §1344(2) a mere subset of §1344(1), which prohibits any scheme “to defraud a financial institution.” That view is untenable because those clauses are separated by the disjunctive “or,” signaling that each is intended to have separate meaning. And to read clause (1) as fully encompassing clause (2) contravenes two related interpretive canons: that different language signals different meaning, and that no part of a statute should be superfluous. Pp. 4–6.

     (b) Loughrin claims that his view is supported by similar language in the federal mail fraud statute and by federalism principles, but his arguments are unpersuasive. Pp. 7–15.

          (1) In McNally v. United States, 483 U. S. 350 , this Court interpreted similar language in the mail fraud statute, §1341—which served as a model for §1344—to set forth just one offense, despite the use of the word “or.” But the two statutes have notable textual differences. The mail fraud law contains two phrases strung together in a single, unbroken sentence, whereas §1344’s two clauses have separate numbering, line breaks, and equivalent indentation—all indications of separate meaning. Moreover, Congress likely did not intend to adopt McNally’s interpretation when it enacted §1344, because at that time (three years before McNally) every Court of Appeals had interpreted the word “or” in the mail fraud statute in its usual, disjunctive sense. And while McNally found that unique features of the mail fraud statute’s history supported its view, the legislative history surrounding the adoption of §1344 points the other way. Pp. 7–9.

          (2) Loughrin also contends that without an element of intent to defraud a bank, §1344(2) would apply to every minor fraud in which the victim happens to pay by check. This, he says, would unduly expand the reach of federal criminal law into an area traditionally left to the States. But this argument ignores a significant textual limit on §1344(2)’s reach: The criminal must acquire (or attempt to acquire) the bank property “by means of” the misrepresentation. That language limits §1344(2)’s application to cases (like this one) in which the misrepresentation has some real connection to a federally insured bank, and thus to the pertinent federal interest. Pp. 9–15.

710 F. 3d 1111, affirmed.

     Kagan, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Ginsburg, Breyer, and Sotomayor, JJ., joined, and in which Scalia and Thomas, JJ., joined as to Parts I and II, Part III–A except the last paragraph, and the last footnote of Part III–B. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in which Thomas, J., joined. Alito, J., filed an opinion concurring in part and concurring in the judgment.

Primary Holding
A conviction under the federal bank fraud law does not require proof that a defendant intended to defraud a financial institution but only proof that a defendant intended to obtain bank property and did so by means of a false statement.

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