A federal appellate court vacated a conviction for bank fraud in United States v. Nkansah, No. 10-2441-cr, slip op. (2nd Cir., Nov. 8, 2012), finding insufficient evidence to support a conviction. The appellant successfully argued that the bank fraud statute requires proof of intent to harm the bank, as opposed to another victim, and that such evidence was lacking in the government’s case against him. The court agreed and vacated two convictions: bank fraud and a related charge of aggravated identity theft. It upheld several other convictions, including filing false claims with the Internal Revenue Service (IRS), and it did not reach the appellant’s argument regarding the reasonableness of his sentence.
According to the court’s opinion, the appellant, Felix Nkansah, was part of a group that engaged in a scheme to file fraudulent tax returns in order to obtain tax refunds. From early 2005 until August 2008, the group reportedly stole personal identifying information from databases maintained by hospitals and childcare organizations, and filed tax returns using the stolen identities and fabricated income information. The IRS issued refunds to group members via check or electronic funds transfer. Prosecutors alleged that the group claimed over $2.2 million in refunds and obtained more than $500,000.
Investigators linked the appellant to deposits at several banks, as well as computers and IP addresses under his control. Searches of his home and car turned up more evidence, and police arrested him in September 2008. He faced five charges: conspiracy to file false IRS claims, filing false IRS claims, bank fraud, aggravated identity theft, and identity theft. A jury convicted him on all five counts in January 2010, and he received a sentence that totalled nineteen years in prison. Because four of the five sentences were to run concurrently, his total prison time would be seventy-five months.
A special agent with the Secret Service testified that the banks handling the appellant’s deposits suffered harm because of his scheme, but could not confirm any specific losses. The appellant argued in his appeal that the bank fraud statute, 18 U.S.C. § 1344, requires proof of intent to harm the bank itself. Not only did the prosecution fail to prove this intent, he argued, it also failed to prove that the banks suffered any loss at all. The Second Circuit agreed with the appellant, holding that “the bank fraud statute is not an open-ended, catch-all statute” covering any type of financial fraud. Slip op. at 7.
The court held that a conviction for bank fraud under § 1344 requires proof of two elements: conduct “intended to deceive a federally chartered or insured financial institution into releasing property,” id. at 7; and intent to harm the bank through “actual or potential loss.” Id. Without proof of intent to harm the bank, the court held, the question of whether the banks suffered losses was irrelevant. It vacated the convictions for bank fraud and aggravated identity theft, noting that the allegations surrounding the aggravated identity theft charge relied on the bank fraud charge. It remanded the case to the trial court for resentencing.
Michael J. Brown, a board-certified criminal defense attorney, fights for the rights of Texas defendants, making certain that law enforcement and the courts abide by all the rules and procedures of the criminal justice system. To learn more about how we can assist you in your legal matter, contact us online or at (432) 687-5157.
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Texas Man Sentenced to Just Over One Year in Prison for Fraudulent Electronics Scheme, Texas Criminal Lawyer Blog, January 3, 2013
Fifth Circuit Holds that Political Contributions from Convicted Ponzi Schemer Were Fraudulent, Texas Criminal Lawyer Blog, December 26, 2012
Appellate Court Affirms Sentence in Wire Fraud and Money Laundering Case, Rejects Defendant’s Argument of a Substantively Unreasonable Sentence – U.S. v. Dao, Texas Criminal Lawyer Blog, September 26, 2012
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