U.S. v. Brandon

• Decision Date: 02 August 2002
• Docket Number: No. 01-4725.,01-4725.
• Citation: 298 F.3d 307
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Charleszette Ardel BRANDON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

298 F.3d 307

UNITED STATES of America, Plaintiff-Appellee, v. Charleszette Ardel BRANDON, Defendant-Appellant.

No. 01-4725.

United States Court of Appeals, Fourth Circuit.

Argued May 9, 2002.

Decided August 2, 2002.

COPYRIGHT MATERIAL OMITTED

ARGUED:

Matthew Alan Wartel, Bynum & Jenkins, P.L.L.C., Alexandria, Virginia, for Appellant. Morris Rudolph Parker, Jr., Assistant United States Attorney, Alexandria, Virginia, for Appellee.

ON BRIEF:

Paul J. McNulty, United States Attorney, Alexandria, Virginia, for Appellee.

Before TRAXLER, Circuit Judge, BEAM, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation, and PAYNE, United States District Judge for the Eastern District of Virginia, sitting by designation.^*

Affirmed by published opinion. Judge TRAXLER wrote the opinion, in which Judge BEAM joined.

OPINION

TRAXLER, Circuit Judge.

Charleszette Ardel Brandon pled guilty to bank fraud. See 18 U.S.C.A. § 1344 (West 2000). She appeals, arguing that the district court erroneously denied her motion to dismiss the indictment. We affirm.

I.

Brandon was charged with, and ultimately pled guilty to, federal bank fraud for engaging in a scheme whereby she stole blank checks from six individuals who each maintained a checking account at one of the federally-insured banks listed in the indictment. Brandon then procured picture identification cards bearing the name of each individual account holder, forged the signatures of the account holders on the stolen checks, and negotiated the checks to purchase various items from merchants in Virginia and Maryland. Each of the six counts of bank fraud charged in the indictment is based on a single stolen check that Brandon negotiated in exchange for merchandise.

Prior to trial, Brandon filed a motion to dismiss the indictment, arguing that the facts alleged in the indictment, even if true, did not constitute bank fraud under § 1344. Relying on our decision in United States v. Orr, 932 F.2d 330 (4th Cir.1991), Brandon contended that the indictment failed to allege sufficient facts to support a charge of bank fraud under § 1344 because Brandon's scheme involved presenting the stolen checks to the retail merchants rather than directly to the banks. Thus, Brandon argued that "the fraud victims here are the retail merchants" instead of the banks. J.A. 16. The district court denied the motion. The court disagreed that Orr was controlling and concluded that the allegations contained in the indictment sufficiently set forth the essential elements of an offense under both § 1344(1) and § 1344(2). Brandon then entered a conditional guilty plea to count 2 of the indictment which was based on a check that was drawn on an account at HEW Federal Credit Union.¹ Brandon reserved her right to appeal the district court's denial of her motion to dismiss the indictment. See Fed.R.Crim.P. 11(a)(2). Brandon brings that appeal now.

II.

We review the district court's ruling on a motion to dismiss an indictment de novo. See United States v. Loayza, 107 F.3d 257, 260 (4th Cir.1997). "[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense." Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974). Usually "an indictment is sufficient if it alleges an offense in the words of the statute," United States v. Wicks, 187 F.3d 426, 427 (4th Cir.1999), as long as the words used in the indictment "fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offence," Hamling, 418 U.S. at 117, 94 S.Ct. 2887 (internal quotation marks omitted). However, simply parroting the language of the statute in the indictment is insufficient. When the words of a statute are used to describe the offense generally, they "must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offence, coming under the general description, with which he is charged." Id. at 117-18 (internal quotation marks omitted). Thus, the indictment must also contain a "statement of the essential facts constituting the offense charged." Fed.R.Crim.P. 7(c)(1) (emphasis added); see United States v. Smith, 44 F.3d 1259, 1263 (4th Cir.1995).

III.

Brandon was indicted on six counts of bank fraud under 18 U.S.C.A. § 1344. That section provides:

Whoever knowingly executes, or attempts to execute, a scheme or artifice —

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

The indictment charges that Brandon "knowingly and intentionally execute[d] a scheme and artifice" to (1) "defraud Nations Bank, First Union National Bank, Industrial Bank, Bank of America, Crestar Bank, and the HEW Federal Credit Union" and (2) "obtain moneys and funds owned by and under the custody and control of" the specified banks "by means of false and fraudulent pretenses, representations, or promises." J.A. 9. Thus, the indictment obviously tracks the statutory text of § 1344 which, as we observed, is generally enough for the indictment to survive a motion to dismiss, see Wicks, 187 F.3d at 427, if it contains a sufficient "statement of the facts and circumstances [to] inform the accused of the specific offence... with which he is charged," Hamling, 418 U.S. at 117-18, 94 S.Ct. 2887 (internal quotation marks omitted).

The two subsections contained in § 1344 proscribe slightly different conduct, but a person may commit bank fraud by violating either subsection. See United States v. Colton, 231 F.3d 890, 897 (4th Cir.2000); see also United States v. Celesia, 945 F.2d 756, 758 (4th Cir.1991) ("[O]ne may commit a bank fraud under Section 1344(1) by defrauding a financial institution, without making the false or fraudulent promises required by Section 1344(2)."). Section 1344(1) prohibits the use of a scheme or artifice to defraud a bank. In order to prove a violation of section 1344(1), the government must demonstrate that the accused executed a scheme to defraud a federally insured or chartered bank and that the accused did so knowingly.² See United States v. Akers, 215 F.3d 1089, 1100 (10th Cir.), cert. denied, 531 U.S. 1023, 121 S.Ct. 591, 148 L.Ed.2d 506 (2000) ("[T]he elements of bank fraud are: (1) that the defendant knowingly executed or attempted to execute a scheme (i) to defraud ...; (2) that the defendant did so with the intent to defraud; and (3) that the financial institution was then insured by the Federal Deposit Insurance Corporation." (internal quotation marks omitted)); United States v. Yoon, 128 F.3d 515, 522 (7th Cir.1997) ("[T]he indictment ... must allege (1) that [the defendant] (2) knowingly (3) engaged in a scheme to defraud the banks.").

The "scheme to defraud" clause of Section 1344(1) is to be interpreted broadly, Colton, 231 F.3d at 897-98, and requires that the defendant act with the "specific intent to deceive or cheat, ... for the purpose of getting financial gain for one's self or causing financial loss to another," United States v. Moede, 48 F.3d 238, 241 (7th Cir.1995). Under the plain terms of § 1344(1), the government must prove that the defendant intended to deceive a bank through the scheme. See, e.g., United States v. Kenrick, 221 F.3d 19, 26-27 (1st Cir.) (en banc), cert. denied, 531 U.S. 961, 121 S.Ct. 387, 148 L.Ed.2d 299 (2000); United States v. Stavroulakis, 952 F.2d 686, 694 (2nd Cir.1992). "Because § 1344 focuses on the bank, rather than on the potential victims, a conviction under § 1344 is not supportable by evidence merely that some person other than a federally insured financial institution was defrauded in a way that happened to involve banking, without evidence that such an institution was an intended victim." United States v. Laljie, 184 F.3d 180, 189-90 (2nd Cir.1999). However, "[t]he bank need not be the immediate victim of the fraudulent scheme," United States v. Crisci, 273 F.3d 235, 240 (2nd Cir.2001) (per curiam) (internal quotation marks omitted), and the victim bank need not have suffered an actual loss; it is sufficient for the government to show "that a financial institution [was] exposed to an actual or potential risk of loss." Colton, 231 F.3d at 908 (internal quotation marks omitted); see also Akers, 215 F.3d at 1101 (explaining that in order to sustain "a § 1344 conviction the government does not have to prove the bank suffered any monetary loss, only that the bank was put at potential risk by the scheme to defraud" (internal quotation marks omitted)); United States v. Young, 952 F.2d 1252, 1257 (10th Cir.1991) (noting that a bank is exposed to a risk of loss when the defendant's conduct exposes the bank to civil litigation).

The allegations of the indictment clearly inform Brandon of conduct which, if proven by the government, would constitute a "scheme to defraud" the banks. The indictment alleges that Brandon stole checks from legitimate accounts, forged the account holder's signature on the checks, and then presented the forged instruments to merchants who exchanged goods for the funds held by the drawee banks. Clearly, the indictment charges Brandon with conduct that satisfies the requirement that she engage in a scheme to defraud a bank since an inevitable part of this process is the eventual presentation of the stolen and forged checks to the drawee banks, which exposes the banks to a potential risk of loss. See Laljie, 184 F.3d at 189 ("Presentation to a financial institution of a fraudulent...