U.S. v. Briggs

• Decision Date: 04 January 1991
• Docket Number: Nos. 90-1201,90-1204 and 90-1205,s. 90-1201
• Citation: 920 F.2d 287
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Susan Carol BRIGGS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 287

920 F.2d 287

59 USLW 2453

UNITED STATES of America, Plaintiff-Appellee, v. Susan Carol BRIGGS, Defendant-Appellant.

Nos. 90-1201, 90-1204 and 90-1205.

United States Court of Appeals Fifth Circuit.

Jan. 4, 1991.

Robert Udashen, Dallas, Tex., for defendant-appellant.

Delonia A. Watson, Asst. U.S. Atty., Marvin Collins, U.S. Atty., Dallas, Tex., for plaintiff-appellee.

Appeals from the United States District Court for the Northern District of Texas.

Before GOLDBERG, KING and DUHE, Circuit Judges.

GOLDBERG, Circuit Judge:

Susan Briggs stole over $5 million dollars from her employers by initiating wire transfers from their accounts to hers and others'. She pled guilty in 1986 to charges of bank fraud and transportation of stolen money and was sentenced to a total of thirty years' imprisonment. Subsequently, in a 28 U.S.C. Sec. 2255 motion, she challenged the bank fraud (18 U.S.C. Sec. 1344) conviction, arguing that her plea was not knowing and voluntary because her criminal acts did not constitute bank fraud. Briggs' motion was denied, and she appealed. She also requests resentencing on the remaining counts, although she does not challenge their validity.

Because we find that Briggs' plea was not supported by facts sufficient to constitute bank fraud, we vacate her conviction for bank fraud and remand in order to allow her to enter a new plea. In addition, we vacate her sentence on the transportation of stolen money charges, and remand in order that the district court either 1) supplement the record to show affirmatively that it did not consider the invalid bank fraud conviction in sentencing Briggs on the other charges; or 2) resentence Briggs free from any consideration of the invalid conviction.

I. Facts and Proceedings Below

From 1981 through 1986, Susan Briggs worked for Electronic Data Systems ("EDS") and Southmark Corporation, both located in Dallas. She was employed in the Treasury Department at EDS and as an Assistant Cash Manager at Southmark. Her duty at both corporations was to cause transfers of funds from company bank accounts "when necessary for actual business transactions." See Rec. Excerpts at 58, 59 (Defendant's Factual Resume). The record does not otherwise detail the scope of Briggs' authority nor indicate to what extent, if at all, the banks were responsible for monitoring and policing the legitimacy of her transactions.

Regardless of the exact scope of her authority, Briggs exceeded the bounds when she decided to instigate some transfers of her own. From 1984 through 1986 she initiated over a dozen unauthorized transfers from company accounts belonging to Southmark and to National Heritage Insurance Company, an EDS subsidiary. These transfers were made to Dallas accounts belonging to herself, her two sons, and a friend. Some of this money she and her friend then transferred from their local accounts to accounts in the Cayman Islands. So far as the record discloses, Briggs' employers suffered these losses, not the banks from which the money was transferred. ¹ There is no indication that the banks were or could have been found civilly liable to EDS and Southmark.

Precisely how Briggs effected these transfers is unclear. The factual resume supporting Briggs' plea states merely that she "caused" various wire transfers; the indictments use the same phraseology. A letter from Southmark's counsel states that Briggs accomplished her scheme by "manipulation of wire transfer instructions." An FBI agent testified at the preliminary hearing that Briggs had "authorized, initiated" or "intiat[ed] and approv[ed]" at least one of the wire transfers, and that the transfer had been "physically initiated" by a bank employee "based on instructions from" Briggs. The nature and content of these instructions is not revealed.

By late 1986 Briggs' extracurricular activity had netted her $5.2 million and a variety of criminal charges. The latter, filed August and September 1986 in two indictments and an information, consisted of three counts of bank fraud (18 U.S.C. Sec. 1344), seven counts of wire fraud (18 U.S.C. Sec. 1343), ten counts of transportation of stolen money (18 U.S.C. Sec. 2314), and related counts of conspiracy (18 U.S.C. Sec. 371) and aiding and abetting. Briggs pled guilty to two bank fraud counts and four stolen money counts, in exchange for which the government agreed to dismiss the remaining charges and prefer no other charges relating to her employment with EDS and Southmark. She was sentenced to a total of twenty years on the stolen money charges and ten years on the bank fraud charges, with these sentences to run consecutively. She began serving her sentence in December 1986.

Briggs did not appeal her convictions, but she did file a motion for reconsideration seeking reduction of her sentence, pursuant to former Fed.R.Crim.P. 35. ² It was denied. In April 1989, she filed a 28 U.S.C. Sec. 2255 ³ motion to vacate the judgment and sentence as to the bank fraud conviction. In March 1990, the district judge adopted a magistrate's recommendation that the motion be denied. Briggs subsequently appealed.

Briggs attacks only the judgment and sentence as to the bank fraud charges, which account for ten years of her thirty-year sentence; however, as remedy she seeks not only reversal of the bank fraud charges but also resentencing on the remaining transportation of stolen money charges.

II. Issues

This case presents several questions. Central to our inquiry is the interpretation of former 18 U.S.C. Sec. 1344, the bank fraud statute. We also consider whether Briggs' guilty plea precludes her challenge to this conviction, the nature of the remedy to which she is entitled, and whether she must be resentenced on the other charges.

A. Bank Fraud Statute

As enacted in 1984, and as applicable to this case, the bank fraud statute provided in relevant part as follows:

(a) Whoever knowingly executes, or attempts to execute, a scheme or artifice--

(1) to defraud a federally chartered or insured 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 federally chartered or insured financial institution by means of false or fraudulent pretenses, representations, or promises, shall be [fined or imprisoned].

See former 18 U.S.C. Sec. 1344(a). ⁴

Briggs was charged under an indictment and an information whose language comprehends both provisions of Sec. 1344(a), so her conviction will stand if it can be sustained under either subsection. Cf. United States v. Medeles, 916 F.2d 195, 197-98 (5th Cir.1990) (where indictment and jury charge do not allege elements of a subsection of statute, conviction cannot be sustained under that subsection). We consider each provision in turn.

1. Defrauding a Bank

Former subsection (a)(1) prohibits "a scheme or artifice ... to defraud a financial institution." Briggs contends that this section is inapplicable to her conduct, as her employers suffered the losses, not the banks. The banks were not even exposed to liability, so far as the record indicates. Accordingly, Briggs argues, she may have defrauded her employers, but not the banks.

Now, in light of the fact that the mail and wire fraud statutes have been used to prosecute frauds against intangible property rights, one might construct a response to Briggs' suggestion. Conceivably, the banks, though they are not Briggs' employers, have a right to expect honesty in the performance of her duties related to wire transfers. Maybe this right is an intangible property right. Perhaps Briggs defrauded the banks of this "property." In a strictly grammatical sense, the charges to which Briggs pled guilty might seem open to such an interpretation, because the verb "to defraud" appears in both without an indirect object specifying what she stole. ⁵

However, the government does not make this argument (or any argument with respect to subsection (a)(1)). It is not hard to understand why. Even if grammatically plausible, an intangible property rights interpretation of these charges would be strained at best. Neither the indictment nor the information to which Briggs pled guilty mention intangible property or the right to honest services. As overt acts supporting the charges, both cite only the theft of funds. Accordingly, we think the fair reading of the indictment and information is that Briggs was charged with defrauding the financial institutions of "money and funds." ⁶

Under this reading, Briggs' bank fraud conviction cannot be sustained under Sec. 1344(a)(1). She simply did not defraud the banks out of anything belonging to them.

2. Obtaining Funds By Means of False Representations

The second provision of former section 1344, subsection (a)(2), comes closer to Briggs' conduct. This subsection punishes anyone who

knowingly executes, or attempts to execute, a scheme or artifice ... to obtain any of the moneys, funds, credits, assets, securities or other property owned by or under the custody or control of a federally chartered or insured financial institution by means of false or fraudulent pretenses, representations, or promises

See former 18 U.S.C. Sec. 1344 & 1344(a)(2).

As the funds in this case were not owned by the banks, the parties focused their discussion on the "custody or control" language. It is unclear how to square this phrase with the legislative history, which emphasizes that the purpose of the statute is the protection of financial institutions themselves. ⁷ Is the financial institution the victim in a scheme whose execution causes it no loss? ⁸ Briggs says no. Noting the dangers that inhere in over-federalizing garden variety fraud, she suggests that the "custody or control" language only applies where the defendant is an employee of the bank from which she obtains the funds. This interpretation, although imaginative, finds no support in the statutory text or legislative history, other than...