U.S. v. Davis, 92-2188
| Decision Date | 17 March 1993 |
| Docket Number | No. 92-2188,92-2188 |
| Citation | 989 F.2d 244 |
| Parties | 20 UCC Rep.Serv.2d 509 UNITED STATES of America, Plaintiff-Appellee, v. Jesse L. DAVIS, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Barry R. Elden, Asst. U.S. Atty., Criminal Receiving, Appellate Div., Chicago, IL, Scott A. Verseman (argued), Office of the U.S. Atty., Rockford, IL, for plaintiff-appellee.
Carol A. Brook, Camille B. Conway (argued), Office of the Federal Public Defender, Chicago, IL, for defendant-appellant.
Before BAUER, Chief Judge, and CUDAHY and POSNER, Circuit Judges.
A jury found Jesse Davis guilty of six counts of bank fraud in violation of 18 U.S.C. § 1344(a)(2) (now 1344(2), immaterially amended), which makes it a crime to "knowingly execute ... a scheme ... to obtain any of the moneys ... or other property owned by ... a federally insured financial institution by means of false or fraudulent pretenses, representations, or promises." The judge sentenced Davis to concurrent one-year prison terms.
Someone--but perhaps not Davis--had submitted a federal income tax return in the name of Bernard Williams. Williams--not to be confused with the distinguished English philosopher of that name (author of such books as Moral Luck and Ethics and the Limits of Philosophy )--was in fact a homeless person who had no income and had never filed a return. The return claimed a refund of $12,604, and the Internal Revenue Service duly mailed to the phony address given on the return a check for that amount made out to Bernard Williams. Either by himself or with Davis's aid, Freddie Green (who was tried and convicted with Davis) tricked Williams--apparently by making him think he was signing a job application--into endorsing the check to Green, who then twice tried unsuccessfully to cash it either (the record is unclear) at banks or at currency exchanges. Unable to cash the check, Green gave it to Davis, who opened an account in the name of "Pro-Tech Chemical Company" at Independence Bank of Chicago, a federally insured bank. The signature card, which Williams had again been tricked into signing, authorized both Davis and Williams to write checks on the account. Pro-Tech was a mythical company; Davis disputes this, but the jury could and doubtless did find against him on this issue. Once the account was open and the IRS check was deposited and cleared, Davis wrote checks, mainly to cash or to Green, until the account had less than $16 in it.
Count I charged that the opening of the account, the deposit of the check from the IRS, and the subsequent draining of the account constituted a scheme to defraud the bank by the false representation that Pro-Tech was an actual business. The other five counts of bank fraud of which Davis was convicted involved the deposit of eight money orders in the Pro-Tech account. These were forged money orders, which the bank never collected. As a result, it lost money when Davis and Green drained the account. It lost no money on the IRS check, however, of which it was a holder in due course despite the fact that the payee both was an imposter's tool and was tricked into endorsing the check. So at least we read UCC § 3-404 and the Official Comment thereto, and we do not understand the government to be arguing otherwise, or to be arguing that the bank was placed on notice of the fraud by the attempted endorsements to Green on the back of the check, which are marked "Void"--but we do not know who marked them.
Davis's challenge to the counts involving the money orders has no possible merit, as we shall see, but we think he should have been acquitted on Count I. He may well have committed fraud against the Internal Revenue Service--with which he was not charged. But only in the most literal, hypertechnical sense could he be said to have schemed to defraud the bank of money or other property belonging to it. It is true that once the IRS check cleared, the $12,604 that the IRS had promised to pay Bernard Williams became the bank's property,...
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