THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
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Collection Table of Contents
Bank Fraud (18 USC 1344)
1. Bank Fraud (18 USC
1344): Bank Fraud – Elements
2. Bank Fraud (18 USC
1344): "Intent To Defraud" Defined
3. Bank Fraud (18 USC
1344): Jury Must Be Convinced That Bank Is A Member Of Federal Reserve System
Beyond A Reasonable Doubt
4. Bank Fraud (18 USC
1344): Acquiescence Or Approval of Financial Institution
5. Bank Fraud (18 USC
1344): Full Disclosure Means No Intent To Defraud
6. Bank Fraud (18 USC
1344): Two Banks Required For Check Kiting
7. Bank Fraud (18 USC
1344): Bad Check Not A False Representation
8. Bank Fraud (18 USC
1344): Use Of Uncollected Funds
9. Bank Fraud (18 USC
1344): Bank And Customer Have No Fiduciary Duty To One Another
10. Bank Fraud (18 USC 1344): Mere
Volume Or Amount Does Not Establish Scheme To Defraud
11. Bank Fraud (18 USC 1344):
Materiality As An Essential Element
12. Bank Fraud (18 USC 1344): Mere
Existence Of Check Kiting Does Not Mean Intent To Defraud
13. Bank Fraud (18 USC 1344): Good
Faith Defense To Charge Requiring Intent to Defraud
14. Bank Fraud (18 USC 1344):
Depositor’s Records Not Evidence Of Deposit
15. Bank Fraud (18 USC 1344):
Receipts Are Not Evidence Of Payment Described
16. Bank Fraud (18 USC 1344): First
Secured Lender Interest In Collateral Superior To Second Secured Lender’s
17. Bank Fraud (18 USC 1344): Breach
Of Contract Not A Crime
18. "Material" Defined
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
1. Bank Fraud (18 USC 1344): Bank Fraud: Elements
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION # 1:
The defendants are charged in Count ____ of the indictment with bank fraud in violation of § 1344 of Title 18 of the United States Code. In order for a defendant to be found guilty of that charge, the government must prove each of the following elements beyond a reasonable doubt:
First, the defendant knowingly carried out a scheme or plan to obtain money or property from _________ (name of bank) by making false statements or promises, with all of you agreeing on at least one particular false promise or statement that was made, and all of you agreeing on which bank was to provide money or property;
Second, the defendant knew that the statements or promises were false;
Third, the statements or promises would reasonably influence a bank to part with money or property;
Fourth, the defendant acted with the intent to defraud; and
Fifth, the bank at issue,_________ (name of bank), was insured by the federal government.
AUTHORITIES:
Model Criminal Jury Instructions for the Ninth Circuit,8.106 [formerly] No. 8.27A (1991).
SAMPLE INSTRUCTION # 2:
In order to find a defendant guilty of bank fraud, as charged in Count _____, you must find that the government has proven each of the following four elements beyond a reasonable doubt:
(1) The defendant executed a scheme to defraud a financial institution, namely ______ (name of bank);
(2) a false statement or misleading action by the defendant in executing that scheme to defraud was material;
(3) ______ (name of bank) was federally insured; and
(4) the defendant acted knowingly and with intent to defraud ______ (name of bank).
[Of course, you must consider Count ____ separately as to each defendant, and then consider each defendant separate from the other.]
If the government has proven each of these four elements beyond a reasonable doubt as to a particular defendant, you should find (him/her) guilty. If, on the other hand, the government has failed to prove one or more of these four elements beyond a reasonable doubt, you must find that defendant not guilty.
AUTHORITIES:
United States v. Ragosta, 970 F.2d 1085, 1089-90 (2d Cir. 1992); United States v. Davis, 989 F.2d 244, 247 (7th Cir. 1993); United States v. Hollis, 971 F.2d 1441, 1452 (10th Cir. 1992).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
2. Bank Fraud (18 USC 1344): "Intent To Defraud" Defined
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
The phrase "intent to defraud" means that the acts charged were done knowingly with the intent to deceive the bank in order to cause the loss of money.
AUTHORITIES:
II Federal Criminal Jury Instructions of the Seventh Circuit 118 [formerly 91 (1983)].
RELATED SHELLOW MATERIALS:
See also THE SHELLOW COLLECTION: Elements: Criminal Intent.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 45: Criminal Intent.
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
3. Bank Fraud (18 USC 1344): Jury Must Be Convinced That Bank Is A Member Of Federal Reserve System Beyond A Reasonable Doubt
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
You are instructed that each of the Counts in this Indictment has as one its elements that the _________ (name of bank) is a member bank of the Federal Reserve System. This is not a matter of law, but a matter of fact. You may not speculate whether this Bank was a member of the Federal Reserve System, but must be convinced of this element of the offense beyond a reasonable doubt.
CASES WHERE THE ABOVE INSTRUCTION WAS GIVEN:
United States v. Bliss, No. CR78-097 (U.S.D.C., Wyoming 1978).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
4. Bank Fraud (18 USC 1344): Acquiescence Or Approval of Financial Institution
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
A financial institution that knows all the relevant facts, and then acquiesces in or approves the actions of its employee or customer, has not been defrauded by the employee's or the customer's actions within the meaning of the bank fraud statute. Such approval of the customer's actions may be found if the bank keeps any benefits of those actions with full knowledge.
AUTHORITIES:
Essco Geometric v. Harvard Industries, 46 F.3d 718, 723-26 (8th Cir. 1995); Capital Dredge & Dock Corp. v. City of Detroit, 800 F.2d 525, 530 (6th Cir. 1986); Quick v. Peoples Bank of Cullman County, 993 F.2d 793, 797 (11th Cir. 1993); Baufield v. Safelite Glass Corp., 829 F. Supp. 285, 287 (D. Minn. 1993); Restatement (Second) of Agency §§ 94, 98 (1958); see also State v. Mullin, 225 N.W.2d 305, 307-08 (Iowa 1975) (depositor could not be convicted for cashing an overdraft check on his own account at another office of the same bank; knowledge of bank officer that account was overdrawn is imputed to entire bank, so bank not deceived); 18 U.S.C.1344.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
5. Bank Fraud (18 USC 1344): Full Disclosure Means No Intent To Defraud
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
A defendant who actually discloses or makes available to a financial institution all information material to the financial institution's decision whether to honor a check or to extend credit, or a defendant who knows or in good faith believes that the financial institution already knows all such information material to the decision whether to honor a check or to extend credit, does not have intent to defraud that financial institution.
AUTHORITIES:
See generally United States v. Baker, 19 F.3d 605, 612 (11th Cir. 1994) (quoting expansive "good faith" theory of defense instruction); Rudd v. United States, 173 F. 912, 913-14 (8th Cir. 1909); 18 U.S.C.1344.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
6. Bank Fraud (18 USC 1344): Two Banks Required For Check Kiting
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
Under the law, there can be no check kiting within a single bank, for a bank is held to know the balances of its own accounts. Accordingly, at least two separate banks are required for check kiting. In this case, I instruct you that you may not consider the alleged kiting of checks between _______ (bank # 1) and _______ (bank # 2) as bank fraud because those institutions in fact worked here as a unitary operation. You are to confine your consideration under Counts 1 and 2 to any activity you find proven between _______ (bank # 1) on the one hand, and _______ (bank # 3) on the other.
AUTHORITIES:
United States v. Doherty, 969 F.2d 425, 428 (7th Cir.), cert. denied, 506 U.S. 1002 (1992); United States v. LeDonne, 21 F.3d 1418, 1425 n.2 (7th Cir.), cert. denied, 115 S.Ct. 584 (1994); Whitney National Bank in Jefferson Parish v. Bank of New Orleans & Trust Co., 323 F.2d 290, 301-03 (D.C. Cir. 1963), rev'd on other grounds, 379 U.S. 411 (1965); First National Bank of Billings v. First Bank Stock Corp., 306 F.2d 937, 942 (9th Cir. 1962).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
7. Bank Fraud (18 USC 1344): Bad Check Not A False Representation
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
You are instructed that a check written on insufficient funds is not a false representation, a false pretense, or a false promise for purposes of the bank fraud statute. Indeed, a check is not a statement or representation at all.
AUTHORITIES:
Williams v. United States, 458 U.S. 279, 284-86 (1982).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
8. Bank Fraud (18 USC 1344): Use Of Uncollected Funds
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
You have heard testimony about the meaning of "uncollected funds," and the use of such funds by a bank customer. Keep in mind that the use of uncollected funds, by writing checks against funds deposited but not yet collected by the bank, is not necessarily fraudulent or unlawful. Indeed, writing checks in that fashion is lawful if the customer either did not know that the bank would be unable to collect a sufficient balance on deposited but uncollected funds to cover the checks written, or if the customer did not intend to defraud the bank. By the same token, if the customer wrote checks knowing that the uncollected funds could not be collected, or if the customer intended to defraud the bank by writing checks on uncollected funds, such use of a checking account may constitute bank fraud.
AUTHORITIES:
UCC §§4-210, 4-215; see also United States v. Hord, 6 F.3d 276, 283-84 (5th Cir. 1993), cert. denied, 114 S.Ct. 1551 (1994); United States v. Celesia, 945 F.2d 756, 757 (4th Cir. 1991); United States v. Schwartz, 899 F.2d 243, 246-47 (3d Cir.), cert. denied, 498 U.S. 901 (1990).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
9. Bank Fraud (18 USC 1344): Bank And Customer Have No Fiduciary Duty To One Another
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
A bank customer has no duty of care to the bank, and no obligation to treat the bank as he or she would treat his or her own interests. The converse also is true: the bank has no duty of care to its customer. Instead, the relationship between bank and customer is as between creditor and debtor -- it is an arm's length relationship.
AUTHORITIES:
Miller v. American National Bank & Trust Co. of Chicago, 4 F.3d 518, 520 (7th Cir. 1993); Jobin v. Resolution Trust Corp., 160 Bankr. 161, 171 (D. Colo. 1993).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
10. Bank Fraud (18 USC 1344): Mere Volume Or Amount Does Not Establish Scheme To Defraud
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
If you conclude that _________ (name of bank) approved the use of uncollected funds by __________ (name of defendant), then you are instructed that the mere volume of the usage of such uncollected funds does not establish a scheme to defraud, or any intent to defraud; neither does the mere amount of the dollar figures involved. Just as a defendant with fraudulent intent who sought to obtain $1 from a federally-insured bank by executing a scheme to defraud, or by false representations, would be guilty, so too a defendant who obtained $100 million from a federally-insured bank without that fraudulent intent, and without a scheme to defraud or false representations, would be innocent.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
11. Bank Fraud (18 USC 1344): Materiality As An Essential Element
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
As I have used the term, a false representation, promise or pretense must be material. You must find that materiality proven beyond a reasonable doubt before you may convict a defendant of bank fraud. By material, I mean something on which the bank to whom the statement was made reasonably did, or could have, relied upon in deciding how it would act.
AUTHORITIES:
United States v. Gaudin, 115 S.Ct. 2310, 2314-20 (1995); United States v. Davis, 989 F.2d 244, 247 (7th Cir. 1993) (reversing a §1344(a)(2) conviction on the alternate ground that the government failed to prove materiality of false statement).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
12. Bank Fraud (18 USC 1344): Mere Existence Of Check Kiting Does Not Mean Intent To Defraud
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
The mere existence of a check kiting scheme does not as a matter of law imply the specific intent to defraud necessary for a bank fraud conviction. If you find a check kiting pattern, you must consider as well all other evidence bearing on a defendant's intent, including but not limited to the level of business experience of a defendant, whether the accounts at issue had related or unrelated business purposes, whether the government has established that checks were without a legitimate purpose, whether a defendant ever had notice from a bank that his actions were unacceptable or improper, the intricacy and sophistication of the operation, and the amount of money involved. Considering all of the evidence, the government must prove a defendant's intent to defraud, like every other element of bank fraud, beyond a reasonable doubt.
AUTHORITIES:
United States v. Rodriguez-Alvarado, 952 F.2d 586, 589 (1st Cir. 1991); United States v. Vavlitis, 9 F.3d 206, 213 (1st Cir. 1993). The first sentence is a direct quote from Rodriguez-Alvarado, except that the words "to defraud" are inserted after "specific intent;" this also is quoted in Vavlitis. The second sentence is a list of factors considered in Vavlitis.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
13. Bank Fraud (18 USC 1344): Good Faith Defense To Charge Requiring Intent to Defraud
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
Good faith is a complete defense to the charges in the indictment since good faith on the part of a defendant is inconsistent with intent to defraud, which is an essential part of the charges. The burden of proof is not on the defendant to prove (his/erh) good faith, of course, since (he/she) has no burden to prove anything. The government must establish beyond a reasonable doubt that the defendants acted with specific intent to defraud as charged in the indictment.
One who expresses an opinion honestly held by (him/her), or belief honestly entertained by (him/her), is not chargeable with fraudulent intent even though (his/her) opinion is erroneous or (his/her) belief is mistaken; and, similarly, evidence which establishes only that a person made a mistake in judgment or an error in management, or was careless, does not establish fraudulent intent.
On the other hand, an honest belief on the part of the defendants that a particular business venture was sound and would ultimately succeed would not, in and of itself, constitute "good faith" as used in these instructions, if, in carrying out that venture, the defendants knowingly made false or fraudulent representations to others with the specific intent to deceive them.
AUTHORITIES:
Eleventh Circuit Pattern Criminal Jury Instructions, Special Instructions No. 17 [formerly 13].
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
14. Bank Fraud (18 USC 1344): Depositor’s Records Not Evidence Of Deposit
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
A bank's record of deposits made by a depositor is not independent evidence that the money was deposited in the bank.
AUTHORITY:
United States v. Kim, 595 F.2d 755, 759 (D.C. Cir. 1979).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC 252.5.13 [Claim of Right: Good Faith As Complete Defense To Charge Involving Intent To Defraud Or Willfulness].
See NCJIC 252.10 Innocent Intent, Good Faith
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
15. Bank Fraud (18 USC 1344): Receipts Are Not Evidence Of Payment Described
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
Receipts are not independent evidence of the making of the payment described therein.
AUTHORITIES:
United States v. Kim, 595 F.2d 755, 759 (D.C. Cir. 1979), citing, United States v. Watkins, 519 F.2d 294, 296 (D.C. Cir. 1975).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
16. Bank Fraud (18 USC 1344): First Secured Lender Interest In Collateral Superior To Second Secured Lender’s
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
You have heard evidence that ________ (name of bank # 1) was the first to have a security interest in vehicles held in inventory by ____________ (name of defendant person or company), and that ________ (name of bank # 2) later acquired a second security interest in some of the same vehicles.
As a matter of law, I instruct you that the first secured lender to perfect its security interest has an interest in collateral that is in all ways superior to a second secured lender's. Whatever interest the second lender may obtain in the property at issue, the second lender takes nothing at all from the first secured lender and does not harm the interests of the first secured lender in any way. From the standpoint of the legal rights of the first secured lender, it does not matter whether there is a second secured party, a third secured party, or no other secured parties.
AUTHORITIES:
Wis. Stat. §§409.302(1), 409.312(5)(a), 409.301(1)(a).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
17. Bank Fraud (18 USC 1344): Breach Of Contract Not A Crime
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION:
If you conclude that [the] ____________ (name of defendant person or company) breached, or violated, their agreement with ________ (name of bank # 1), either by later giving ________ (name of bank # 2) a second security interest in some of the same ________ (items, e.g., vehicles) that served as ________’s (name of bank # 1) collateral as charged in Count 1, or by failing to send ________ (name of bank # 1) the proceeds of sales of certain ________ (items, e.g., vehicles) in a timely manner as charged in Count 3, but you conclude that [the] ____________ (name of defendant person or company) did nothing more than breach that contract with ________ (name of bank # 1) , you must find the defendants not guilty. Breach of a contract is not a crime; only if the government has proven all of the elements of these offenses as explained to you in my instructions are either of the defendants guilty of a crime.
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].
THE SHELLOW COLLECTION
Jury Instructions By James M. Shellow of Wisconsin
18. "Material" Defined
ALERT: Carefully review the Caveats and Disclaimers before using these materials.
SAMPLE INSTRUCTION # 1:
As used in these instructions, the term "material" means something that ordinarily and reasonably would affect the bank's decision to extent credit to the defendant or (his/her) company.
AUTHORITIES:
United States v. Davis, 989 F.2d 244, 246-47 (7th Cir. 1993); United States v. Kwiat, 817 F.2d 440, 445 (7th Cir.), cert. denied, 484 U.S. 924 (1987).
SAMPLE INSTRUCTION # 2:
As I have used it here, the word "material" means a statement or action that has a natural tendency to influence, or to be capable of affecting or influencing, the actions of a bank.
AUTHORITIES:
United States v. Swaim, 757 F.2d 1530, 1534 (5th Cir), cert. denied, 474 U.S. 825 (1985); United States v. Notarantonio, 758 F.2d 777, 785 (1st Cir. 1985); United States v. Brack, 747 F.2d 1142, 1150 (7th Cir. 1984), cert. denied, 469 U.S. 1216 (1985).
RELATED NCJIC MATERIALS:
See NCJIC Chapter 103: Theft/Larceny Based Crimes.
See NCJIC Federal Model Instructions by Offense: 18 USC 1344: [Bank Fraud].