United States v. Lawrence Shaw, 885 F.3d 1217

Shaw devised a scheme using PayPal to siphon funds from depositor Stanley Hsu’s bank account into accounts Shaw controlled.
Losses were borne by Hsu and PayPal, not the bank, leading Shaw to argue he did not defraud the bank under 18 U.S.C. § 1344(1).
The Ninth Circuit initially upheld Shaw’s conviction for bank fraud; the Supreme Court agreed that targeting a depositor’s account can violate § 1344(1).
The Supreme Court remanded to determine whether Shaw preserved a challenge to the district court’s jury instruction that used the disjunctive phrase “deceive, cheat or deprive,” when subsection (1) requires both deceiving the bank and depriving it of something of value.
On remand, the Ninth Circuit reviewed the record and found Shaw’s prior objections focused on the government having to prove intent to defraud the bank (versus the depositor), not that the instruction’s disjunctive wording allowed conviction for merely deceiving the bank.
The court also held that any instruction error would be harmless because overwhelming evidence showed Shaw intended to obtain value from Hsu’s account and transferred funds to his own accounts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Shaw preserved a claim that the jury instruction’s disjunctive wording allowed conviction for intent only to deceive the bank without intent to deprive it of value	Shaw (plaintiff on appeal) argues he preserved an instructional error challenge	Government argues Shaw did not preserve that specific objection	Not preserved: Shaw objected on a different statutory-interpretation ground (that government had to prove intent to cheat the bank rather than the depositor)
Whether a conviction under § 1344(1) requires intent to cause the bank a financial loss	Shaw contends bank must suffer or be intended to suffer financial loss	Government contends intent to obtain money from a depositor’s account suffices	Supreme Court and Ninth Circuit: intent to obtain money from depositor’s account satisfies § 1344(1); no need to show bank financial loss
Whether the disjunctive jury instruction (deceive, cheat or deprive) was lawful when conviction requires both deceiving and depriving the bank	Shaw argues instruction could allow conviction for deception alone	Government argues instruction did not produce reversible error	Even if error existed, it was harmless given overwhelming evidence of intent to obtain value
Whether any instructional error warrants reversal	Shaw urges reversal based on the instruction	Government urges harmless-error ruling	Harmless: rational jury would have convicted absent the alleged error; conviction affirmed

Shaw v. United States, 137 S. Ct. 462 (2016) (Supreme Court clarified § 1344(1) requires both deceiving the bank and depriving it of value, and held intent to obtain money from a depositor’s account satisfies the statute)
United States v. Shaw, 781 F.3d 1130 (9th Cir. 2015) (prior Ninth Circuit decision upholding conviction)
United States v. Gracidas-Ulibarry, 231 F.3d 1188 (9th Cir. 2000) (en banc) (articulating harmless-error standard for instructional errors)
Neder v. United States, 527 U.S. 1 (1999) (harmless-error standard: conviction may stand if error is harmless beyond a reasonable doubt)