United States v. O'Donnell
2016 U.S. App. LEXIS 18824
| 1st Cir. | 2016Background
- Michael O'Donnell, a self-employed loan originator, was indicted under 18 U.S.C. § 1344 for scheming to obtain mortgage proceeds by fraudulent loan applications related to property in Salem, MA.
- O'Donnell previously procured a loan in another woman's (L.T.) name using false information and funded her down payment (~$37,000) from his business account.
- He then applied for a second loan in L.T.'s name (the Salem property) to recoup that $37,000, submitting false information and follow-up responses; most proceeds were pocketed.
- O'Donnell waived a jury, stipulated to many facts (including that Countrywide Bank, FSB is a “financial institution”), and was tried before the district court.
- The central factual dispute was whether O'Donnell specifically intended to defraud Countrywide Bank, FSB (a covered financial institution) or only Countrywide Home Loans (not a covered institution).
- The district court found O'Donnell guilty of attempting to violate § 1344; the First Circuit affirmed, concluding the record supported that he was on notice Countrywide Bank, FSB was involved and took substantial steps in the attempted fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attempted § 1344 requires specific intent to defraud a financial institution | Gov: must show specific intent to defraud the named financial institution (Countrywide Bank, FSB) | O'Donnell: he only intended to defraud Countrywide Home Loans, not the insured bank | Held: Specific intent to defraud the financial institution is required for an attempt; record supports that intent toward Countrywide Bank, FSB |
| Whether evidence showed defendant knew Bank was involved (sufficiency) | Gov: documents thanking him for submitting loan to Countrywide Bank, FSB and his responses support awareness | O'Donnell: references to Bank were perfunctory; most docs named Countrywide Home Loans only | Held: Sufficient evidence—loan conditions and approval documents referencing Countrywide Bank, FSB and defendant's responses permit inference he knew Bank was involved |
| Whether defendant took a "substantial step" for attempt liability | Gov: submitting fabricated information in response to conditions sheet was a substantial step | O'Donnell: his responses went to Countrywide Home Loans, not the Bank, so no substantial step toward defrauding the Bank | Held: Sending fraudulent information after being on notice of the Bank's involvement constitutes a substantial step |
| Whether scienter as to the institution's insured status is required | Gov: scienter as to institution’s federal-insured status not required | O'Donnell: argues lack of awareness of Bank-status undermines conviction | Held: No requirement that defendant know the institution is federally insured; prior precedent controls |
Key Cases Cited
- Loughrin v. United States, 134 S. Ct. 2384 (2014) (explains § 1344 has two alternative routes to liability and that proof of either suffices)
- United States v. Brandon, 17 F.3d 409 (1st Cir. 1994) (defendant need not know institution is federally insured for § 1344 liability)
- United States v. Munyenyezi, 781 F.3d 532 (1st Cir. 2015) (standard for reviewing sufficiency of evidence and inferences supporting conviction)
- United States v. Dworken, 855 F.2d 12 (1st Cir. 1988) (definition of a "substantial step" in attempt context)
- United States v. Edelkind, 467 F.3d 791 (1st Cir. 2006) (discusses "integrated" transactions; distinguishing facts here do not require integration)