Case Information
*2 BARRON , Circuit Judge
. Miсhael O'Donnell appeals from his conviction on one count under 18 U.S.C. § 1344, the Bank Fraud Act. We affirm.
I.
O'Donnell was indicted under the Bank Fraud Act (the Act) on June 15, 2015. The Act provides:
Whoever knowingly executes, or attempts to execute, a scheme or artifice--
(1) to defraud a 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 financial institution, by means of false or fraudulent pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
18 U.S.C. § 1344.
The indictment alleged that O'Donnell violated subsections (1) and (2) of the Act. Specifically, the indictment alleged that he "knowingly exeсuted and attempted to execute a scheme and artifice to defraud Countrywide Bank, FSB, a federally- insured financial institution, and to obtain money . . . and other property owned by and under the custody and control of Countrywide Bank, FSB, by means of false and fraudulent pretenses, representations, and promises, concerning material faсts and matters in conjunction with a mortgage loan in the amount of *3 $44,000 for property located at 40 Harbor Street, Salem, Massachusetts."
Following indictment, O'Donnell waived his right to a jury trial and opted for a bench trial. He also entered into a stipulation. The stipulation set forth the following facts concerning the scheme alleged in the indictmеnt.
While serving as a self-employed loan originator operating through his loan originator business, AMEX Home Mortgage Corporation, O'Donnell completed loan applications and submitted them to mortgage companies on behalf of individuals seeking to purchase or refinance property. In 2007, O'Donnell sought to defraud mortgage lеnders in connection with the refinancing of the property in Salem, Massachusetts referenced in the indictment.
The scheme began with O'Donnell's efforts to obtain a mortgage loan on a different property, which was owned by a woman named L.T. In connection with that transaction, O'Donnell submitted a mortgage loan application containing false information about L.T. to Homecomings Financial Network, Inc. O'Donnell also paid, from a bank account controlled by AMEX, approximately $37,000 that L.T. was supposed to put down herself to secure the loan for that property.
After O'Donnell was successful in securing the mortgage loan in L.T.'s name, O'Donnell then sought to secure a sеcond mortgage loan in L.T.'s name, this time for the Salem, *4 Massachusetts property named in the indictment. O'Donnell sought this loan in order to obtain the $37,000 that he had put down to secure the first loan in L.T.'s name.
O'Donnell submitted the application for this second loan to a different entity from the one to which he had submitted the application for the first loan. The stipulation referred to the entity to which O'Donnell submitted the second loan application as follows: "Countrywide, where Countrywide Home Loans employees underwrote and processed the application."
This second loan application contained many of the same false statements that were in O'Donnell's aрplication for the first loan in L.T.'s name. O'Donnell also provided fraudulent responses to various follow-up inquiries in the course of seeking this second loan. When this second loan closed, O'Donnell pocketed most of the proceeds.
The key issue at trial concerned whether O'Donnell's fraudulent scheme to secure the secоnd loan targeted Countrywide Bank, FSB, as the indictment alleged, or only Countrywide Home Loans, as O'Donnell contended. The identification of the intended target was crucial because O'Donnell stipulated that Countrywide Bank, FSB was a "financial institution" within the meaning of the Act, while the government did not dispute that Countrywide Home Loans was not.
In ruling from the bench at thе close of evidence, the District Court explained that it had determined that the record showed that O'Donnell was "on notice" that Countrywide Bank, FSB was "part of this transaction in some form" in the second loan transaction. With that finding in place, the District Court then found that O'Donnell was guilty of "attempt[ing]" to execute -- though not of actually executing -- a scheme or artifice described in subsections (1) and (2) both because O'Donnell had intended to defraud Countrywide Bank, FSB and because he had intended to obtain money and property that was under Countrywide Bank, FSB's custody and control. This appeal followed.
II.
"We review a bench trial conviction de novo, examining
the facts and inferencеs in the light most favorable to the
verdict." United States v. Ngige, 780 F.3d 497, 503 (1st Cir.
2015) (citing United States v. Tum, 707 F.3d 68, 69 (1st Cir.
2013)). The ultimate question is whether "any rational trier of
fact could have found the essential elements of the crime beyond
a reasonable doubt." United States v. Grace,
Cir. 2004) (quoting United States v. Casas,
We start with the Supreme Court's most recent case construing the Act, Loughrin v. United States, 134 S. Ct. 2384
(2014). Loughrin makes clear that subsections (1) and (2) of the Act set out two routes to proving criminal liability under the statute. See id. at 2389-92. Loughrin also makes clear that proof that the defendant violated either subsection is sufficient tо support a conviction under the Act. Id. Because we conclude that the evidence in this case was sufficient to prove a violation under subsection (1), we confine our analysis to what the evidence shows regarding that portion of the Act. [1] See United States v. Gaw, 817 F.3d 1, 4 (1st Cir. 2016) ("[W]e must affirm each count if the evidence is sufficient for the jury to have convicted [the defendant] under any one of the relevant theories of liability presented to the jury as to that count.").
Under subsection (1), a defendant who "knowingly executes or attempts to execute" a scheme or artifice to defraud a "financial institution" violates the Act. [2] O'Donnell contends *7 that because the District Court found him guilty under subsection (1) only of "attempt[ing]" to defraud a financial institution (rather than of actually "knowingly execut[ing]" such a scheme), the government was required to show that O'Donnell specifically intended to defraud Countrywide Bank, FSB and that he took a substantial step towards doing so. The government does not appear to disagree. The government instead simply contends that thе evidence sufficed to show that O'Donnell did specifically intend just that.
O'Donnell's contrary argument proceeds in the following
steps. He first argues that, under the "attempt" prong of
subsection (1), the government had to prove that he specifically
intended to defraud a "financial institution." He thus contends
that the government had to prove that he specifically intended to
defraud Countrywide Bank, FSB, and not simply Countrywide Home
Loans. After all, the parties agree that only Countrywide Bank,
FSB is a "financial institution" under the Act. For that reason,
convicted for violating the Act if he used fraudulent means to
attempt to obtain money or property that he knew was "owned by, or
under the custody or control оf, a financial institution."
Loughrin,
*8 an attempt to defraud Countrywide Home Loans would not be an attempt to defraud a "financial institution" and thus would not be a crime under subsection (1).
O'Donnell then contends that the evidence shows that, at most, Countrywide Bank, FSB "may have been involved in some way in the transaction." As a result, O'Donnell contends, he cannot have been found guilty under subsection (1), because the evidence in the record that supports a finding that O'Donnell knew that Countrywide Bank, FSB was involved "in some way" is insufficient to show that he specifically intended to defraud Countrywide Bank, FSB. [3]
To support this argument about the insufficiency of the evidence, O'Donnell contends that the record reveals what he characterizes as only a "perfunctory reference" to Countrywide *9 Bank, FSB in the papers that he received in connection with his application for, and the approval of, the second loan transaction. He also notes that most of the loan documents that he saw referenced Countrywide Home Loans and not Countrywide Bank, FSB. Further, he points out that the documents that he did see and that referred to Countrywide Bank, FSB, also contained references to Countrywide Home Loans. Thus, he contends that, although the evidence shows that he may have specifically intended to defraud Countrywide Home Loаns, the evidence that he knew of Countrywide Bank, FSB's involvement in the transaction is simply too slight to show that he specifically intended to defraud Countrywide Bank, FSB.
The first of the documents that O'Donnell received that referred to Countrywide Bank, FSB, however, was not just any document. It was the loan conditions sheet, which contained the loan's terms and the conditiоns for its approval. And that document did not just contain any reference to Countrywide Bank, FSB. It made the following statement: "Thank you for submitting your loan to Countrywide Bank, FSB.! We sincerely appreciate your business." (emphasis added).
O'Donnell does not deny receiving this document. In fact, the record shows that he responded to the document by supplying the specific and detailed information (fabricated though it was) that the conditions sheet sought.
In addition, O'Donnell received another document that referenced Countrywide Bank, FSB. This second document was the final loan approval document. This document informed O'Donnell that, by submitting the information requested by the conditions sheet, he had met the rеquirements that it had set forth. And this second document made the same statement that the conditions sheet had made: "Thank you for submitting your loan to Countrywide Bank, FSB.! We sincerely appreciate your business." Moreover, the record shows that, after receiving this second document, O'Donnell received a check made out to his business in consequence of the loan application's approval.
Given the documents that O'Donnell concededly saw in carrying out his fraudulent scheme, the nature of their references to Countrywide Bank, FSB, and what the record shows about what happened after he received each document, the record clearly supports a finding thаt O'Donnell was aware that Countrywide Bank, FSB -- and not just Countrywide Home Loans -- was involved in approving the loan that O'Donnell was seeking to obtain through fraudulent means.
Moreover, O'Donnell received these documents referencing
Countrywide Bank, FSB while he was concededly engaged in a
fraudulent scheme to secure a loan via false statements. And he
was, by his own account, a sophisticated actor in the loan
origination business. He thus fairly could have been understood
*11
to have been aware, as we observed more than two decades ago, that
"financial transactions are becoming increasingly integrated and
complex" and that "the effects of fraudulent aсtions against one
institution are increasingly likely to spill over and
detrimentally affect others." Brandon, 17 F.3d at 427. As a
result, the documents at issue sufficiently support the reasonable
inference that, because O'Donnell was "on notice" of Countrywide
Bank, FSB's involvement in the loan's approval, O'Donnell
specifically intended to defraud Countrywide Bаnk, FSB and not
simply Countrywide Home Loans. See United States v. Munyenyezi,
To be sure, there is no evidence that O'Donnell was aware
that Countrywide Bank, FSB was a "financial institution." But,
*12
there is no dispute that it is. And we have long held that the
defendant need not have scienter of that necessary fact in order
to be found guilty under the Act. See United States v. Brandon,
O'Donnell next contends that, even if the record
supports the inference that he specifically intended to defraud
Countrywide Bank, FSB, the government still had to show that he
took a "substantial step" towards executing that fraudulent scheme
in order for him to be convicted of "attempt[ing]" to execute such
a scheme. But, as we have already pointed out, the record reveals
that O'Donnell responded to the conditions sheet in which
Countrywide Bank, FSB thanked him for submitting his loan by
sending fraudulent information in order to secure the loan. The
sending of such information in response to that request qualifiеs
as a "substantial step" because it is an act "of such a nature
that a reasonable observer, viewing it in context, could conclude
*13
beyond a reasonable doubt that it was undertaken with a design to
violate the statute." See United States v. Dworken,
In so concluding, we recognize that the record shows that O'Donnell sent his response containing the fabricated information to Countrywide Home Loans -- rather than to Countrywide Bank, FSB. And we recognize, too, that the papers that O'Donnell received in connection with the loan transaction referred to both Countrywide Home Loans and to Countrywide Bank, FSB. But, as we have explained, the nature of the references in those doсuments to Countrywide Bank, FSB are such that the record adequately supports the inference that O'Donnell specifically intended to defraud that latter entity and not simply the former one. Thus, the record sufficiently supports the finding that, by submitting fraudulent information to secure the loan in response to the conditions sheet that thanked O'Donnell for submitting his loan tо Countrywide Bank, FSB, O'Donnell was taking a substantial step in his attempt to execute a fraudulent scheme directed at that same entity, even though he sent the response itself to Countrywide Home Loans.
Finally, O'Donnell argues that it was legally impossible for him to commit attempted bank fraud if he did not commit the completed crime, given that he specifically intended to defraud only Countrywide Home Loans and that he was not found guilty of doing anything more than attempting to defraud Countrywide Bank, *14 FSB. This contention necessarily rests, however, on the premise that the evidence showing O'Donnell's awareness of Countrywide Bank, FSB's involvement in the loan transaction is insufficient to support the finding that O'Donnell specifically intended to defraud Countrywide Bank, FSB. But, as we have explained, that premise is mistaken, given the documents thanking O'Donnell for submitting his loan to Countrywide Bank, FSB and O'Donnell's admitted sophistication in the loan origination business. Thus, O'Donnell's legal impossibility argument is without substance.
III.
For the foregoing reasons, the conviction is affirmed .
Notes
[1] Our prior cases did not always distinguish between the two subsections of the statute in the way that Loughrin now requires.
[2] In contrast to subsection (1), under subsection (2), Loughrin makes clear, the government must show that "the defendant intend[ed] 'to obtain any of the moneys . . . or other property owned by, or under the custody or control of, a financial institution.'" Loughrin, 134 S.Ct. at 2389 (quoting 18 U.S.C. § 1344(2)). Thus, under subsection (2), a defendant may be
[3] We note that the government expressly argued to the District
Court that a showing that there was a "risk of loss" to the
financial institution was required under subsection (1), and it
appears that the District Court made its finding of guilt under
subsection (1) on the understanding that a "risk of loss" showing
was required. O'Donnell does not challenge on appeal, however,
the "risk of loss" finding that the District Court made. We thus
treat as waived any argument by O'Donnell regarding the "risk of
loss" issue. The first time he directly addresses the risk of
loss issue is in his reply brief, where he merely notes that the
Supreme Court may "illuminate the scienter requirement" for
subsection (1) in Shaw v. United States,
[4] O'Donnell's contention that the loan at issue in this case
was not an "integrated transaction," as was true of the loan
involved in United States v. Edelkind,