WASHINGTON (CN) – The Supreme Court called for additional proceedings Monday in the appeal of a PayPal fraudster who says scheming to rip off the customer of a bank is different from ripping off the bank itself.
Lawrence Shaw conceived the plot in 2007 while living with a woman who handled the mail for her father’s boss, Stanley Hsu, while Hsu was home in Taiwan.
The mail included Hsu’s statements from Bank of America, and Shaw was able to glean Hsu’s personal and account information from them.
Using a fake email account in Hsu’s name, Shaw opened a PayPal account that he linked the account to Hsu’s BofA account.
Shaw already had a joint account at Washington Mutual with the daughter of Hsu’s employee, which he opened without her knowledge, and he opened savings and checking accounts at WaMu in his father’s name, as well, also without this man’s knowledge or permission.
He linked the savings account to the fake Hsu PayPal account, ultimately sending himself approximately $307,000 of Hsu’s money between June and October 2007.
PayPal had flagged the WaMu link as suspicious, but Shaw faxed it a copy of Hsu’s Bank of America account statement, and a bank statement he had altered to appear as if Hsu owned the WaMu account. He also sent a doctored copy of Hsu’s driver’s license.
When Hsu’s son discovered the scheme and closed the account, Bank of America returned approximately $131,000 to Hsu, and PayPal reimbursed that amount.
Hsu had to bear more than $170,000 of the loss, however, because he did not notify the banks of the activity within 60 days of many of the fraudulent transactions.
A federal jury ultimately convicted Shaw of 14 counts of bank fraud, but Shaw claimed prosecutors failed to show fraudulent intent.
He claimed he had intended only to defraud Hsu, not his bank.
Though the justices rejected Shaw’s arguments Monday, the case is not over yet.
Vacating the underlying judgment, the Supreme Court remanded with orders for the Ninth Circuit to hold further proceedings regarding the jury instructions.
Shaw says the instructions at his trial “could be understood as permitting the jury to find him guilty if it found no more than that his scheme was one to deceive the bank but not to ‘deprive’ the bank of anything of value.”
“The parties agree, as do we, that the scheme must be one to deceive the bank and deprive it of something of value,” Justice Stephen Breyer wrote for the court.
“For reasons previously pointed out, we have held that a plan to deprive a bank of money in a customer’s deposit account is a plan to deprive the bank of ‘something of value’ within the meaning of the bank fraud statute,” Breyer added. “The parties dispute whether the jury instruction is nonetheless ambiguous or otherwise improper. We leave to the Ninth Circuit to determine whether that question was fairly presented to that court and, if so, whether the instruction is lawful, and, if not, whether any error was harmless in this case.”