PayPal Fraudster Gets Washington Audience

     WASHINGTON (CN) — The Supreme Court agreed Monday to decide whether prosecutors going after a PayPal fraudster should have shown that he intended to rip off a bank rather than one of its customers.
     Lawrence Shaw came up with the scheme 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.
     The trial court refused, and the Ninth Circuit found no error in this holding last year.
     “We … decline to read an additional element into § 1344(1) that Congress did not include; that does not serve the Congressional purpose; and that could needlessly entangle judges and juries in the intricacies of banking law,” the March 2015 ruling says. “The district court correctly refused instructions that included such a requirement.”
     Though the Supreme Court took up Shaw’s appeal Monday, it did not issue any comment on the case, as is its custom. It did note that Shaw can proceed in forma pauperis.

%d bloggers like this: