Mark Scott’s attorney argues lying to banks isn’t bank fraud
Mark Scott’s attorney has put forward the extraordinary argument that lying to banks isn’t bank fraud.
The claim was made in an October 23rd letter to the court, regarding the DOJ’s request to charge Mark Scott with bank fraud.
Scott was indicted on bank fraud via an S10 superseding indictment earlier this month.
As summed up by Scott’s attorney;
The Superseding Indictment alleged that unspecified false statements made by Scott and others were introduced into the global financial system through various entities including foreign banks that are not financial institutions under the Bank Fraud statute somehow making their way to FDIC insured banks which made transfers of certain funds that were the object of the scheme.
Scott’s attorney thus argues that because Scott allegedly lied to banks and financial institutions that aren’t FDIC insured (essentially non-US), no bank fraud was committed.
The evidence against Mr. Scott involves almost exclusively his dealings with off-shore banks and financial institutions, not institutions insured by the FDIC.
The Fenero Funds Mr. Scott controlled that allegedly received proceeds of a OneCoin wire fraud scheme had relationships with the Bank of Ireland, DMS Bank in the Cayman Islands and other non-U.S. financial institutions.
The Government has repeatedly represented that Mr. Scott made various false statements to these non-U.S. financial institutions directly or through intermediary fund managers such as Apex in order to convince these non-U.S. banks to accept funds from his investors and to make investments and other financial transactions through these accounts.
Such conduct would not be bank fraud.
Scott’s attorney has asked the court to prohibit the DOJ from representing to the jury that Scott’s alleged lies to ‘Apex or non-U.S. banks alone could constitute bank fraud.‘
It is important that the Court not permit the Government to conflate in its jury addresses or witness examinations “lying to banks” around the world with the more limited concept of bank fraud conspiracy.
On the flipside, the DOJ claims it identified transfers tied to Scott at at least three U.S. financial institutions.
As an alternative Scott’s attorney proposes the DOJ make this evidence available for jury instruction (part of the legal rules jurors follow when deciding a case).
A decision on the matter remains pending. Stay tuned…
In other words, defrauding non-US banks is not “bank fraud” under US Law?
Tsk, tsk. Did they actually read 18 USC 1030(e)(4)?
So if lying to a bank is not bank fraud, how do you commit bank fraud if you tell the truth?
Bank fraud can be defined as an unethical and/or criminal act by an individual or organization to illegally attempt to possess or receive money from a bank or financial institution.
this trial is going to be GOOD theater. My comfy chair, popcorn and big drink are ready for all the fun and games Scott’s team is going to trot out.
The argument that its not a bank fraud is good and superficially correct. However, the court will not agree with this assessment. Because of the median and immediacy of the decisions that emanated from American soil.
I hope they can tie Scott somehow (through an email or something) to the OneCrap conference call where USA affiliates were told to “stop using fake Virgin Islands addresses to new recruits, for wire transfer purposes, because they had collectively exceeded the population of the Virgin Islands”!
One of the most funny things I’ve ever heard, if it wasn’t so sadly criminal. LOL.
Just catching up on this case. K.Chang is wrong. For all that wonder, bank fraud in the US requires that a FDIC insured bank is lied to or otherwise misled. No way around it.
So the argument Scott’s counsel makes is a valid one and can’t be rejected by the judge. The FDIC insured bank can be in another country, for example as a branch of a US bank.
It has now been established at trial that Scott has nothing to do with, or even knew, of the US fraud. His bank fraud charge was not confirmed by any of the several bank representatives called by the Govt to testify.
Govt may have thrown this charge against the wall to see if it sticks. Always better to have multiple charges just in case….. And now the money laundering charge in jeapordy to.
Konstantin lied and Govt may have withheld that information….. Will be interesting to say the least.
Judge Ramos may have little choice here. Too much misconduct in the SDNY and the judges are the last line of defense to ensure fair trials.
If he orders a new trial he can correct the record.
There is no mention of FDIC in the bank fraud statute in Title 18 U.S.C. § 1344. It only refers to “a financial institution”.
@Amos_N_Andy: That’s because the FDIC is mentioned in section 20, which defines specifically what the Code means by “financial institution”.
Common schoolboy error to assume that a paragraph in a statute means what you think it should mean, and not what another paragraph, or a supplementary regulation, or the precedent set by a court case, says it means.
A layman looking to confirm whether “bank fraud” in US law means fraud against any bank anywhere or specifically FDIC-insured banks reads section 1344 and goes “aha, it doesn’t mention the FDIC so it must mean any bank”.
A more pedantic layman like me Googles “Title 18 1344 FDIC” and finds Section 20. Lawyers are paid the big bucks because they already know about section 20 without needing to Google.
In any case Scott did get convicted of bank fraud in the end, so Jan Faber appears to be correct that there was enough to stick a charge of defrauding an FDIC-insured bank.
@Malthusian
Thanks for the clarification. I’m not sure the insults were necessary, but you do you.