Second Circuit Overturns Pryor Cashman Client’s Bank Fraud and Aggravated Identity Theft Convictions

by Pryor Cashman LLP
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New York Law Journal

November 15, 2012

Press Release and Media Coverage

In a major decision announced November 8, 2012, the U.S. Court of Appeals for the Second Circuit has overturned Pryor Cashman client Felix Nkansah’s convictions for federal bank fraud and aggravated identity theft.

Following an investigation by the Secret Service, Nkansah was indicted in 2008 for conspiracy to file and filing false claims with the Internal Revenue Service, bank fraud, identity theft, and aggravated identity theft. The Government alleged that Nkansah had filed tax returns under third parties' identities, deposited refund checks in federally insured banks, and later withdrawn the funds. Nkansah was convicted on all counts following a jury trial before Judge Jed S. Rakoff in the U.S. District Court for the Southern District of New York in Manhattan.

Pryor Cashman appealed on behalf of Nkansah and argued to the Second Circuit that the Government had not shown that Nkansah specifically intended to cause the banks any losses, and that insufficient evidence was presented by the Government that any of the banks had suffered any loss. The Government argued that Nkansah’s alleged false representations to the banks about his identity and his right to the refunds was sufficient to support the convictions.

Rejecting the Government’s argument, the Second Circuit in a significant and published decision by Judge Ralph K. Winter for the Court vacated the conviction for bank fraud, and with it the aggravated identity theft conviction, finding that the Government could not demonstrate proof of an intent to victimize a bank by fraud, as required by existing Second Circuit precedent. Judge Gerard E. Lynch wrote separately concurring in the judgment, noting that the decision involved a federal circuit split, and inviting the U.S. Supreme Court to resolve the issue.

“We are extremely pleased with the Court’s decision,” said Robert W. Ray, Pryor Cashman Litigation Partner and lead counsel for Felix Nkansah, “as it accepted our argument, simply stated, that one cannot be convicted of the crime of bank fraud unless a bank was actually defrauded or subjected to a risk of loss as the result of the illegal conduct. That holding means, as the Court held, that the federal bank fraud statute does not ‘encompass[ ] every fraud involving a transaction with a financial institution. Rather, it is a specific intent crime requiring proof of an intent to victimize a bank by fraud.’”

Ray and Ross M. Bagley, an associate in Pryor Cashman’s Litigation Group, represented Nkansah on appeal before the Second Circuit.

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