Legal Case Summary

We'll hear argument this morning in case 13-3-1-6, Locker in V. United States. Mr. Russell? Mr. Chief Justice, and may it please the court. This case presents the question whether to commit federal bank fraud. A defendant must intend to defraud a bank. Or whether as the 10th Circuit held, it's enough that the defendant intended to defraud someone in order to obtain money the victim keeps in a bank account. Applying the 10th Circuit's interpretation, the government has prosecuted people whose only relationship to a bank is that they tricked a third party into issuing them a perfectly valid check which the defendant then cashed at a bank. Such a broad interpretation of the federal bank fraud statute threatens to sweep in a garden variety state law crimes of a broad sweep of the sort that this court has refused to give to federal criminal statute's absent a clear statement of congressional intent. But if it's the words Congress used, obtain funds owned or controlled by financial institution, by means of false representation? Well, the problem is there is an ambiguity in this in subsection 2 about to whom the false representation must be directed. Now, I acknowledge that ordinarily you would construe that silence in favor of breath, that a false statement to anyone would do, but there are compelling reasons not to give that ambiguity, that interpretation. In this case, and one is the breadth that I mentioned. It enabled the government to bring cases like United States versus Rodriguez, where the government prosecuted a bookkeeper who filed false invoices with her employer that led the employer then to issue perfectly valid checks to people who didn't do the work. Well, when the breadth is confined, given the development of the banking system, it may not seem a significant limitation today as in years past, but nonetheless, the definition of a financial institution in 18 USC 20 is limited to institutions with a particular federal nexus, federal deposit insurance, federal home loan bank, small business investment act. It isn't any financial institution, but institutions in which the federal government has a particular interest. That's true, but nonetheless, for precisely the reason you identified, it covers an awful lot of banks. And if you read the suspect- Not in this case. And that's where I'm having difficulty. Why is it illogical to think that a falsehood rendered through a third party that might affect a bank, a false check as your client was charged with, that that would be the very case Congress would have wanted covered? So that's a question about, I think, whether intended a fraud of bank could be satisfied in a case like this. And I think that the answer to that is possibly a cut. So the government, I think, tries to put you to a false choice between saying, you either have to accept the 10th Circuit's interpretation that suites in cases like United States versus Rodriguez perfectly valid checks that don't implicate either of the core interests in a bank fraud case, which is protecting the bank from financial harm or protecting the bank from being lied to. You either have to accept that or you have to leave un-possacutable cases like this one. But that's not, well, how would that work? Would the jury have to be instructed about the UCC and be asked to determine whether the bank or target in this case would be liable for the funds if the bank had honored a forged check? So that gets, we have two theories. We have the theory that intended a fraud of bank is required. And under that theory, the UCC doesn't matter. We also argue, though, if you don't require intended a fraud of bank, why would it not matter? Because under the government, it doesn't matter under the government's view or under one view. Under your view that there has to be an intended a fraud of bank. Why would it not matter who would ultimately be liable for the money for the amount of the check? Under our view, all that government has to show is that the defendant intended to deceive a bank in order to obtain property that is owned by or in the custody of a bank. So in a bank account. So a traditional alter-check case. On anybody's theory, you have to show that the money's funds, credits, assets, securities, or other property was owned by or under the custody control of the finance. That's right. So doesn't either side have to prove that? That's correct

. So the point of departure is to whom the false statement has to be directed. But the jury has to be instructed that the money's coming out of the bank. That's correct. That's correct. And so that's to the extent you think the UCC is implicated in that inquiry that is true under either one. I don't think that it is. I think it's just going to be a question of, you know, whose money are you trying to get? And is it in a bank account? Two of the six checks involved were paid by the jury back. Isn't that so? That is correct. And so, but under our principal view that the problem here is that the government, that the jury wasn't instructed that Petitionary had to intend to fraud a bank as opposed to Target. And so it doesn't matter whether the checks were cashed or not. And it doesn't even matter under the risk of loss theory because it only has to be a risk of loss, not an actual loss. But I think you have a credible textual argument, but you run into the problem that your interpretation makes section subsection one, surplacage. How do you get around that? I don't know that we do, but the 10th Circuit's interpretation doesn't either. Because under the 10th Circuit's interpretation, one is rendered surplacage because any prosecution that could be brought under one could also be brought under two. If it's enough under two that you intended to fraud someone, surely enough that you intended to defraud a bank. Well, under the alternative, there is certainly overlap, but two reaches a much broader category, or it reaches a broader category, so it's not useless. No, that's true. And representation doesn't have to be made to the bank under two. Two covers those instances where the representation is made to somebody else. One would be limited to those perhaps in which the representation is made to the bank. But under your interpretation, where two requires that the representation be made to the bank, there is no point in having two subsections. You might as well just have one. Well, I had two things to say to that. One is Congress may have thought that what they were doing in two is making clear that the statute encompasses the broad range of particular kinds of property interests that are unique or at least common in the banking context. And in that way, it serves the same function as the second clause in the mail fraud statute upon which the statute is. It doesn't have the two subparts. But here, you are essentially asking us to read the word or one or two to mean one, including two. Well, that's the same way that this Court has repeated the red, the two parallel clauses of the bank fraud statute, the only difference being, you know, the difference in hard returns and numerals. But I don't think. Well, this Court did after or before this statute, you know, this statute was passed before the Court's interpretation of the mail fraud statute. Every Court that had looked at it at the time, the statute, which passed, had determined that there were two separate divisions. So why would Congress have any reason to believe they were passing a singular case? I think what Congress would have intended is simply that when it uses the identical material identical language and structure in two statutes that they would have the same meaning as determined by this Court, the interpretive principle that the government relies on, that identically worded statutes can mean very different things depending on the state of the circuit law. At the time, Congress copies the language is really untenable

. And it requires a criminal defendant, for example, to know what that circuit precedent was and not be able to simply rely on this Court's decisions interpreting the identical language in another statute. But it's not identical because in the bank fraud statute, Congress broke out and separately numbered one and two, and it didn't do that in the mail fraud. But I understand that, but I don't think that if Congress intended this statute to operate dramatically different from the mail fraud statute, the only change it would have made was those sort of tapographical changes. I don't think that's the way Congress conveys that kind of intent. But again, even if you think that subsection two creates an independent offense, it's susceptible of the interpretation that we give you, which avoids having to federalize the kinds of cases that are at issue in United States versus Rodriguez. One understanding of what led to this statute is this Court's decision in May's, which actually seems on all fours with this case, right? Use of a fraudulent credit card to emerge into then asks for money from the bank. Essentially, the same case as this with a fraudulent credit card as opposed to a fraudulent check. So if we understand this statute as a rising from Congress's desire to make that bank fraud, why should we rule for you here? Well, I guess I'll have to just dispute the premise. I think Congress was reacting to the rule, the principle of law, that may is adopted, which made it impossible to use the wire fraud statute, the mail fraud statute, to prosecute a case even when somebody goes into a bank and cashes a counterfeit check, because the then use of the mail settled the account afterwards wasn't good enough. And that's what Congress was concerned about. In this Court's own decision in May's, the Court noted that Congress had dealt with the specific factual problem in May's, through an amendment, re-thend recent amendment to the Truth and Lending Act, which prohibited credit card fraud, Congress added to those remedies in another section of the same statute that enacted the bank fraud statute, and had dealt with the parallel problem with respect to altered checks in Section 513, which is also part of that same statute, which was a law of the same. Which criminalizes any use of an altered check to deceive anyone without regard to whose property the defendant is intending to obtain. So when you're worried about altered check cases here, and we need to not just be worried about those cases, because this decision will implicate a whole host of other cases, but if you're thinking just about altered check cases, Congress dealt with altered check cases in Section 513. And that's important because the penalties under 513 and 31 in the bank fraud provision are very different. It's a 30-year sentence for bank fraud and a 10-year sentence for Section 513. And more importantly, the bank fraud statute is a predicate for aggravated identity theft, which imposes a mandatory two-year minimum sentence that must be served consecutive to any other sentence. And so in a petty case like this, the difference between somebody being charged for the bank fraud being charged under 513, for a first-time defender can be the difference between 0 to 6 months and 2 to 2 and a half years. And that gives the government enormous plea bargaining leverage. So you can understand what the government wants a broad interpretation here. But it's also equally understandable that Congress would have thought that cases in which somebody's using an altered check in a way that negligently or knowingly poses some risk to a bank is warrants less punishment than when somebody directly targets the bank itself for deception in order to obtain bank property. Why would Congress have wanted to make that difference? Well, because I think Congress would have- I agree with you that the disparity in punishment is quite substantial. Yeah, I think that Congress would have thought it's more serious for somebody to target a bank than it is for somebody to use an altered check that has a risk to a bank. Because as this case illustrates, using an altered check doesn't necessarily impose a financial cost on the bank. Here, target intercepted. We have a disagreement with the government whether it was three or four of the checks. And the bank itself may discover the alteration and refuse to honor the check. But when you are intending to defraud the bank, that's a- the Congress could think that's a much more serious thing. And I do think that, you know, it does seem to be that this case can be distinguished from the example you gave in your yellow brief of the person that sells a magazine subscription and he gets the check. And he never intends to deliver the magazines. In that case, the bank will honor the check, I assume, and must do so. That's correct. And that's quite different than this case. So the question is how to get rid of those cases while preserving the government's ability to- Well, you can do so, I suppose, through the government's proposed fallback position at page 40 of its brief, which talks about a risk of loss

. So there are several things wrong with the government's fallback position. And it leads, in most cases, to the same result as intended to fraud. So in parodigmatic bank fraud cases, both our rule and their fallback rule permits prosecution. The only real difference is that their rule is designed to permit prosecution and third party check fraud cases like ours. Because if it's an altered check that's presented to the bank, we acknowledge that shows intended to fraud the bank. So we're only talking about cases like ours where an altered check is presented to a third party. And the government's rule permits them to continue to prosecute those cases. Now, even if you agree with them that those kinds of cases fall within the scope of the statute, that all you need to do then is to say, look, those cases aren't materially different than when you submit the check to the bank in the first place. That the altered check shows intended to fraud the bank in third party cases, just like it does, in a first party case. Now, we think that they're wrong about whether or not these kinds of cases are covered. And if we're right about that, then there's obviously no reason to adopt a rule that they made up just to deal with those kinds of cases. And maybe I could turn to that argument just for a second. Could I ask you this question? Suppose the defendant testifies and suppose the jury believes the defendant. The defendant testifies as follows. I never intended to defraud the bank. I knew that the cashiers at this particular retail establishment were incredibly careful, a careless. And so I got these checks and they were made out to my neighbor, John Doe, I stole them from his mailbox. I crossed out his name. I wrote in the name of the retail establishment. And I knew these cashiers were so careless that they would honor the check. However, I never thought any bank would do that. So I didn't intend to defraud the bank. I intended to defraud the retail establishment. Now under your theory that if the jury believed that the person would not be guilty of the offense. That's right. And I don't think that those cases are covered for an additional reason as well. And that is the fraud there is not intended to obtain bank property. Under subsection two, it's not any fraud that implicates bank property. The object of the fraud must be to obtain a property that is owned by or in the custody or control of the bank. And in a case like this, what my client obtained was DVD players, groceries, and a printer. And those were not property owned by or in the custody or control of the bank. Well, why isn't that principle cover motion of the cases you're worried about? Well, it doesn't cover the cases like Rodriguez. Because the government can argue there that, so I don't know if I finished the description of Rodriguez

. But in that case, a bookkeeper submitted false invoices to her employer. The employer issued valid checks to a third party who then cashed it. And the government can say in a case like that, caching the check results in you obtaining money in the custody or control of the bank. That's what you get in exchange for the check. And you obtained it by means of a false statement to someone, i.e., the false invoice submitted to the employer. And so it doesn't adopt in our view of what bank property is. It doesn't completely eliminate the problem. We would win the case. But why wouldn't your view have enabled you to win this case? It should have. I mean, we brought a sufficiency of the evidence challenge with respect to whether whose property this is. And the jury, you know, so if you think that was wrong, there's a lot less to this case than meets the eye. There is a, that could be the end of this case. That it doesn't resolve the circuit conflict, which there's still a circuit conflict about whether intended to fraud a bank is required in cases not involved in this circumstance of a third party. But we do think that you shouldn't believe that just because if you agree with the government that third party altered check cases fall within the scope of the statute, that's not a reason to forego requiring the government to prove intended to fraud the bank. It's just a reason to say that as a number of circuits have that use of that author checks shows intent to defraud a bank. The government has been able to prosecute altered check cases, including altered third party check altered check cases to third parties in circuits that require intent to defraud the bank. The other thing that's wrong. The one theory behind that why would presenting an altered check to a third party constitutes sufficient evidence of intent to defraud a bank? Well, I think that the theory is that the use of an altered check shows intent to deceive the bank. And then these courts simply view obtaining the property of a third party using that check as materially identical to obtaining that property directly from a bank, I think is the theory. Usually there won't be evidence direct evidence of the defendant's intent. So the defendant's intent will be inferred from objective evidence. It will be inferred from other evidence. And then you will get into the question of whether the retailer who initially accepts the check or the bank is ultimately going to be liable for the amount of that check. If you're in a situation in which the retailer is going to be liable, maybe that supports the inference that the defendant never intended to defraud the bank. If you're in the situation where the bank is going to be liable, it supports the inference that the defendant intended to defraud the bank. So won't you get into this somewhat complicated UCC question about who is ultimately going to be liable for the amount? I think that's a problem with what you're arguing, but maybe there's an answer to it. Well, I think that there is, and maybe I'm not explaining it very well. So there's two pieces of intent to defraud the bank. There's intent to deceive the bank and intent thereby to obtain the bank property. With respect to intent to deceive the bank, I think the courts have uniformly found in at least first party cases that use of an altered check is sufficient evidence to show that you intend to deceive the bank. And whether you intend to deceive the bank is it doesn't matter who's going to end up bearing the cost at the end

. It's just a question. Doesn't that UCC question arise anyway under the requirement that you have to obtain bank property? It potentially does. It says that the bill inquiry you just ultimately decide who's going to be stuck with the empty bank. It potentially could, if you're willing to say that somebody who obtains property from target potentially is obtaining bank property because of reasons related to the UCC. We don't think you even need to go that far. We think it's sufficient to say that in these third party cases what you're obtaining is the property of somebody else. And that doesn't mean that it's not a crime. And it doesn't even mean that it's not a federal crime. It simply means it's a Section 513 crime. I understand that. But if you accept the government's view of how these third party cases ought to be resolved, you have to get into the UCC, don't you? I don't know. I mean, maybe they can better people to answer that question for you. But I think that at least to finish the answer is Justice Alito. Use the other check which says when you've written your name on the check rather than the person who altered it is an attempt to deceive a bank. We don't disagree with that. And so then the question in these third party cases is are you attempting to obtain property of the bank? And we don't think that the UCC comes into that. It's just a simple common sense thing that a DVD player on target shelves is not property owned by or in the custody or control of a bank. How does it work if you have Mr. Crook? Mr. Crook has a bank account in the Bank of America. He has $32 in it. He writes a check for $5,000. He sees somebody on the street whom he vaguely knows and says here, take my check. Go to the bank. Give me $200 or give me a thousand. Now he's got the money from Mr. Smith. He didn't obtain money from the bank. He was Mr. Smith who did or did not go into the bank at the money. Does that fall within the statute? No. I mean, well, that is a typical bad truck case. This doesn't fall within the statute at all

. Well, in fact, in other words, we got some cases on that. You don't have this question. I mean, you know, this is not good. But I mean, you know, what you tried to tell me. You didn't get the money from the bank. What you did was just write a false check. Knowing that in all likelihood the guy you give the check to is going to get the money and you go right to the bank and get the money. That's one. There is some authority as to whether that falls within these statues. So the government has brought those kinds of not sufficient funds cases. Ordinarily, it goes down somewhat differently as that you've presented the check that you know is going to bounce to a merchant, not to some guy in the street. And the government's theory is that they're by your obtaining bank property. But most of the cases say that that's not actually bank fraud because you're not intended to see a bank. And that's really fine. I don't think you have to, when you say in ten, in ten can encompass a known but undesired or a consequence of an intentional act. And so you may not care. You couldn't care less when the money comes in the bank or not. But you know that the bank is likely to pay it. But so therefore you have the requisite intent. But what I'm trying to figure out here is what's the case law on what should be a very common situation. If you give it to a third party, your fake check, insufficient funds, you just want the money from the third party. But you know the bank is likely to honor it. Well, if I can cripple with that last piece of this sentence. Ordinarily, if you get a check that goes to a bank and there's not sufficient funds, they bounce to the check. They don't honor it. All right, so try to certainly have been my experience. But try two different paths here. Path A, he believes that the bank will honor Smith, his check, when presented by Jones. I know, I got my names mixed up. Mr. Crook believes that the bank will honor his check when Mr. Smith presents it. And the second is the one Justice Scalia said is being sophisticated about these matters

. Mr. Crook believes that the bank will never own, never, never pay the check when presented by Smith. I just want to know the state of the law on those two situations. So the state of the law, and there's only a handful of these not sufficient fund cases, is that most of the circuits I've said they do not fall within the statute. The ones that have said that they do, it's usually because the defendant has told some additional law to the bank. They've opened the account under a false name, for example. And so that's the state of the law. This Court in the United States versus Williams, though, said we should go to great lengths. What is the thinking of those courts? What's that? What's the thinking of those courts? What's the rationale? So the rationale is that in a case where you submit, I guess I have two. Some of them are applying the risk of loss test and say that there's not a sufficient risk of loss. I believe some of them are saying that there's no intended to fraud the bank there because the target of the law. And the courts that don't hold this way but hold as the court did below that it's an intent to deceive anyone so long as the scheme is a. Yes, I don't know that this case has come up in those circuits, but I think the answer is quite clear that those circuits would say they're covered. But in the United States versus Williams, this Court said we should go to great lengths to avoid interpreting a federal criminal statute to criminalize federally every insufficient funds check case. But we go back to those general statements. You do have the language of the statute's favorites you this question. But I guess the theory would simply be where Mr. Croc gives him a bad check to Mr. Smith. He couldn't care less whether Smith presents it to the bank. And he, as far as he's fairly sophisticated, things probably Smith won't present it to the bank. He may have insurance company or something. And therefore he did not either obtain or try to obtain or believe he would obtain money from the bank. That's right. Whether it's money that the bank itself owns or whether it's money of which the bank has custody. That would seem to be the simplest theory. And I think that's going to do is that what courts have said. I think what courts have said is that those kinds of schemes are directed at victimizing the third party not a bank and that leaves to the states their traditional authority to prosecute bad check cases, which I don't think should be troublesome. I'm sorry. Thank you, Council. Mr. Yang. Mr

. Chief Justice, I may it please the Court. Congress drafted section 1344 with two separate clauses, each of which serves a distinct function. The first clause target schemes to defraud a bank that requires intent that the scheme have the purpose of defrauding a bank. It's clause two and this is at page 5a of the government speech you can see the structural difference quite clean. Clause 2, target schemes to obtain property that's either owned by or under the custody or control of a bank. And Congress enacted these broad, disjunctive clauses in response to this Court's decision in Mays as well as in Williams, which had curtailed the government's ability to prosecute precisely these types of fraud. The Mr. Yang, your interpretation of the statute goes far beyond Mays. Mays was something with a fraudulent credit card or a forged check or something like that. But if I understand your interpretation of the statute, you know, if I sell a painting to somebody and I represent it to be by a famous artist, and in fact I've just made it in my kitchen, and that person pays me with a check. And it's a perfectly valid check. It's a good check. The fraud is obviously as to the person who's just bought the painting. It has nothing to do with the bank, but your interpretation would cover that case as well. That is correct. Our understanding of the text and the reason why that is the case is because Congress specified in clause two that the scheme to obtain money or property from the bank has to be by means of a false or fraudulent pretence, but it doesn't specify to whom that false or fraudulent pretence must be made. Now, we understand that that squeaks in broader than what made. And it's just a little bit peculiar, right? I mean, if somebody pays me in cash, the government can't prosecute the person. If somebody pulls out a check, the government can. That doesn't seem to make a whole lot of sense in terms of what this statute is about. Well, we think that the text suggests that what Congress was doing was enacting a broad profile act. Because what Congress was addressing, remember, where situations where this court had construed narrowly statutes which addressed situations like this were banks where the inherent second-line victims. And so the clear and clear to avoid. The point is not the victim. That's the whole point in these kind-artist cases. No, I think it's incidental. That's exactly right. That's why the Congress was not intending specifically to get those, but enacted a broader statute. So we wouldn't have debates about this. Look at the debate that we're having in this case. I think everyone can agree that the banks are just like the banks in May. There's second-line victims. There is an order to the bank

. It's a check. A check is simply an order to the bank to pay a specific amount of money. You see, I'm talking about that. Well, I'm just as a keg and hypothetical. The bank didn't have to refund the money. And if we could sit around here all day with examples. But suppose you have a contractor on a cost plus fixed fee and he inflates the cost. This would be to the owner. This would be a violation of the statute. This is a sweeping interpretation you're offering. We think that that is the interpretation reflected in the text for the following reason. Although it doesn't follow within the core of what Congress was trying to protect, it avoids the problems. The kind of debate we're having here about situations that do fall within the core. Because remember what we're now talking about petitioners as well. You know, it wasn't sufficiently targeted. You didn't really victimize or harm the bank. Congress is trying to get away from that type of inquiry. And they said, look, if the scheme has the intent of obtaining property either owned by or in the custody that are controlled by the bank. So that means it can either be controlled by the bank, its own property or custody or property that's holding it. Or it's in the custody or control of others, but it's owned by the bank. It's a very broad coverage. And you use, you try to obtain that property by means of false or fraudulent pretenses. We avoid this kind of discussion about where you sufficiently targeting, do you really intend to do it? But you extend Federal law enormously into the kind of stuff that we've usually left to the States. I'm not sure that that's actually true. It's a very strange Federalism argument that petitioner is making. It's just your saying, my conduct is federally a federal crime. It's a federal crime under this. It could be a federal crime under that. It's just not a federal crime under the bank fraud statute. That is a very strange Federalism argument because Congress has already put its hands all over the subject. And what Congress is trying to do here was to respond to cases like Mays by enacting a broad statute. Congress would have it right. I just want to be sure, in my crook case, which you may or may not remember

. You're reading the word obtained to mean whoever knowingly execute the scheme or artifice to obtain. It doesn't mean for him to obtain. It means for anybody to obtain. That's how you read it. That's correct. And that has been pretty much the universal understanding of obtained. It's just uniform, understandable, but different areas, both to this court case. It's fine, then, is the way you see the statute. That's right. That Mr. Crook goes to Mr. Smith and says, dear Mr. Smith, here is my check for $50,000. Knowing he only has $3 in his account. All right. Now, case one is Mr. Smith, not too bright, gives him $500. Now, he might, Mr. Crook, think that Smith will then go and present the check to the bank and maybe get some money. In that case, he has violated this in your view because Mr. Smith obtained money from the bank, and that was part of Mr. Crook's idea as what was likely to happen, whether he'd wanted it to or not. Partially correct. All right. There's also the Justice Scalia's point, which is a port important, and that it to me. And that is that there also is the case when Mr. Crook doesn't know how the banking system works at all, and he has no idea that the bank will, in fact, give any money or whether it will give any money. Those are the two cases. I have at least two responses. The first is. It doesn't need a response. All I want is explanation. Well, the two explanations. Give an explanation rather than the new explanation. I will give an explanation that will be connected to the question. The explanation is, I think, twofold. First, as the Court explained in Nader, the gravimment of this statute, just like the gravimment of the male fraud or the wire fraud, is not the particular acts, or that the particular acts are done well or have any likelihood of success, it is the scheme. And so therefore, questions about reliance. The bank doesn't have to believe it or rely on it. Damages that result don't have to rely. This is a scheme. It is criminalizing the scheme to obtain that effect. So what do you do with the case? The second part of the hypothetical, the Justice Breyer, didn't repeat. Where the person knows the bank is not going to pay a cent, because there is no money in this account. I think that- And so there is no part of the scheme to obtain funds from the bank, because they know that the bank won't pay it. Well, they may, they may suspect that the bank may not pay it. Banks sometimes, in fact, do pay checks on insufficient funds. Banks have only 24 hours after receipt of a check to dishonor it or not. And if they don't, then they are stuck in the UCC and have to bring lawsuits. I mean, the practical impact of this type of situation is significant, about a billion dollars a year. And so what's the answer to Justice Sotomayor's question? Well, it depends on- This undercruque is not too bright, and Mr. Crook doesn't even know what a bank is. And all he knows is he can get $500 from this other not-genius Mr. Smith. And so he does not care about banks. He doesn't know how they work. He has no idea if they pay or don't pay. What's the result? I think it would be very hard for the government to prove that your inept bank, Thet Thief, had a scheme to obtain money or property from the bank. But the government might be able to prove it circumstantially, because, just as Justice Alito explained, you rarely have insight into the heart of hearts of criminals. You need to have circumstantial evidence. What Federal Statute criminalizes a con game? Criminalizes what? I do not know. I do not know what Federal Statute criminalizes. What Federal Statute criminalizes altering checks? But what other Federal Statute makes it a federal crime to engage in a con game? Well, without a check. Well, I'll never be able to check what you mean by a con game. But there are a few federal disputes that are going to date your house and takes a check for $100 and doesn't paint the house. Well, the answer is that Congress has addressed false statements, schemes to defraud, schemes to obtain money or property through all kinds of various statutes, mail fraud, wire fraud, false statements, bank fraud

. Give an explanation rather than the new explanation. I will give an explanation that will be connected to the question. The explanation is, I think, twofold. First, as the Court explained in Nader, the gravimment of this statute, just like the gravimment of the male fraud or the wire fraud, is not the particular acts, or that the particular acts are done well or have any likelihood of success, it is the scheme. And so therefore, questions about reliance. The bank doesn't have to believe it or rely on it. Damages that result don't have to rely. This is a scheme. It is criminalizing the scheme to obtain that effect. So what do you do with the case? The second part of the hypothetical, the Justice Breyer, didn't repeat. Where the person knows the bank is not going to pay a cent, because there is no money in this account. I think that- And so there is no part of the scheme to obtain funds from the bank, because they know that the bank won't pay it. Well, they may, they may suspect that the bank may not pay it. Banks sometimes, in fact, do pay checks on insufficient funds. Banks have only 24 hours after receipt of a check to dishonor it or not. And if they don't, then they are stuck in the UCC and have to bring lawsuits. I mean, the practical impact of this type of situation is significant, about a billion dollars a year. And so what's the answer to Justice Sotomayor's question? Well, it depends on- This undercruque is not too bright, and Mr. Crook doesn't even know what a bank is. And all he knows is he can get $500 from this other not-genius Mr. Smith. And so he does not care about banks. He doesn't know how they work. He has no idea if they pay or don't pay. What's the result? I think it would be very hard for the government to prove that your inept bank, Thet Thief, had a scheme to obtain money or property from the bank. But the government might be able to prove it circumstantially, because, just as Justice Alito explained, you rarely have insight into the heart of hearts of criminals. You need to have circumstantial evidence. What Federal Statute criminalizes a con game? Criminalizes what? I do not know. I do not know what Federal Statute criminalizes. What Federal Statute criminalizes altering checks? But what other Federal Statute makes it a federal crime to engage in a con game? Well, without a check. Well, I'll never be able to check what you mean by a con game. But there are a few federal disputes that are going to date your house and takes a check for $100 and doesn't paint the house. Well, the answer is that Congress has addressed false statements, schemes to defraud, schemes to obtain money or property through all kinds of various statutes, mail fraud, wire fraud, false statements, bank fraud. It just has done so in particular areas where there is a federal interest implicated. And actually, those areas are quite sweeping. And I mean, bank fraud and that would be one of them if you accept a check. Right? If you promise to paint the house, you'll have no intention of doing it. So it's fraud and you accept a check. That's it. You're under this statue, right? The government would have to prove that the scheme was intended to obtain money or property from a bank if that was shown. And what does that mean, Mr. Yang? I mean, you could mean that the defendant intends that the money come from the bank, or you could mean that the defendant intends to obtain money, which he knows may or is reasonably likely to or is foreseeable to come from the bank. Which do you mean? I think we kind of mean both. And let me explain why. As Justice Alito, I think it's kind of alluded to, as a practical matter of the way you prove these cases, is you prove that a defendant generally intends the natural consequences of his or her acts. And so if, for instance, you have a case like this where you have a fraudulent check, which is directed to a bank, it says, bank, pay the payee, this summer money, that the defendant is going to intend when they tender that to the merchant, that that check is going to be sent to the bank, and that the bank is going to, you know, has a reasonable chance of- Well, I think this does go back to Justice Alito's question, because the person can say the defendant here could have said, I really don't care whether the bank ends up paying target. I don't know whether the bank will end up paying target. I don't know how these things work and how often the bank honors it and how often the bank doesn't honor it. And I really could not care less as long as I get my money from target. Right. But in our legal system, I don't think it's something. Let me give you another example. Let's say you want to kill somebody and you put a car, bomb in their car, right? And there are two people in the car who see the target going, you see someone else going, and you detonate the bomb. You can't say, what was really indifferent about the second person- No, but- So you're saying that my person, forget the other examples. I mean, you're saying that this person who could not care less if the money comes from the bank, and actually thinks that the money may not come from the bank, because it's quite likely that the bank's not going to honor this. You think nonetheless that that person has intended to obtain bank property. Yes, by the virtue of the scheme. Wait, I thought you said earlier, and I was going to ask you about that, that he does not have to personally receive bank property. Right. He just intends that bank property be given to somebody- To be transferred in his direction. Yes. Yes. That's exactly right. And slipping back into the hypotheticals where the bank is going to bear the loss. But your position also covers instances where the bank does not bear any loss. The fraudulent contractor, the Justice K

. It just has done so in particular areas where there is a federal interest implicated. And actually, those areas are quite sweeping. And I mean, bank fraud and that would be one of them if you accept a check. Right? If you promise to paint the house, you'll have no intention of doing it. So it's fraud and you accept a check. That's it. You're under this statue, right? The government would have to prove that the scheme was intended to obtain money or property from a bank if that was shown. And what does that mean, Mr. Yang? I mean, you could mean that the defendant intends that the money come from the bank, or you could mean that the defendant intends to obtain money, which he knows may or is reasonably likely to or is foreseeable to come from the bank. Which do you mean? I think we kind of mean both. And let me explain why. As Justice Alito, I think it's kind of alluded to, as a practical matter of the way you prove these cases, is you prove that a defendant generally intends the natural consequences of his or her acts. And so if, for instance, you have a case like this where you have a fraudulent check, which is directed to a bank, it says, bank, pay the payee, this summer money, that the defendant is going to intend when they tender that to the merchant, that that check is going to be sent to the bank, and that the bank is going to, you know, has a reasonable chance of- Well, I think this does go back to Justice Alito's question, because the person can say the defendant here could have said, I really don't care whether the bank ends up paying target. I don't know whether the bank will end up paying target. I don't know how these things work and how often the bank honors it and how often the bank doesn't honor it. And I really could not care less as long as I get my money from target. Right. But in our legal system, I don't think it's something. Let me give you another example. Let's say you want to kill somebody and you put a car, bomb in their car, right? And there are two people in the car who see the target going, you see someone else going, and you detonate the bomb. You can't say, what was really indifferent about the second person- No, but- So you're saying that my person, forget the other examples. I mean, you're saying that this person who could not care less if the money comes from the bank, and actually thinks that the money may not come from the bank, because it's quite likely that the bank's not going to honor this. You think nonetheless that that person has intended to obtain bank property. Yes, by the virtue of the scheme. Wait, I thought you said earlier, and I was going to ask you about that, that he does not have to personally receive bank property. Right. He just intends that bank property be given to somebody- To be transferred in his direction. Yes. Yes. That's exactly right. And slipping back into the hypotheticals where the bank is going to bear the loss. But your position also covers instances where the bank does not bear any loss. The fraudulent contractor, the Justice K. Gooden's hypothetical about the phony painting. The bank is not going to give that money back in money. And for good reason, for multiple reasons, one, this is prohibiting the scheme, not a good scheme, not a completed scheme, not an effective scheme. So you had federalized every fraudulent transaction in the economy whenever a check is involved? Not whenever a check is involved, the government would still have to show that the scheme is else was intended to obtain money or property from the bank and did so by- Well, I mean, I can think about it tonight, but I'd like an example of a check where the money doesn't come from the bank. Well, in the check context, I think there is not. I mean, what you have, if you're obtaining that check in order to get the money from or property from the bank, I think it would fall within. And again, we understand this is a broad reading. Could I add with that? I'll not put that back. Could I just make sure I understand your answer to my question. Suppose that this defendant did not return the merchandise for cash. In other words, suppose he just wanted an Xbox and he did the exact same thing. So he never himself wanted cash. And again, could not have cared at all whether the bank was going to give the vendor cash. Still, you would say that person intended to obtain bank property. By virtue of his scheme, remember, he's not just walking in saying, you know, I'll pay you tomorrow if you give me a hamburger today. He's going in with the check. A check is everyone knows what a check is. It is in order to a bank to pay money. He's giving it to the bank. But he's not obtaining the bank's money. You read to obtain a scheme or an office to obtain. You read that for anybody to obtain. I would read it to me for him to obtain. But that's not how you read it. And you say that's everybody reads it the way you do. This court is long recognized that the word obtain not only means that you obtain it from the bank, but you can obtain something by directing the transfer of property to someone else. And that's exactly what a check does. Mr. Yang, before you finish, Mr. Russell pointed out, and I think, just a so to my own, that there is section 513, it deals with, expressly, with altered checks. But the penalty is much, much less. Yes. Is everything that is covered by 513, covered by 1342? Well, I think the answer is that has not been decided

. Gooden's hypothetical about the phony painting. The bank is not going to give that money back in money. And for good reason, for multiple reasons, one, this is prohibiting the scheme, not a good scheme, not a completed scheme, not an effective scheme. So you had federalized every fraudulent transaction in the economy whenever a check is involved? Not whenever a check is involved, the government would still have to show that the scheme is else was intended to obtain money or property from the bank and did so by- Well, I mean, I can think about it tonight, but I'd like an example of a check where the money doesn't come from the bank. Well, in the check context, I think there is not. I mean, what you have, if you're obtaining that check in order to get the money from or property from the bank, I think it would fall within. And again, we understand this is a broad reading. Could I add with that? I'll not put that back. Could I just make sure I understand your answer to my question. Suppose that this defendant did not return the merchandise for cash. In other words, suppose he just wanted an Xbox and he did the exact same thing. So he never himself wanted cash. And again, could not have cared at all whether the bank was going to give the vendor cash. Still, you would say that person intended to obtain bank property. By virtue of his scheme, remember, he's not just walking in saying, you know, I'll pay you tomorrow if you give me a hamburger today. He's going in with the check. A check is everyone knows what a check is. It is in order to a bank to pay money. He's giving it to the bank. But he's not obtaining the bank's money. You read to obtain a scheme or an office to obtain. You read that for anybody to obtain. I would read it to me for him to obtain. But that's not how you read it. And you say that's everybody reads it the way you do. This court is long recognized that the word obtain not only means that you obtain it from the bank, but you can obtain something by directing the transfer of property to someone else. And that's exactly what a check does. Mr. Yang, before you finish, Mr. Russell pointed out, and I think, just a so to my own, that there is section 513, it deals with, expressly, with altered checks. But the penalty is much, much less. Yes. Is everything that is covered by 513, covered by 1342? Well, I think the answer is that has not been decided. And let me just explain in a few ways. One section 513 deals with securities, which includes checks of states or organizations. And then it defines organizations. There is a substantial question whether that applies to personal checks. One Court of Appeals has said it has. The Department of Justice's criminal resource manual says it does not apply to personal checks. So there is a real question about whether this section 513 would apply. But even if it were to apply, it applies to protect the integrity of certain writings. It is a different provision than a scheme based provision like Section 1344, which more broadly prohibits types of schemes to obtain money or property from banks. And is it true that there is a two-year mandatory minimum? Not for a bank fraud. There is aggravating identity theft for a return. And under this statute is there a mandatory minimum? No. The bank fraud statute has a punishment of up to 30 years to reflect that frauds come in various sizes. It is not a mandatory minimum. It is just a maximum. And in this case, the defendant actually got one year for this bank fraud. He got a stacked sentence of two years for a identity theft, which is separate from this provision. And- Mr. Yang, if we are concerned about federalizing every case involving a check, okay, your brief does give us an alternative. Yes. My problem is I can't locate that alternative in the language of the statute. Well, I think so. Are you asking us just to make it up or if not, how do we reach it? We're not asking you actually to make that interpretation. It would be if the court concludes that our first interpretation is somehow problematic. And we think that that is a superior reading than petitioners for the following reason. Congress- No, no, no, please answer. How do we get your review from the text of the statute? I will. The way you get there is that Congress and clause two, again, remember, specifies you have to have intent to obtain money or property from a bank by means of false or fraudulent pretenses, representations or promises. It does leave silent to whom those false or fraudulent representations must be made. Now, if you look at the legislative history, it's very clear that Congress was at least concerned with situations like Mays where a bank would be a victim of a fraud. And those in Mays involved a situation precisely like what we have here, where the reason that the bank is a secondary victim is because that false signature, the false charge slip- So sorry, I'm with you, but you haven't answered my question. But the way it is in that context, the reason that the bank is the victim of the scheme is because the fraudulent method is actually transferred to the bank as an inherent part of the scheme itself. So I agree that that interpretation substantially narrows the statute because as the altered checks the bank is going to be at risk of loss

. And let me just explain in a few ways. One section 513 deals with securities, which includes checks of states or organizations. And then it defines organizations. There is a substantial question whether that applies to personal checks. One Court of Appeals has said it has. The Department of Justice's criminal resource manual says it does not apply to personal checks. So there is a real question about whether this section 513 would apply. But even if it were to apply, it applies to protect the integrity of certain writings. It is a different provision than a scheme based provision like Section 1344, which more broadly prohibits types of schemes to obtain money or property from banks. And is it true that there is a two-year mandatory minimum? Not for a bank fraud. There is aggravating identity theft for a return. And under this statute is there a mandatory minimum? No. The bank fraud statute has a punishment of up to 30 years to reflect that frauds come in various sizes. It is not a mandatory minimum. It is just a maximum. And in this case, the defendant actually got one year for this bank fraud. He got a stacked sentence of two years for a identity theft, which is separate from this provision. And- Mr. Yang, if we are concerned about federalizing every case involving a check, okay, your brief does give us an alternative. Yes. My problem is I can't locate that alternative in the language of the statute. Well, I think so. Are you asking us just to make it up or if not, how do we reach it? We're not asking you actually to make that interpretation. It would be if the court concludes that our first interpretation is somehow problematic. And we think that that is a superior reading than petitioners for the following reason. Congress- No, no, no, please answer. How do we get your review from the text of the statute? I will. The way you get there is that Congress and clause two, again, remember, specifies you have to have intent to obtain money or property from a bank by means of false or fraudulent pretenses, representations or promises. It does leave silent to whom those false or fraudulent representations must be made. Now, if you look at the legislative history, it's very clear that Congress was at least concerned with situations like Mays where a bank would be a victim of a fraud. And those in Mays involved a situation precisely like what we have here, where the reason that the bank is a secondary victim is because that false signature, the false charge slip- So sorry, I'm with you, but you haven't answered my question. But the way it is in that context, the reason that the bank is the victim of the scheme is because the fraudulent method is actually transferred to the bank as an inherent part of the scheme itself. So I agree that that interpretation substantially narrows the statute because as the altered checks the bank is going to be at risk of loss. If we were to agree with that suggestion and we're inclined to read the statute that way, is there a case that you can cite to us that says we have a duty to save poorly drawn statutes by a sensible amendment? No. I don't think we would case you on what case you want me to cite if I adopt your alternate, your fallback position. I don't think we are relying on the idea that the courtiers would be doing is construing the statute in light of presumably some good reason to reject what we think is what the statute normally said. Why don't you try the rule of liberty? Why don't you try the rule of liberty? We think that the rule of liberty doesn't apply for the reasons that we set on a broader argument. If the court rejects that, that might be a reason. But again, it's construing the term means. The rule of liberty provide a precedent for us to adopt the narrowing interpretation, your fallback position. I think just in any context where you might have constitutional doubt, the court sometimes, as you know, can extrude the statute in a way that it might not otherwise do. And here what we are giving you an look for this is that the means specified leaves open to whom that false or fraudulent communication must be directed. You could read in light of the history and in light of what Congress's main intent was here to read the statute as saying, ah, Congress actually in clause two was concerned with the specific type of means that is the means that are directed to the back. And the reason I think this is far superior than what Petitioner suggests is because we are at least construing silence in the statute. Congress specifically addressed intent already in clause one that is intended to fraud a bank, which is what Petitioner says clause two does. But clause two says there's intent to obtain money or property from the bank. There's no reason to run over Congress's choice about what types of schemes have to be intended in order to achieve this result. So again, this is our fallback position. If we adopt your fallback position, does two do anything that one doesn't do? I mean, if you've made your false or fraudulent representations to the bank, you surely you intend to fraud the both. So clause is actually under our fallback or our main position cover things that the others will not. And I'll give you two examples. On clause one, clause one covers what's called bear check-kiting. Where you write a check, it has insufficient funds, you withdraw the money, then you write another check to cover it and another check and you play the float. Nine courts of appeals have addressed this question. All of them have concluded that it falls under clause one. Six of them have concluded it doesn't fall under clause two. And the additional three courts of appeals that have criminal jurisdiction in either unpublished or in dictum have suggested agreement. So it's pretty well established check-kiting falls under one, not two. On with respect to two, it covers schemes like this where you can argue maybe you didn't intend to defraud the bank itself. But you used false or fraudulent means that would be inherently go to the bank because of the nature of the means themselves. Here, where you direct a check, it's a financial instrument, it is ordering a bank to pay money. It goes to the bank and when normally intends the natural consequences of their act, it goes to the bank in the ordinary course. Which part of the statute are you interpreting with this limiting principle, the obtained part? The by means of. The by means of the false or fraudulent pretenses and its understanding those false or fraudulent pretenses to be ones which are directed to the bank as an inherent consequence of the scheme itself. Mr. Yang, your first order argument, which is, you know, the natural way one would read a statute that says one or two is to interpret it as meaning two different things

. If we were to agree with that suggestion and we're inclined to read the statute that way, is there a case that you can cite to us that says we have a duty to save poorly drawn statutes by a sensible amendment? No. I don't think we would case you on what case you want me to cite if I adopt your alternate, your fallback position. I don't think we are relying on the idea that the courtiers would be doing is construing the statute in light of presumably some good reason to reject what we think is what the statute normally said. Why don't you try the rule of liberty? Why don't you try the rule of liberty? We think that the rule of liberty doesn't apply for the reasons that we set on a broader argument. If the court rejects that, that might be a reason. But again, it's construing the term means. The rule of liberty provide a precedent for us to adopt the narrowing interpretation, your fallback position. I think just in any context where you might have constitutional doubt, the court sometimes, as you know, can extrude the statute in a way that it might not otherwise do. And here what we are giving you an look for this is that the means specified leaves open to whom that false or fraudulent communication must be directed. You could read in light of the history and in light of what Congress's main intent was here to read the statute as saying, ah, Congress actually in clause two was concerned with the specific type of means that is the means that are directed to the back. And the reason I think this is far superior than what Petitioner suggests is because we are at least construing silence in the statute. Congress specifically addressed intent already in clause one that is intended to fraud a bank, which is what Petitioner says clause two does. But clause two says there's intent to obtain money or property from the bank. There's no reason to run over Congress's choice about what types of schemes have to be intended in order to achieve this result. So again, this is our fallback position. If we adopt your fallback position, does two do anything that one doesn't do? I mean, if you've made your false or fraudulent representations to the bank, you surely you intend to fraud the both. So clause is actually under our fallback or our main position cover things that the others will not. And I'll give you two examples. On clause one, clause one covers what's called bear check-kiting. Where you write a check, it has insufficient funds, you withdraw the money, then you write another check to cover it and another check and you play the float. Nine courts of appeals have addressed this question. All of them have concluded that it falls under clause one. Six of them have concluded it doesn't fall under clause two. And the additional three courts of appeals that have criminal jurisdiction in either unpublished or in dictum have suggested agreement. So it's pretty well established check-kiting falls under one, not two. On with respect to two, it covers schemes like this where you can argue maybe you didn't intend to defraud the bank itself. But you used false or fraudulent means that would be inherently go to the bank because of the nature of the means themselves. Here, where you direct a check, it's a financial instrument, it is ordering a bank to pay money. It goes to the bank and when normally intends the natural consequences of their act, it goes to the bank in the ordinary course. Which part of the statute are you interpreting with this limiting principle, the obtained part? The by means of. The by means of the false or fraudulent pretenses and its understanding those false or fraudulent pretenses to be ones which are directed to the bank as an inherent consequence of the scheme itself. Mr. Yang, your first order argument, which is, you know, the natural way one would read a statute that says one or two is to interpret it as meaning two different things. But that requires us to read it differently from the way we read the exact same words without the numbers, but the exact same words in McNally. And we know that Congress wanted the bank fraud statute to mirror the mail and wire fraud statute. So we end up with this, you know, if we go with your friend over there, we read a statute in a way we wouldn't normally, but if we go with you, we have to read these two statutes that say the same thing and that we know Congress meant to say the same thing differently. Right. And I think that there are very sound reasons for doing that, and I'll explain why. First, when you look at the statute, Section 1344, this is on page 5A, and the mail fraud statute is on 1341 and 2A, they're quite different. I mean, even when we just look at the statutory structure alone, Congress broke these clauses up, put them on different lines, numbered them, indented them equally, one would not naturally say, you have the option of one option A or two. And they take your point that the words on the page look very good for you, but we also know that Congress didn't intend for those differences in spacing and numerology to have a difference in mean end, don't we? No. No. Congress modeled, it's certainly true, that Congress modeled the bank fraud statute on the mail fraud statute, but that doesn't mean Congress wanted the two statutes to be code terminus. In fact, Congress not only expressed its understanding that these were disjunctive for the various structural reasons, which I think are inescapable from the text, but also Congress modified the text itself. Congress didn't simply say a scheme to fraud. It requires a scheme to defraud a financial institution. Congress did not say a scheme to obtain money or property. It specified that it's not only property of the bank, owned by the bank, it is property under the bank's custody, that the bank doesn't own, and bank property of the bank owns, but it's not even under its custody or control, it's under the custody or control of others. This is a different statute, of course modeled on the mail fraud statute, but it's different. And Congress, I don't think in 1984, could have been more clear about its intent to make these two provisions that is the intent to defraud and the intent to obtain provisions distinct based on the choices that it made in text. It's just, I think, impossible to read the text and come away with the conclusion that in 1984, what Congress intended, regardless of what happened in the mail fraud statute in 1987, that Congress intended that, or not only standing the only reading of or in this context that makes any textual sense, it's not even defended in the textual argument on the other side, that Congress meant that or in that structure to mean anything but or, that is a disjunctive with two separate clauses having independent meaning. And in fact, it would be anomalous to do so because Section 2 covers, for instance, bank owned property. That's not under the custody or control of the bank. So why would you intend to defraud the bank when you're trying to really get it from the custodian of the bank's property? The idea would be that the means obtained at the very least would probably be directed to the custodian of the property, not which is not always the bank under clause too. Is the government still taking the position that it took in the district court then 1341? It also covers this case. Well, we disagree with the Court of Appeals precedent, which says you need a risk of loss under clause 1. But the government acquiesced to the district court's narrowing of this to clause 2. Well, along those lines, if we were to agree that under sub 2, it was necessary to show an intent to defraud the bank, what would the government have to prove in an altered check case? Well, I guess you have had to prove under sub 1 if you can probably, if this case could properly be prosecuted under sub 1. Well, you'd have to show that the scheme was actually intended to obtain, to deceive the bank as well as obtain its property, as opposed to a, in that intent, difference can be significant in cases. What we'll have to show here is that the, how can that intent to be different significance? I mean, I would have thought that you would have said the same proof that goes to whether you intend to obtain the bank property, even though you're presenting this check only to a third party, and the check may or may not be honored by the bank, that you could say the exact same thing about whether you intend to defraud the bank. We certainly would probably belong to the same types of evidence. We would then have the additional burden of having to show that the intent was to deceive the bank specifically. What I'm getting at is, would this require delving into the defendant's knowledge of the legal relationship between the merchant here and the bank? I think it inevitably is going to come to that, and you're going to throw to juries these questions of like, you know, despite the fact that the defendant has used the check, the defendant really know what a check was or the defendant, what was the check? But why isn't that the same under the intent to obtain bank property? Were you also, the defendant might say, no, I really didn't intend to obtain property because I didn't really know whether the bank would honor the check, and in fact I thought it wouldn't. Well, the scheme would be to obtain. You don't have to necessarily show that the specific means that you were using were intended to deceive the bank because that requires a lot more ink or dirt. But even on the obtained property wing, it's obtained property from the bank, isn't it? Not obtained property from the bank

. But that requires us to read it differently from the way we read the exact same words without the numbers, but the exact same words in McNally. And we know that Congress wanted the bank fraud statute to mirror the mail and wire fraud statute. So we end up with this, you know, if we go with your friend over there, we read a statute in a way we wouldn't normally, but if we go with you, we have to read these two statutes that say the same thing and that we know Congress meant to say the same thing differently. Right. And I think that there are very sound reasons for doing that, and I'll explain why. First, when you look at the statute, Section 1344, this is on page 5A, and the mail fraud statute is on 1341 and 2A, they're quite different. I mean, even when we just look at the statutory structure alone, Congress broke these clauses up, put them on different lines, numbered them, indented them equally, one would not naturally say, you have the option of one option A or two. And they take your point that the words on the page look very good for you, but we also know that Congress didn't intend for those differences in spacing and numerology to have a difference in mean end, don't we? No. No. Congress modeled, it's certainly true, that Congress modeled the bank fraud statute on the mail fraud statute, but that doesn't mean Congress wanted the two statutes to be code terminus. In fact, Congress not only expressed its understanding that these were disjunctive for the various structural reasons, which I think are inescapable from the text, but also Congress modified the text itself. Congress didn't simply say a scheme to fraud. It requires a scheme to defraud a financial institution. Congress did not say a scheme to obtain money or property. It specified that it's not only property of the bank, owned by the bank, it is property under the bank's custody, that the bank doesn't own, and bank property of the bank owns, but it's not even under its custody or control, it's under the custody or control of others. This is a different statute, of course modeled on the mail fraud statute, but it's different. And Congress, I don't think in 1984, could have been more clear about its intent to make these two provisions that is the intent to defraud and the intent to obtain provisions distinct based on the choices that it made in text. It's just, I think, impossible to read the text and come away with the conclusion that in 1984, what Congress intended, regardless of what happened in the mail fraud statute in 1987, that Congress intended that, or not only standing the only reading of or in this context that makes any textual sense, it's not even defended in the textual argument on the other side, that Congress meant that or in that structure to mean anything but or, that is a disjunctive with two separate clauses having independent meaning. And in fact, it would be anomalous to do so because Section 2 covers, for instance, bank owned property. That's not under the custody or control of the bank. So why would you intend to defraud the bank when you're trying to really get it from the custodian of the bank's property? The idea would be that the means obtained at the very least would probably be directed to the custodian of the property, not which is not always the bank under clause too. Is the government still taking the position that it took in the district court then 1341? It also covers this case. Well, we disagree with the Court of Appeals precedent, which says you need a risk of loss under clause 1. But the government acquiesced to the district court's narrowing of this to clause 2. Well, along those lines, if we were to agree that under sub 2, it was necessary to show an intent to defraud the bank, what would the government have to prove in an altered check case? Well, I guess you have had to prove under sub 1 if you can probably, if this case could properly be prosecuted under sub 1. Well, you'd have to show that the scheme was actually intended to obtain, to deceive the bank as well as obtain its property, as opposed to a, in that intent, difference can be significant in cases. What we'll have to show here is that the, how can that intent to be different significance? I mean, I would have thought that you would have said the same proof that goes to whether you intend to obtain the bank property, even though you're presenting this check only to a third party, and the check may or may not be honored by the bank, that you could say the exact same thing about whether you intend to defraud the bank. We certainly would probably belong to the same types of evidence. We would then have the additional burden of having to show that the intent was to deceive the bank specifically. What I'm getting at is, would this require delving into the defendant's knowledge of the legal relationship between the merchant here and the bank? I think it inevitably is going to come to that, and you're going to throw to juries these questions of like, you know, despite the fact that the defendant has used the check, the defendant really know what a check was or the defendant, what was the check? But why isn't that the same under the intent to obtain bank property? Were you also, the defendant might say, no, I really didn't intend to obtain property because I didn't really know whether the bank would honor the check, and in fact I thought it wouldn't. Well, the scheme would be to obtain. You don't have to necessarily show that the specific means that you were using were intended to deceive the bank because that requires a lot more ink or dirt. But even on the obtained property wing, it's obtained property from the bank, isn't it? Not obtained property from the bank. It is obtained property from the bank. Well, in the custody of the bank. It doesn't have to be in the custody of the bank. It can be bank owned property in the custody of others. So, for instance, banks have a lot of assets. For instance, they can foreclose on houses and such. In those contexts, you might have someone who is deemed to obtain bank property by directing their fraud to a third party to whom the bank has entrusted their... No, but in a case like this, wouldn't the difficulties of proof be the same? The person, whether you charge somebody with trying to defraud the bank or with trying to obtain property owned by or in the custody of the bank? If Justice Alito was right as to the one that all these questions about the relationship between a bank and a retailer are going to come in, isn't he also right as to the other? I'm not quite... I don't think that's quite right. And the reason is that whenever you have to show an additional intent requirement, it ups the ante. Just like in homicide, you have various regrdations of a homicide, including a proverb. I think that's a good idea. That doesn't be answered depend on from whom they forehound the money either under in the custody of the bank has to be obtained. If it doesn't have to be obtained by the defendant, then it wouldn't seem to me that there would be much of a question, because even if the only thing that the defendant obtains from the merchant is an Xbox. If the check is honored, it is going to be obtained by the merchant. So somebody is going to be obtaining money from the bank if the check is ultimately honored. I would just qualify that by saying that the defendant is obtaining the money, it's obtaining it through the check to be paid to the merchant. That's the ultimate. Excuse me. You have to posit his expectation that the check will be honored, don't you? It has to, the scheme has to contemplate that. Exactly. And if it's a scheme that's making alterations that no reasonable person would expect the bank to honor, it seems to me you're out of luck. Well, I don't, if I might respond, Mr. Chief Justice, the, I don't think that actually plays out in fact. Banks suffer about a billion dollars in check fraud a year. There are 10 billion dollars that banks put into check fraud prevention. There are so many checks that fly through, including the checks here. If you look at the checks here, the ones that he got caught for, not the ones that he might have washed and dried, weren't artfully done, but some still go through. And the transaction costs that it imposes on the financial system is something that Congress could have been concerned with

. It is obtained property from the bank. Well, in the custody of the bank. It doesn't have to be in the custody of the bank. It can be bank owned property in the custody of others. So, for instance, banks have a lot of assets. For instance, they can foreclose on houses and such. In those contexts, you might have someone who is deemed to obtain bank property by directing their fraud to a third party to whom the bank has entrusted their... No, but in a case like this, wouldn't the difficulties of proof be the same? The person, whether you charge somebody with trying to defraud the bank or with trying to obtain property owned by or in the custody of the bank? If Justice Alito was right as to the one that all these questions about the relationship between a bank and a retailer are going to come in, isn't he also right as to the other? I'm not quite... I don't think that's quite right. And the reason is that whenever you have to show an additional intent requirement, it ups the ante. Just like in homicide, you have various regrdations of a homicide, including a proverb. I think that's a good idea. That doesn't be answered depend on from whom they forehound the money either under in the custody of the bank has to be obtained. If it doesn't have to be obtained by the defendant, then it wouldn't seem to me that there would be much of a question, because even if the only thing that the defendant obtains from the merchant is an Xbox. If the check is honored, it is going to be obtained by the merchant. So somebody is going to be obtaining money from the bank if the check is ultimately honored. I would just qualify that by saying that the defendant is obtaining the money, it's obtaining it through the check to be paid to the merchant. That's the ultimate. Excuse me. You have to posit his expectation that the check will be honored, don't you? It has to, the scheme has to contemplate that. Exactly. And if it's a scheme that's making alterations that no reasonable person would expect the bank to honor, it seems to me you're out of luck. Well, I don't, if I might respond, Mr. Chief Justice, the, I don't think that actually plays out in fact. Banks suffer about a billion dollars in check fraud a year. There are 10 billion dollars that banks put into check fraud prevention. There are so many checks that fly through, including the checks here. If you look at the checks here, the ones that he got caught for, not the ones that he might have washed and dried, weren't artfully done, but some still go through. And the transaction costs that it imposes on the financial system is something that Congress could have been concerned with. In fact, we think it was. Thank you, Council. Five minutes, Mr. Russell. Thank you. Congress was concerned about the risks to banks of all their checks, but it dealt with that in Section 513. Not Section 1344. What was in the scope of 513? Was it clear? I don't think that that's correct. I mean, we cited a case in our brief in which the government actually succeeded in prosecuting someone for an altered check under Section 513. I don't understand the argument that checks aren't encompassed within 513. We've reproduced the language at 10a of the blue brief. What it says is it chronilizes the use of a forged security, and it defines forged to mean altered. It defines security to mean check. And then it has to be a forged security of an organization. And it defines organization to mean any legal entity other than a government, established or organized for any purpose, and includes any corporation, company association firm, et cetera. I just don't understand what the argument is that Section 513 doesn't cover some species of altered checks. But at the very least, if you thought that Congress must have intended to federally criminalize use of all altered checks, it's an easier interpretation to say that 513 covers it than the bank fraud statute. The government's argument here today makes utterly clear how broad the federal bank fraud statute will be if you adopt their interpretation to give it encompasses that the Faker and wire example, and all of the ones in our region and it includes every not sufficient funds case. And in the government acknowledge that. Sotomayor, please tell me why what your objections are to the by means of limiting principle of the government gives as an alternative. So there's several objections. One is the one that you raised. There's no basis for it in the text. It is a limitation on what the statute says. Any false representation, and they say no, only those false representations that would foreseeably go to a bank and might fool an independent track. Second, it doesn't do any useful work because all it does is the only difference between their fallback position and intent to defraud a bank is two things. One is it permits them to bring cases in these third party altered check cases, and we've argued. We don't think that those fall under the statute anyway. But even if you think that they do, the much easier thing to say is they fall under the statute, intent to require no defraud a bank is required, but the use of the altered check is sufficient evidence. Well, the government does a lot of work because it takes out of the equation schemes to defraud where the bank is not going to be liable. Right. I'm saying it doesn't do any work that intent to defraud a bank doesn't already do. So if you're choosing between our test and their test, both tests allow prosecutions of paradigmatic fraud cases

. In fact, we think it was. Thank you, Council. Five minutes, Mr. Russell. Thank you. Congress was concerned about the risks to banks of all their checks, but it dealt with that in Section 513. Not Section 1344. What was in the scope of 513? Was it clear? I don't think that that's correct. I mean, we cited a case in our brief in which the government actually succeeded in prosecuting someone for an altered check under Section 513. I don't understand the argument that checks aren't encompassed within 513. We've reproduced the language at 10a of the blue brief. What it says is it chronilizes the use of a forged security, and it defines forged to mean altered. It defines security to mean check. And then it has to be a forged security of an organization. And it defines organization to mean any legal entity other than a government, established or organized for any purpose, and includes any corporation, company association firm, et cetera. I just don't understand what the argument is that Section 513 doesn't cover some species of altered checks. But at the very least, if you thought that Congress must have intended to federally criminalize use of all altered checks, it's an easier interpretation to say that 513 covers it than the bank fraud statute. The government's argument here today makes utterly clear how broad the federal bank fraud statute will be if you adopt their interpretation to give it encompasses that the Faker and wire example, and all of the ones in our region and it includes every not sufficient funds case. And in the government acknowledge that. Sotomayor, please tell me why what your objections are to the by means of limiting principle of the government gives as an alternative. So there's several objections. One is the one that you raised. There's no basis for it in the text. It is a limitation on what the statute says. Any false representation, and they say no, only those false representations that would foreseeably go to a bank and might fool an independent track. Second, it doesn't do any useful work because all it does is the only difference between their fallback position and intent to defraud a bank is two things. One is it permits them to bring cases in these third party altered check cases, and we've argued. We don't think that those fall under the statute anyway. But even if you think that they do, the much easier thing to say is they fall under the statute, intent to require no defraud a bank is required, but the use of the altered check is sufficient evidence. Well, the government does a lot of work because it takes out of the equation schemes to defraud where the bank is not going to be liable. Right. I'm saying it doesn't do any work that intent to defraud a bank doesn't already do. So if you're choosing between our test and their test, both tests allow prosecutions of paradigmatic fraud cases. Both cases both tests eliminate the Renoir example. But their test permits the only difference, practical differences, their case facilitates prosecution in these third party cases that we don't think are covered by the statute anyway. But even if there are, you don't have to adopt this extra textual interpretation. I would just stand how if the falsies is made to target who gives the person the DVD of the shelf, how you prove that that's an intent to defraud the bank as opposed to defraud target. Well, so there's the charge you give to the jury to get to that. I think the principle is the charge that they want to get. You say that they have to show that the defendant intended to deceive a bank and the government can argue and the government has successfully argued in many cases that use of an alter check shows that the defendant intended to deceive a bank. And the government raises, you know, the government never likes to have to prove intent. But the government raises these theoretical difficulties in proving intent, but it hasn't shown that this actually ever arises. In fact, the government routinely convicts people in circumstances like this case, even in circuits where intended to defraud a bank is required. It's just that they didn't try to do that here because the didn't ask the jury to make that finding. In addition, the difficulty of their test is just plain strange. They say you should adopt their test because Congress didn't care about intended to defraud a bank. Then they adopt a rule that looks very much like the kind of rule you would adopt if you thought Congress cared about intended to defraud a bank. It simply substituting some circumstantial evidence that one could argue to a jury shows intended to defraud a bank and saying that's all the government has to prove that this is true. Here it takes true alters. That the representation has to be made to the bank, right? That's the only way you can get this within the statute. That's correct. But that's different from an intent to defraud the bank, isn't it? I think, well, that's the first half. So there's two pieces intended to deceive the bank, intent to obtain bank property. We say that you can read the statute to require intended to deceive the bank because there's a statutory silence. And then the government has to prove intent to obtain bank property. That's easily proven when the check is directly presented to a bank. We don't think it can be proven in a case like this because our client intended to obtain targets property not the bank. But where's the textual silence about it? Where do you get intended to deceive the bank into this? I think that's what I get it from this Court's decision, for example, in McNally, where it says, Where do you get it from the text? I understand the argument. It's a very credible argument. It doesn't say to whom the representations have to be made. So you put in to the bank. I don't see how you get from there to defrauding the bank. So if you read it to mean that you have to direct the false statement to the bank, that is the first half of what McNally said in intended to deceive the bank or intended to defraud the bank is. So you have to intend to deceive the bank. And the second half is you have to get, intend, the deceit to obtain bank property, which is on the face of Subduction 2. Thank you, Council

. The case is submitted