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United States Court of Appeals for the Third Circuit
March 29, 2022, Argued; November 30, 2022, Opinion Filed
Nos. 19-3812 & 20-2235
ROTH, Circuit Judge:
A jury convicted Frederick Banks of wire fraud, and the District Court sentenced him to 104 months' imprisonment and three years' supervised release. On appeal, Banks argues that the District Court erred in three ways, by (1) denying his constitutionally protected right to self-representation, (2) applying the loss enhancement to the fraud guideline in the United States Sentencing Guidelines because there was no "actual loss," and (3) imposing certain special conditions of supervised release.1 ] We conclude that the loss enhancement in the Guideline's application notes impermissibly expands the word "loss" to include both intended loss and actual loss. Thus, the District Court erred when it applied the loss [*2] enhancement because Banks's crimes caused no actual loss. We will, therefore, affirm the judgment of the District Court except on the issue of loss enhancement; we will remand this case to the District Court for it to determine loss and to resentence Banks.
In January 2016, a federal grand jury indicted Frederick Banks for stalking, wire fraud, aggravated identity theft, and making false statements. The wire fraud charges "related to interlocking schemes . . . carried out by [Banks] to fraudulently gain the money and property of others in relation to the FOREX.COM international exchange system by submitting phony registration information for himself and then using those registrations to execute bogus trades that would drop money into bank accounts that he had set up."2
A. The Scheme
Banks's scheme targeted Gain Capital Group, which did business as Forex.com. Gain Capital's clients opened accounts, deposited funds, and then used those funds to invest in the foreign currency exchange market. Banks's plot was to open Gain Capital accounts and make electronic deposits into those accounts, but his deposits were drawn on bank accounts with insufficient funds. He then tried to withdraw funds [*3] from these accounts, "with the goal being to complete the withdrawals/transfers before the lack of supporting funds could be detected." To support his scheme, Banks made fraudulent representations through text message, telephone conversations, and emails. He misrepresented his identity, his income, his occupation, his net worth, and the balances in his bank accounts.
Importantly, Gain Capital suffered no actual loss. Banks made fraudulent deposits of $324,000 and unsuccessfully executed 70 withdrawals/transfers totaling $264,000. Gain Capital, however, did not transfer a single dollar to Banks.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2022 U.S. App. LEXIS 33021 *; __ F.4th __
UNITED STATES OF AMERICA v. FREDERICK H. BANKS, Appellant
Prior History: [*1] Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. Criminal Action No. 2-15-cr-00168-001). District Judge: Honorable Mark R. Hornak.
United States v. Banks, 2016 U.S. Dist. LEXIS 185166 (W.D. Pa., Apr. 22, 2016)
district court, Sentencing, Guideline, enhancement, special condition, supervised release, actual loss, waive, Dictionary, probation, conditions, vague, competent to stand trial, right to counsel, intended-loss, collection, competency, fraudulent, convicted, deference, knowingly, deposits, argues, funds, criminal charge, self-representation, regulation, ambiguity, contends, withdraw
Criminal Law & Procedure, Departures From Guidelines, Upward Departures, Property Damage, Constitutional Law, Fundamental Rights, Criminal Process, Assistance of Counsel, Counsel, Right to Self-Representation, Waiver, Standards, Administrative Law, Judicial Review, Standards of Review, Rule Interpretation, Deference to Agency Statutory Interpretation, Sentencing, Imposition of Sentence, Factors, Fraud Against the Government, False Claims, Penalties, Counterfeiting, Document Counterfeiting, Theft & Related Offenses, Forgery, Larceny & Theft, Fundamental Freedoms, Judicial & Legislative Restraints, Overbreadth & Vagueness of Legislation, Supervised Release, Governments, Legislation, Vagueness, Procedural Due Process, Scope of Protection, Pronouncement