United States v. Clark

Last updated
United States of America v. Clark
Court United States Court of Appeals, Eighth Circuit
Full case nameUnited States v. Clark
DecidedFebruary 10, 2012
Citation(s)United States of America, Appellee, v. Jason Elliott Clark, Appellant (No. 11–2270)
Court membership
Judge(s) sittingWollman, Murphy and Benton

United States of America v. Clark (U.S vs. Clark, 11-2270) (United States Court of Appeals, Eighth Circuit 2012) is the name of a lawsuit against Jason Elliott Clark by the U.S. government based on identity theft, bank fraud and conspiracy. This was an appeal from the United States District Court for the District of Minnesota. Clark appealed his conviction for aggravated identity theft based on the sufficiency of the evidence and the court's admission of certain prior acts of evidence.

A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint. If the plaintiff is successful, judgment is in the plaintiff's favor, and a variety of court orders may be issued to enforce a right, award damages, or impose a temporary or permanent injunction to prevent an act or compel an act. A declaratory judgment may be issued to prevent future legal disputes.

Identity theft deliberate use of someone elses identity, usually as a method to gain a financial advantage or obtain credit and other benefits in the other persons name, and perhaps to the other persons disadvantage or loss

Identity theft is the deliberate use of someone else's identity, usually as a method to gain a financial advantage or obtain credit and other benefits in the other person's name, and perhaps to the other person's disadvantage or loss. The person whose identity has been assumed may suffer adverse consequences, especially if they are held responsible for the perpetrator's actions. Identity theft occurs when someone uses another's personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term identity theft was coined in 1964. Since that time, the definition of identity theft has been statutorily prescribed throughout both the U.K. and the United States as the theft of personally identifiable information, generally including a person’s name, date of birth, social security number, driver’s license number, bank account or credit card numbers, PIN numbers, electronic signatures, fingerprints, passwords, or any other information that can be used to access a person’s financial resources.

Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many instances, bank fraud is a criminal offence. While the specific elements of particular banking fraud laws vary depending on jurisdictions, the term bank fraud applies to actions that employ a scheme or artifice, as opposed to bank robbery or theft. For this reason, bank fraud is sometimes considered a white-collar crime.

Contents

Case summary

Jason Elliott Clark along with, Marcus Benson, Jason Richard Hansen, and Nou Thoa were indicted for stealing identities and subsequently stealing more than $150,000 from victims. Clark was charged with two counts of bank fraud and one count of aggravated identity theft. Clark and his partners in crime conspired to obtain funds from the accounts of others by creating counterfeit checks including stolen bank routing and account numbers. Clark used personally identifiable information with the intent to commit bank fraud and access device fraud. The bank fraud charges were related to the unlawful withdrawals and transfer of money from the accounts of the victims. Full conviction would have resulted in a maximum penalty of 30 years for conspiracy, 30 years for each count of bank fraud, 15 years for identity theft, 10 years for each count of access device fraud, and two years on each aggravated identity theft count. Ultimately Clark was sentenced to 48 months in prison based on bank fraud conspiracy under 18 U.S.C.   § 1349 , bank fraud (two counts) under 18 U.S.C.   § 1344 , identity theft under 18 U.S.C.   § 1028 and aggravated identity theft under 18 U.S.C.   § 1028(a)(1) .

In law, a conviction is the verdict that usually results when a court of law finds a defendant guilty of a crime. The opposite of a conviction is an acquittal. In Scotland and in the Netherlands, there can also be a verdict of "not proven", which counts as an acquittal. There are also cases in which the court orders that a defendant not be convicted, despite being found guilty; in England, Wales, Canada, Australia, and New Zealand the mechanism for this is a discharge.

Title 18 of the United States Code is the main criminal code of the federal government of the United States. The Title deals with federal crimes and criminal procedure. In its coverage, Title 18 is similar to most U.S. state criminal codes, which typically are referred to by such names as Penal Code, Criminal Code, or Crimes Code. Typical of state criminal codes is the California Penal Code. Many U.S. state criminal codes, unlike the federal Title 18, are based on the Model Penal Code promulgated by the American Law Institute.

Crime details

The conspiracy was led by Benson, while Clark, Hansen and Thoa were co-conspirators. Benson provided fraudulent checks which the co-conspirators deposited into his personal bank account. The money was then withdrawn, the bulk of it sent to Benson and a small portion kept by the co-conspirators as payment for the services provided. Benson, Clark and Hanson originally became friends when working together at an electronics store. Hansen left this job and began working as an analyst for a mortgage broker. During his employment, he decided to use confidential personally identifiable information including social security numbers, dates of birth, addresses, and account numbers of individuals applying for mortgage loans. Benson at the same time also started his own mortgage loan brokerage. Hansen contacted Benson through Clark to offer him this personal information, claiming they were mortgage leads. Ultimately Benson used the confidential personally identifiable information to obtain the fraudulent checks. Hansen also approached Thao for assistance with the check-cashing scheme. In September 2007, Clark deposited a check from the victim (D.R.O) for $10,250 and then again for $145,000; supposedly as payment for a property that Clark owned and was now selling. Wells Fargo initiated an investigation where the initial suspicion was that Clark was a fraud victim. It turned out quite the opposite later when they received a testimony from D.R.O that they had in fact never sent any money to Clark. Clark subsequently admitted to getting the checks from Benson, withdrawing the funds, and sending him the vast majority of the funds. Officers arrested Benson and executed a consent search of his home where they found fraudulent ID documents, credit cards, and skimmers as well as photographs of Clark and the other co-defendants, Hansen and Thao.

Bank account collective name for all account types, credit institutions operates for their clients

A bank account is a financial account maintained by a bank for a customer. A bank account can be a deposit account, a credit card account, a current account, or any other type of account offered by a financial institution, and represents the funds that the customer has entrusted to or borrowed from the financial institution.

Mortgage loan loan secured using real estate

A mortgage loan or, simply, mortgage is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)".

In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law, a criminal law, or it may cause no loss of money, property or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.

Trial and appeal

Based on 18 U.S.C.   § 1028(a)(1) , the government must prove that the defendant knew that the identity was associated with a real person rather than being fabricated. Clark argued that the evidence was insufficient for a reasonable juror to find beyond a reasonable doubt that Clark knew that the ID on the check belonged to an actual person. The court concluded that a reasonable juror could infer that Clark (as a bank account holder and prior identity thief) knew that banks only open accounts and give credit to real people.

Double jeopardy

A defendant may move for judgment of acquittal after the government closes its evidence or all evidence under rule 23 [1] of the Federal Rules of Criminal Procedure. Clark attempted to gain acquittal on identity theft and aggravated identity theft. Clark argued that sections 18 U.S.C.   § 1028A and 18 U.S.C.   § 1028(a)(7) of US code proscribe to the same offense. The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution would prohibit a sentence for both identity theft and aggravated identity theft. In United States v. Felix 503 U.S. 378 (1992), it was ruled that an offense and conspiracy to commit that offense are not the same; fundamentally one cannot be tried twice for the same offense. In this case however, the court decided that section 18 U.S.C.   § 1028(b)(2) allows for punishment for both identity theft and aggravated identity theft and that the intent of the United States Congress is to impose multiple punishments for both identity theft and aggravated identity theft, as both are separate statutes. In Blockburger v. United States , 284 U.S. 299 (1932), it was confirmed that multiple punishments for convictions that fall under separate statutes do not violate the double jeopardy clause. The motion of judgment of acquittal was denied, citing Chase [2] applying the same standard of review to the district.

The Federal Rules of Criminal Procedure are the procedural rules that govern how federal criminal prosecutions are conducted in United States district courts and the general trial courts of the U.S. government. They are the companion to the Federal Rules of Civil Procedure. The admissibility and use of evidence in criminal proceedings is governed by the separate Federal Rules of Evidence.

The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution provides: "[N]or shall any person be subject for the same offence to be twice put in jeopardy of life or limb..." The four essential protections included are prohibitions against, for the same offense:

Fifth Amendment to the United States Constitution Amendment guaranteeing rights related to trials and due process

The Fifth Amendment to the United States Constitution addresses criminal procedure and other aspects of the Constitution. It was ratified in 1791 as part of the Bill of Rights. The Fifth Amendment applies to every level of the government, including the federal, state, and local levels, as well as any corporation, private enterprise, group, or individual, or any foreign government in regard to a US citizen or resident of the US. The Supreme Court furthered the protections of this amendment through the Due Process Clause of the Fourteenth Amendment.

Character evidence

During the trial, the district court brought up a case from 2001 where Clark pleaded guilty for identity theft. Clark argued that this reference to prior bad acts was not admissible as character evidence. The court concluded that evidence of prior bad actions was in fact admissible under exceptions of rule 404(b) [3] of the Federal Rules of Evidence for limited purposes such as intent, knowledge or absence of mistake as long as it was relevant to a material issue. Since Clark presented a defense that he acted in good faith when depositing these checks, his knowledge and intent were considered an issue. Rule 404 (b) also permits the inclusion of past bad acts when the prior act is similar and not too remote in time from the current crime. The motion for admission of prior acts was also denied. Citing Ruiz-Estrada, [4] the court stated that they would only reverse the decision when such evidence had no bearing on the case and was primarily being used to prove that the defendant had the propensity to commit a criminal act. Citing Balanga, [5] the court concluded that a reasonable juror could have found the defendant guilty of the charged conduct beyond a reasonable doubt. The court furthered that the conviction can be based on both circumstantial and direct evidence, citing Erdman. [6]

First adopted in 1975, the Federal Rules of Evidence codify the evidence law that applies in United States federal courts. In addition, many states in the United States have either adopted the Federal Rules of Evidence, with or without local variations, or have revised their own evidence rules or codes to at least partially follow the federal rules.

Clark ultimately received a total sentence of 48 months in jail – 24 months for bank fraud and 24 months for aggravated identity theft.

Identity theft is usually not committed as an end in itself but rather as a means of a facilitating some other crime like financial or real property theft. Identity theft was not a federal crime in the US until 1998 when the Identity Theft and Assumption Deterrence Act [7] became effective. Previously only credit granting agencies who suffered monetary losses were considered victims. With the passing of this act it was the first time that the person whose ID was stolen was viewed as the actual victim.

Under 18 U.S.C.   § 1028 the production of an unlawful identification document, authentication features or false identification, possesses such a document is committing a crime and will be appropriately punished per stated consequences. One of the largest most sophisticated identity theft cases in the US involved 111 people who used skimming devices to swipe and steal consumer credit card information at retail and food establishments. [8] It is estimated that identity theft costs the US Internal Revenue Service about $5.2 Billion in 2011. [9]

Check fraud in the US cost American consumers and banks about $20 billion in 2010 and some argue that this system (checks) should have been eliminated a long time ago. [10] Not only does eliminating checks reduce the probability of fraud but also reduce the costs of processing. Bank fraud in the US is covered under 18 U.S.C.   § 1344 and refers to any attempt to defraud a financial institution for the purpose of obtaining money, funds, credits, assets or other property owned by the financial institution.

As most financial systems these days are electronic bank fraud crimes are often executed through computer systems and networks. Under 18 U.S.C.   § 1030(4) exceeding authorization to a computer system knowingly with the intent to defraud and obtain anything of value is also illegal. Damaging a bank computer is also an offense under 18 U.S.C.   § 1030(a)(5) .

Fraud prevention - data mining and pattern identification

Companies are taking advantage of security information and event management systems in conjunction with large data mining and pattern identification techniques to reduce the risk of financial fraud. Patterns of fraud and inappropriate transactions must be discerned from normal or acceptable user activity. Although the above case focuses on check fraud, credit card fraud has typically been the most prevalent type of identity theft facilitated fraud. [11] Banks have employed real-time monitoring based on rule based engines however due to the dynamic nature of fraud, the bank's own fraud trends, the customer's patterns and the exchange of data between financial institutions has to be just as flexible. [12]

Summary of laws applied

See also

Related Research Articles

Racketeer Influenced and Corrupt Organizations Act U.S. law

The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. The RICO Act focuses specifically on racketeering and allows the leaders of a syndicate to be tried for the crimes they ordered others to do or assisted them in doing, closing a perceived loophole that allowed a person who instructed someone else to, for example, murder, to be exempt from the trial because they did not actually commit the crime personally.

Theft Act of taking anothers property without permission or consent

In common usage, theft is the taking of another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting, library theft, and fraud. In some jurisdictions, theft is considered to be synonymous with larceny; in others, theft has replaced larceny. Someone who carries out an act of or makes a career of theft is known as a thief. The act of theft is also known by other terms such as stealing, thieving, and filching.

Fair and Accurate Credit Transactions Act

The Fair and Accurate Credit Transactions Act of 2003 is a United States federal law, passed by the United States Congress on November 22, 2003, and signed by President George W. Bush on December 4, 2003, as an amendment to the Fair Credit Reporting Act. The act allows consumers to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. In cooperation with the Federal Trade Commission, the three major credit reporting agencies set up the web site AnnualCreditReport.com to provide free access to annual credit reports.

A racket, according to the current common and most general definition, is an organized criminal act in which the criminal act is some form of substantial business, or a way to earn illegal money either regularly, or briefly but repeatedly. A racket is therefore generally a repeated or continuous criminal operation. However, originally and often still specifically, a “racket” referred to a criminal act in which the perpetrator or perpetrators fraudulently offer a service to solve a nonexistent problem, a service that will not be put into effect, or a service that would not exist without the racket. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, but that fact may be concealed, with the specific intent to engender continual patronage for this party.

In criminal law, an overt act is the one that can be clearly proved by evidence and from which criminal intent can be inferred, as opposed to a mere intention in the mind to commit a crime. Such an act, even if innocent per se, can potentially be used as evidence against someone during a trial to show participation in a crime. For instance, the purchase of a ski mask, which can conceal identity, is generally a legal act but may be an overt act if it is purchased in the planning of a bank robbery.

The USA PATRIOT Act was passed by the United States Congress in 2001 as a response to the September 11, 2001 attacks. It has ten titles, with the third title written to prevent, detect, and prosecute international money laundering and the financing of terrorism.

Internet fraud prevention is the act of stopping various types of internet fraud. Due to the many different ways of committing fraud over the Internet, such as stolen credit cards, identity theft, phishing, and chargebacks, users of the Internet, including online merchants, financial institutions and consumers who make online purchases, must make sure to avoid or minimize the risk of falling prey to such scams.

Credit card fraud Financial crime

Credit card fraud is a wide-ranging term for theft and fraud committed using or involving a payment card, such as a credit card or debit card, as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft. According to the United States Federal Trade Commission, while the rate of identity theft had been holding steady during the mid 2000s, it increased by 21 percent in 2008. However, credit card fraud, that crime which most people associate with ID theft, decreased as a percentage of all ID theft complaints for the sixth year in a row.

Federal crime in the United States Actions made illegal by Congress

In the United States, a federal crime or federal offense is an act that is made illegal by U.S. federal legislation. Prosecution happens at both the federal and the state levels and so a "federal crime" is one that is prosecuted under federal criminal law and not under state criminal law under which most of the crimes committed in the United States are prosecuted.

Flores-Figueroa v. United States, 556 U.S. 646 (2009), was a decision by the Supreme Court of the United States, holding that the law enhancing the sentence for identity theft requires proof that an individual knew that the identity card or number he had used belonged to another, actual person. Simply using a Social Security Number is not sufficient connection to another individual.

Honest services fraud is a crime defined in 18 U.S.C. § 1346, added by the United States Congress in 1988, which states "For the purposes of this chapter, the term scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."

Identity Theft Resource Center

The Identity Theft Resource Center is a United States non-profit organization founded to provide victim assistance and consumer education through its toll-free call center, website and social media. The ITRC educates consumers, corporations, government agencies, and other organizations on best practices for fraud and identity theft detection, reduction and mitigation; and, serves as a relevant national resource on consumer issues related to cybersecurity, data breaches, social media, fraud, scams, and other issues. It was created in December 1999 in San Diego, California.

Operation Power Outage was a law enforcement sting operation targeted at arresting and indicting members of the Armenian American criminal group Armenian Power operating in the United States. The group is accused of racketeering offenses, bank fraud schemes, kidnappings, and drug trafficking. Armenian Power which originated 20 years ago in East Hollywood and has over 200 members, has developed from a street gang into an international criminal organization.

<i>United States v. Warshak</i>

United States v. Warshak is a criminal case decided by the United States Court of Appeals for the Sixth Circuit holding that government agents violated the defendant's Fourth Amendment rights by compelling his Internet service provider (ISP) to turn over his emails without first obtaining a search warrant based on probable cause. However, constitutional violation notwithstanding, the evidence obtained with these emails was admissible at trial because the government agents relied in good faith on the Stored Communications Act (SCA). The court further declared that the SCA is unconstitutional to the extent that it allows the government to obtain emails without a warrant.

Cyber crime, or computer crime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Netcrime refers, more precisely, to criminal exploitation of the Internet. Issues surrounding this type of crime have become high-profile, particularly those surrounding hacking, copyright infringement, identity theft, child pornography, and child grooming. There are also problems of privacy when confidential information is lost or intercepted, lawfully or otherwise.

<i>United States v. Ivanov</i>

United States v. Ivanov was an American court case addressing subject-matter jurisdiction for computer crimes performed by Internet users outside of the United States against American businesses and infrastructure. In trial court, Aleksey Vladimirovich Ivanov of Chelyabinsk, Russia was indicted for conspiracy, computer fraud, extortion, and possession of illegal access devices; all crimes committed against the Online Information Bureau (OIB) whose business and infrastructure were based in Vernon, Connecticut.

Predicate crime is a legal phrase that comes from the term “predicate”, which bears a definition of “to proclaim” or “to declare”. It is an illegal action that opposed the public order and against the Law. In law practices, “predicate crime” is part of the Criminal Law and is called “predicate offence”, which refers to a crime that is a component of a larger crime. This crime will not have a large impact on its own, although will have a more impact on society if it took part in a larger crime.

References

  1. Rule 23 - Federal Rules of Criminal Procedure, Cornell University - Legal Information Institute
  2. 'United States v. Chase, 451 F.3d 474, 479 (8th Cir. 2006)
  3. Rule 404 - Federal Rules of Criminal Evidence, Cornell University - Legal Information Institute
  4. United States v. Ruiz-Estrada, 312 F.3d 398, 403 (8th Cir. 2002)
  5. United States v. Balanga, 109 F.3d 1299, 1301 (8th Cir. 1997)
  6. United States v. Erdman, 953 F.2d 387, 389 (8th Cir. 1992)
  7. "Identity Theft and Assumption Deterrence Act". Federal Trade Commission Website. Archived from the original on 2012-08-01. Retrieved 2016-02-07.
  8. Compton, Allie (August 7, 2012). "Largest Identity Theft Case In U.S. History". The Huffington Post.
  9. Goldman, Jeff (August 6, 2012). "Identity Theft Costs IRS Billions Every Year". eSecurity Planet.
  10. King, Brett (August 3, 2011). "US Banks wasting Billions on preventable fraud". Banking For Tomorrow.
  11. "Identity Theft - Trends, Patterns and Typologies Reported in Suspicious Activity Reports" (PDF). Depository Institutions - Financial Crimes Enforcement Network - US Government. August 2010.
  12. Head, Subha (January 2012). "Retail Banking Fraud Management: Challenges and Emerging Alternatives".