U.S. v. Bennett, No. 06-50580 (9-10-10) (Wardlaw with Kleinfeld; dissent by Callahan). It walks like a bank; it talks like a bank; it is a wholly owned subsidiary of a bank, it even issues mortgages like a bank; BUT it is not a bank, under 18 U.S.C. 1344 because it is not a financial institution as defined. This corporation, Equicredit, did not have any deposits or assets insured by the FDIC. However, Equicredit was 100% owned by BofA, which is a financial institution as defined, and did have deposits insured by the FDIC. The problem is that the defendant defrauded Equicredit with bad mortgages in a property flipping scheme and is now prosecuted for bank fraud under 1344 which requires insured assets. The 9th held that the fact a subsidiary corporation is 100% owned by a bank which falls under the 1344 definition does not make the subsidiary a bank. It has a separate independent existence. The 9th holds this as a tenet of 100 years of corporations law. As such, fraud there is, but it is not prosecutable under 1344. Callahan dissents, focusing on the "sufficiency of evidence" standard, and arguing that the jury had enough evidence to find that the defendant received property under the "custody and control" of BofA even if BofA did not exercise control over Equicredit.
U.S. v. Espinoza-Morales, No. 09-50267 (9-10-10) (Paez with B. Fletcher; dissent by Walter, D.J.). This 1326 appeal decides whether a prior conviction for sexual battery and for penetration of a foreign object under California Penal Code 289(a)(1) is a "crime of violence" for 2L1.2 purposes. Using the categorical analysis, and then a modified categorical analysis, the 9th finds that it is not. The focus is on whether the elements of the offense all require force or violence. They do not because, as discussed in prior precedent, the duress or restraint might be by words only, or by fraud. The "penetration" by itself does not require additional force than what is stated in the sexual battery. Under a modified categorical approach, the abstract of judgment and information do not provide enough information to show that the defendant used or attempted to use force. The state court unpublished appellate opinion only dealt with the Vienna Convention right to consult and the facts of the offense were not part of the opinion's decision. There is no way of conclusively showing what the state jury had convicted defendant of. The sentence is vacated and remanded for resentencing on the existing record. In dissent, Walter argues that the state appellate opinion could be used in a modified categorical approach.
Congratulations to Federal Defender Doug Keller of the Federal Defenders of San Diego.