| WASHINGTON, April 1
WASHINGTON, April 1 The U.S. Supreme Court on
Tuesday appeared poised to limit the scope of a federal criminal
law that targets people who defraud banks.
A ruling along those lines could prevent federal prosecutors
from using the law to crack down on routine fraud, such as the
use of altered checks to purchase merchandise.
In the future, prosecutors might have to show the defendant
intended to defraud a bank in order to win a conviction using
the law. Cases of fraud that do not include intent to defraud
could still be prosecuted under state laws or potentially via
another federal law that imposes shorter sentences.
The case will not affect the ability of prosecutors to use
the law to go after direct schemes to defraud financial
The nine justices heard a one-hour oral argument on Tuesday
in an appeal brought by Kevin Loughrin, who was convicted in
Salt Lake City, Utah, of six counts of bank fraud for stealing
checks he then altered so he could purchase merchandise at
Target Corp stores.
Loughrin told police he intended to buy items using the
checks, then return them for cash refunds. He was charged with
using altered checks totaling $1,184.
During the argument a majority of the justices appeared to
agree with Loughrin's lawyer that the federal government's
interpretation of the law was too broad but it was unclear
exactly what limits the court would set. The court's
conservative members, in particular, are often concerned about
expansive federal power at the expense of states.
"This is a sweeping interpretation you're offering us,"
Justice Anthony Kennedy told Anthony Yang, assistant to the U.S.
Under the government's approach, federal prosecutors could
pursue cases involving "every fraudulent transaction in the
economy, whenever a check is involved," Kennedy added.
Between 2006 and 2010 the government sought to prosecute
nearly 3,000 cases using the statute, according to court papers.
In Loughrin's case, the Denver-based 10th U.S. Circuit Court
of Appeals upheld his conviction in a March 2013 ruling.
Loughrin did not appeal his related convictions for identity
theft and possession of stolen mail.
A decision is expected by the end of June. The case is
Loughrin v. United States, U.S. Supreme Court, 13-316.
(Reporting by Lawrence Hurley; Editing by Howard Goller and