## Facts

- From March to November 1985, defendants Derek Blackmon, Sidney Jones, Tyrone Stephens, and Cecilia Grace Roland participated in a “pigeon drop” confidence scheme in New York City that targeted elderly women.
- Defendants persuaded victims that “found” money could be converted into foreign currency or invested for high returns and later shared, inducing victims to withdraw large sums from their own bank accounts.
- After the victims withdrew funds and delivered them to defendants, the victims did not recover the money; losses across six victims totaled about $1,197,000.
- The government charged an array of federal offenses, including conspiracy and substantive wire fraud, bank fraud, and (as to Blackmon and Jones) possession of unauthorized access devices and identification documents.
- Evidence included possession by Blackmon and Jones of numerous credit cards and identification documents, characterized by the government as “unauthorized access devices” and “identification documents” possessed with fraudulent or unlawful intent.

## Issues

1. Whether inducing victims to make legitimate withdrawals and then stealing the withdrawn money constitutes bank fraud under 18 U.S.C. § 1344 when the bank is not deceived or exposed to loss.
2. Whether possession of credit cards used primarily as false identification (rather than to obtain goods, services, or funds through the card system) falls within 18 U.S.C. § 1029(a)(3).
3. Whether the challenged jury instructions on vicarious/retroactive liability, and the trial judge’s response to a jury note without first consulting counsel, required reversal of conspiracy and wire-fraud convictions.
4. Whether the proof and instructions adequately supported the substantive wire-fraud convictions under 18 U.S.C. § 1343.

## Decision

- Reversed all bank-fraud convictions under 18 U.S.C. § 1344.
- Vacated certain substantive wire-fraud convictions and certain convictions under 18 U.S.C. § 1029(a)(3) (unauthorized access devices).
- Affirmed the remaining convictions, including the conspiracy to commit wire fraud.
- Held that the trial judge erred in responding to a jury note without consulting counsel, but the error was harmless as to the affirmed counts.
- Remanded for resentencing in light of the altered set of convictions.

## Legal Principles

- 18 U.S.C. § 1344 targets schemes in which a financial institution is the object of the deception or wrongful taking; a fraud against a depositor does not become “bank fraud” merely because it involves routine, lawful banking transactions by the depositor.
- 18 U.S.C. § 1029(a)(3) is directed at credit-card/access-device fraud involving use of devices to obtain value through the payment-card system; using cards chiefly as false identification in a confidence scheme is outside the statute’s intended reach.
- Errors in jury instructions and in ex parte communications with the jury are reviewed for prejudice; convictions may stand when the appellate court concludes the errors did not affect the verdict on particular counts.
- When some counts are reversed or vacated on appeal, resentencing is required to allow the district court to restructure the sentence based on the surviving convictions.

## Conclusion

The Second Circuit rejected an expansive application of federal bank-fraud and access-device statutes to a confidence scheme that defrauded depositors rather than banks, reversed the § 1344 convictions, vacated certain wire-fraud and access-device counts affected by statutory scope and instructional error, affirmed the remaining convictions (including conspiracy), and remanded for resentencing.


United States v. Blackmon, 839 F.2d 900 (2d Cir. 1988)