A federal appeals court has upheld the conviction of a Salt Lake man who managed to negotiate one of those "non-negotiable" checks that show up in junk mail.
Joseph W. Bernards, also known as Ricky Cove, was found guilty in April of depositing a $42,800 promotional coupon in his savings account and then cashing out more than $38,000 in three days.According to court records, Bernards was experiencing serious financial difficulties in July 1997. He had defaulted on a car loan, his checking account had been closed and his savings account was down to $5.89.
Then he received a mortgage company's promotional letter containing a check-like coupon representing the amount of money that might be available to him if he applied for a home equity loan.
After blacking out the phrases "This is not a check" and "Non-negotiable coupon" with a felt marker, Bernards attempted to deposit the check at the drive-up window at the Sugarhouse branch of Zions Bank. A teller refused to accept the coupon, telling Bernards it was no good.
Bernards then took the phony check to another branch, which deposited $42,800 to his account. Appeals judges noted that the incident occurred on a particularly hectic Friday following the July 24th holiday.
Seven minutes later, according to evidence presented at the trial, Bernards withdrew $500 from an ATM several blocks away. Over the weekend, he withdrew another $1,000 from ATMs. On Monday, he paid off his $9,000 car loan and withdrew another $9,000 in cash, followed by another $500 withdrawal from an ATM. He then went to another bank branch and withdrew another $9,000. Just before closing time, he went to yet another branch and got $9,500 in cash.
The next day, bank officials became concerned about the flurry of activity in Bernards' account -- which then showed a balance of $4,300 -- and launched an investigation. It determined it had lost $38,503. On Nov. 12, 1997, he was charged with bank fraud, or knowingly executing a scheme or artifice to defraud a financial institution.
A jury found him guilty in January. In April, U.S. District Judge Dale Kimball sentenced him to four months in prison and ordered him to pay $38,039 in restitution. Bernards appealed, arguing that a single deceptive act -- the depositing of the non-negotiable coupon -- doesn't constitute a scheme or artifice to defraud.
But a three-judge panel of the 10th Circuit Court of Appeals in Denver disagreed. In an opinion released on Tuesday, Judge Stephen H. Anderson called Bernards' characterization of his conduct "facile," akin to passing a single bad check.
"Based on the uncontroverted evidence, a reasonable juror could have found that Bernards intentionally engaged in a course of conduct designed to defraud Zions and to obtain money and property to which he was not entitled," Anderson said.
Jurors could reasonably conclude that Bernards' Friday lunch hour deposit of the worthless coupon was "merely the first step in the scheme's execution," the judges said.