Unpublished Disposition, 940 F.2d 669 (9th Cir. 1988)

MEMORANDUM^** 

Appellant Chieko Okuda was convicted of one count of credit card fraud and one count of bank fraud, pursuant to 18 U.S.C. §§ 1029(a) (2) & 1344. Appellant Leonida Ong was convicted of two counts of credit card fraud, also pursuant to 18 U.S.C. § 1029(a) (2). They appeal, with appellant Ong joining in the relevant portions of appellant Okuda's brief.

Both appellants claim that the credit card fraud statute under which they were convicted, 18 U.S.C. § 1029(a) (2), does not apply to their conduct. The conduct underlying appellants' convictions was the use of a credit card issued in Ong's name. Ong was not the primary cardholder, but had obtained a card on the account of her brother's girlfriend. Ong and Okuda used the card to obtain unauthorized cash advances by creating false sales drafts, and Ong also used the card on her own to incur charges at various Guam merchants. Appellants maintain that the credit card was not an "unauthorized access device" within the meaning of the statute because Ong originally obtained the card lawfully.

We must reject this contention. Section 1029(a) (2) prohibits the knowing use of an "unauthorized access device" with intent to defraud; section 1029(e) (3) defines "unauthorized access device" as "any access device that is lost, stolen, expired, revoked, canceled, or obtained with intent to defraud." The primary cardholder canceled Ong's card on December 12, 1988, and notified Ong's family of the cancellation. After cancellation, the card became an "unauthorized access device" as defined by the statute.

Appellants also contend that there was insufficient evidence to show that appellants knew the card had been canceled. This contention lacks merit. The evidence showed not only that Ong's family was notified of the cancellation, but also that Ong systematically kept charges below the floor limit to avoid authorization checks that would detect the cancellation.

Moreover, there was evidence sufficient for the jury to infer that Ong obtained the credit card from the primary cardholder with the intent to defraud, and that it was an "unauthorized access device" for that reason as well.

Okuda appeals from her conviction for bank fraud on similar grounds, contending that the statute does not reach the use of a legally-obtained card. The statute under which she was convicted, 18 U.S.C. § 1344, expressly contemplates prosecution for conduct intended "to defraud a financial institution." Appellants' scheme of submitting false sales drafts to banks falls squarely within the purview of the statute. Okuda relies upon a passage in the legislative history explaining an intent by Congress to exclude punishment for a single misuse by the cardholder of an expired card. See S.Rep.No. 368, 98th Cong., 2nd Sess. 11, reprinted in 1984 U.S.Code Cong. & Admin.News 3647, 3657. Appellant's conduct was shown to have been a fraudulent scheme, not such incidental misuse, and hence is clearly covered by the statute.

AFFIRMED.