United States v. Banyan, No. 17-6410 (6th Cir. 2019)
Annotate this CaseIn 2006, Puckett, a Nashville homebuilder, was overloaded with debt. Banyan, a mortgage broker, and Puckett recruited straw buyers to purchase his unsold homes with loans funded by SunTrust and Fifth Third. For a fee (about $10,000), each buyer submitted a loan application that overstated the buyer’s income and falsely stated that the buyer intended to live in the home. None of those misrepresentations reached SunTrust Bank or Fifth Third, nor did either of those parent banks fund any of the loans. Puckett received about $5,000,000 in proceeds and told the buyers he would make their mortgage payments. By late 2007, Puckett could not make all the payments. The mortgage companies foreclosed. The FBI began investigating in 2009. In 2014, the two were convicted of bank fraud, 18 U.S.C. 1344 and conspiracy to commit bank fraud, 18 U.S.C. 1349. The Sixth Circuit reversed. The government could have charged the defendants with mail or wire fraud within the five-year limitations periods but missed that deadline and later charged the two with bank fraud. That offense has a longer limitations period, but the fraud must be perpetrated against a bank—which (as a matter of statutory definition) the mortgage companies were not, because they were not federally insured. Nor did the government make any effort to prove that the loans were funded by the mortgage companies’ parent corporations, which were banks.
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