Applicability of 18 U.S.C. §§ 656 and 657
The purpose of 18 U.S.C. §§ 656 and 657 is to preserve and
protect the assets of banks having a Federal relationship. See
States v. Garrett, 396 F.2d 489 (5th Cir.), cert. denied, 393
(1968). They apply, however, only to a particular class of individuals,
officers, directors, agents, employees or whoever is connected in any
with any of the designated institutions. See United States v.
Cooper, 464 F.2d 648 (10th Cir. 1972), cert. denied, 409 U.S.
(1973). For a more detailed discussion of this issue, see the Fraud
Section, Criminal Division's Manual entitled Financial Institution Fraud
Federal Prosecution Manual (FIF Manual)(1994) at 134-40.|
The term "connected in any capacity" is necessarily broad to
any person who has such a relationship to the institution that he/she could
injure it by committing one or more of the criminal offenses set out in 18
§§ 656 and 657. In the Garrett case, the defendants, who
held to be "connected in any capacity," had purchased a controlling interest
a bank, had exercised control through naming employees and associates to the
board of directors, and were active in the affairs of the bank through
deposits. In United States v. Edick, 432 F.2d 350 (4th Cir. 1970),
defendant was the employee of a corporation that handled the proofing and
bookkeeping for several banks controlled by a holding company. Because of
defendant's position, the defendant was able to divert bank funds. The
defendant's relation to the bank was held to be the same as if the defendant
been a bank employee. Thus, the court held that he was "connected in any
capacity" with the victim banks. Similarly, in United States v.
640 F.2d 1104, 1105 (9th Cir. 1981), the defendant-embezzler was covered
the statute even though she worked for a mortgage company which was a wholly
owned subsidiary of a Federally insured bank.
[cited in USAM 9-40.000]