United States v. Ashley
In United States v. Keith Todd Ashley, 123 F.4th 403 (5th Cir. 2024), the Fifth Circuit vacated several of the defendant’s convictions and his life sentence for bank theft.
Background After a jury trial, Ashley had been convicted of 17 crimes include mail fraud, wire fraud, Hobbs Act robbery, and bank theft. The evidence showed that Ashley, a licensed financial advisor, had operated a Ponzi scheme and allegedly murdered one of his clients in order to steal the client’s money—the murder was charged in state court in a separate proceeding.
Ashley had convinced four clients to invest in unit investment trusts (“UITs”), which “trusts that hold securities but do not have a guaranteed rate of return.” Once the clients sent funds to Ashley, however, he used the money for all sorts of personal expenses including trips to casinos and his own legal fees.
Ashley was also an insurance agent, and in 2016, he sold a $2 million life insurance policy to a client, with the client’s wife named as the beneficiary. But three years later, the client executed a will and named Ashley the executor and trustee of the client’s trust. With Ashley’s help, the client also changed his life insurance policy to make the trust, instead of his wife, the beneficiary of the policy.
Shortly after that change, Ashley allegedly sedated the client, shot and killed him, then staged the scene to look like a suicide. Two days later, Ashley went to the client’s home, obtained access to the deceased client’s phone, and used an app on the phone to transfer $20,000 out of the client’s bank account to himself.
Holding 1: The evidence was sufficient to convict Ashley of some charges but not others.
First, the court affirmed Ashley’s wire fraud conviction for diverting client funds to pay his own personal expenses.
Second, it vacated his convictions that had been based on transfers Ashley made between his business account and personal account. The fraudulent scheme had been completed once Ashley received the money; transfers after that point were immaterial and did not further his fraud scheme, so they did not support wire fraud convictions.
Third, the evidence did not support convictions for attempting to defraud the life insurance company. The court held that the Government had failed to prove that Ashley engaged in any scheme to defraud the company, which was already contractually obligated to pay out benefits upon the client’s death. The change of beneficiary may have harmed the client’s wife and son, but it did not harm the insurance company. Because the Government had alleged a scheme against the company, the evidence could not support those convictions.
Fourth, the court affirmed the wire fraud conviction for Ashley’s use of the client’s cell phone to transfer funds to himself. At a minimum, Ashley had misrepresented himself to the client’s widow and son in order to gain access to the phone.
Fifth, the court vacated the Hobbs Act robbery charge because Ashley took the client’s funds two days after his alleged murder, while the Hobbs Act requires a taking of money or property “in the presence of” the victim. When Ashley used the deceased client’s phone to transfer money, the client was not in his presence.
Sixth, the court affirmed Ashley’s conviction for bank theft under 18 U.S.C. § 2113(b). That crime requires proof that the defendant took money or property exceeding $1,000 that had been in the care, custody, management, or possession of a bank. Under Fifth Circuit precedent, a person can commit this crime by simply withdrawing funds from a bank pursuant to a scheme to defraud. See United States v. Godfrey, No. 94-20424, 1995 WL 581915, at *3 (5th Cir. 1995) (unpublished).” In Ashley’s case, the court made clear: “neither physical entry into a bank nor the physical taking of money from a bank is a requirement for bank theft under § 2113(b).”
Holding 2: Ashley should not have received a life sentence for bank theft because the evidence did not show that Ashley killed his client “in committing” the bank theft. See 18 U.S.C. § 2113(e). The murder was “a prerequisite to his committing bank theft,” but it did not occur at the same time as the theft.
Holding 3: Vene had been proper in the Eastern District of Texas.
Venue is proper in any district where the offense was committed. Fed. R. Crim. P. 18. To be sure, Ashley alleged murdered his client outside the Eastern District, and he used the client’s phone while outside the district. But the account to which he wired the funds was established and maintained in the Eastern District, and it was associated with Ashley’s business entity that was also located in the district. Independent of that, venue was also proper because the jury heard evidence that Ashley first tried to remotely access the client’s bank account while in the district, and he only traveled to the client’s house when that failed.
Holding 4: The district court did not err by denying Ashley’s motion to continue or his motion to sever newly fired charges, in part because Ashely failed to “articulate how the additional counts prejudiced his defense, such as, for example, by explaining what evidence he would have tried to obtain with more time.”