United States of America v. Scott Repella

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 07-4578
UNITED STATES OF AMERICA
v.
SCOTT REPELLA,
Appellant
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Criminal No. 06-cr-00111)
District Judge: Hon. Richard P. Conaboy
Argued November 17, 2009
BEFORE: SCIRICA, Chief Judge, JORDAN and COWEN, Circuit Judges
(Filed: December 9, 2009)
Theodore B. Smith, III, Esq.
Office of the United States Attorney
228 Walnut Street, P.O. Box 11754
220 Federal Building and Courthouse
Harrisburg, PA 17108
Barbara K. Whitaker, Esq. (Argued)
Office of the United States Attorney
235 North Washington Avenue
P.O. Box 309, Suite 311
Scranton, PA 18503

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Counsel for Appellee
Walter S. Batty, Jr., Esq. (Argued)
101 Columbia Avenue
Swarthmore, PA 19081
Thomas P. Hogan, Jr., Esq.
Lamb McErlane
24 East Market Street
P.O. Box 565
West Chester, PA 19381
Counsel for Appellant
OPINION
COWEN, Circuit Judge
Scott Repella appeals a judgment of conviction for bank fraud (18 U.S.C. § 1344)
on the ground that his plea was taken in violation of Rule 11 of the Federal Rules of
Criminal Procedure. We will vacate the conviction for bank fraud and remand for further
proceedings.
I. BACKGROUND
Repella was indicted for one count of bank fraud under 18 U.S.C. § 1344 (Count
One) and one count of wire fraud under 18 U.S.C. §1341 (Count Two). Repella pleaded
guilty to both counts. He now asserts that his plea to bank fraud was invalid as it was not
a knowing plea. Repella contends that the evidence in the record, consisting of the
indictment, the plea colloquy transcript, and the pre-sentence report, is insufficient to

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establish bank fraud as the government failed to establish that he had the intent to defraud
a bank.
Count One of the indictment states that:
From in or about October, 2003 and continuing to in or about
December, 2004, in the Middle [District] of Pennsylvania,
SCOTT REPELLA willfully and knowingly executed and
attempted to execute a scheme to defraud financial institutions
whose deposits were insured by the Federal Deposit Insurance
Corporation and to obtain money from those institutions by
means of false and fraudulent representations. It was part of
the scheme to defraud that Repella would make on-line check
purchases of computers and related items from Gateway
Computers, Staples and Dell Computers. For each purpose he
provided bank information (the ABA/routing number,
checking account number and check number) to the retailer
on-line. Repella falsely used invalid routing numbers
assigned to Citizens Savings Bank and the Wilkes Barre VA
Employees Credit Union. However, before the account
information was determined to be fraudulent, Repella caused
the on-line retailers to ship merchandise, totaling in excess of
$20,000.00 to him at various addresses within the Middle
District of Pennsylvania.
(App. 25.)
During the plea colloquy, Repella stated very little with respect to the bank fraud
charge. He indicated that he agreed to plead guilty “[b]ecause [he] defrauded these
companies.” (App. 61.) It is unclear whether Repella was referring to the banks listed in
Court One or to the computer retailers that he targeted. The government’s proffer did not
include any statements regarding Repella’s intent, nor did the pre-sentence investigation
report (“PSR”).

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II. STANDARD OF REVIEW
A challenge to the sufficiency of the factual basis of a guilty plea, raised for the
first time on appeal, is reviewed for plain error. See United States v. Corso, 549 F.3d
921, 928-29 (3d Cir. 2008). The appellant must demonstrate “(1) that there was an error,
i.e., a deviation from a legal rule, (2) that the error was ‘plain,’ i.e., clear or obvious, and
(3) that the error affected his substantial rights.” Corso, 549 F.3d at 928 (citing Johnson
v. United States, 520 U.S. 461, 467 (1997)). Finally, this court “will exercise our
discretion to correct the unpreserved error only if [the appellant] persuades us that (4) a
miscarriage of justice would otherwise result, that is, if the error seriously affect[ed] the
fairness, integrity or public reputation of judicial proceedings.” Id. at 929 (internal
quotation marks omitted).
III. DISCUSSION
A guilty plea must be made “voluntarily, knowingly, and intelligently, with
sufficient awareness of the relevant circumstances and likely consequences.” E.g., United
States v. Lessner, 498 F.3d 185, 192 (3d Cir. 2007) (quoting Bradshaw v. Stumpf, 545
U.S. 175, 183 (2005)) (internal quotation marks omitted). “Rule 11 of the Federal Rules
of Criminal Procedure sets forth the standards governing the acceptance of guilty pleas.”
Lessner, 545 F.3d at 193. “A district court may not accept a plea of guilty without first
personally addressing the defendant, under oath and in open court, and ascertaining that
the plea is voluntary.” Id. (citing Fed. R. Crim. P. 11(b)(1), (2)). Additionally, “[t]he

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court must also ascertain that the defendant understands the rights that he or she is
waiving by pleading guilty, and that there is a factual basis for the plea.” Id. (citing Fed.
R. Crim. P. 11(b)(1), (3)). “The court may make that inquiry by looking to the
defendant’s own admissions, the government’s proffer of evidence, the presentence
report, or whatever means is appropriate in a specific case—so long as the factual basis is
put on the record.” United States v. Cefaratti, 221 F.3d 502, 509 (3d Cir. 2000). “A
variance from the requirements of this rule is harmless error if it does not affect
substantial rights.” Fed. R. Crim. P. 11(h).
Under § 1344, it is unlawful to “knowingly execute[], or attempt[] to execute, a
scheme or artifice -- (1) to defraud a financial institution; or (2) to obtain any of the
moneys, funds, credits, assets, securities, or other property owned by, or under the
custody or control of, a financial institution, by means of false or fraudulent pretenses,
representations, or promises . . . .” 18 U.S.C. § 1344. “Bank fraud may involve a scheme
to take a bank’s own funds, or it may involve a scheme to take funds merely in a bank’s
custody.” United States v. Thomas, 315 F.3d 190, 197 (3d Cir. 2002). It is well-settled
that the government must establish that a perpetrator who targets non-bank entities had an
intent to harm a bank by exposing a bank to loss or liability. See United States v. Leahy,
445 F.3d 634, 647 (3d Cir. 2006) (noting that “where the perpetrator had an intent to
victimize the bank by exposing it to loss or liability, such conduct falls comfortably
within the reach of § 1344; however, where there is no evidence that the perpetrator had

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an intent to victimize the bank, Thomas makes clear that merely an intent to victimize
some third party does not render the conduct actionable under § 1344”).
The government failed to establish bank fraud as there is no evidence of Repella’s
“intent to defraud a bank” in the indictment, plea-colloquy transcript or the PSR.
Repella’s admission that he “defrauded these companies” does not indicate whether he
was referring to the online retailers or the banks. The government failed to clarify this
ambiguity at the plea colloquy and in the PSR.
The government argues that Repella intended to harm banks by putting them at
risk for losses because if the online retailers sought payment from the banks and the
banks paid the retailers from the fictitious accounts, the banks would forfeit those funds
with no recourse. This speculation is insufficient to establish the requisite intent. Banks
have no legal obligation to pay third-parties for charges incurred on non-existent accounts
and it is unreasonable to assume that any of the banks at issue had policies requiring such
payments. The government makes much of the purchase made using Repella’s account at
the VA Federal Credit Union as he provided correct account information for an account
with insufficient funds. First, there is no evidence that he knew that the account had
insufficient funds. More importantly, if we were to embrace this theory of bank fraud,
each time someone made a purchase with a check from an account for which there was

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At oral argument, the government directed our attention to United States v.1
Schwartz, 899 F.2d 243, 247 (3d Cir. 1990) for the broad proposition that passing a check
on an account with insufficient funds constituted bank fraud. The government
misinterpreted this case. Schwartz involved check-kiting, which is a direct assault on the
deposits of a bank. Our case involves a scheme that targeted non-bank entities.
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insufficient funds, the government could indict for bank fraud. Congress did not1
contemplate such indictments.
The government also argues that had Repella proceeded to trial, it would have
established his intent through his modus operandi. The government asserted that:
[I]t was Repella’s method of operation to identify accounts,
transposing numbers and berating bank personnel, blaming
them for the error and threatening legal action. Citizens
Bank, like FNCB involved in his scheme in Count 2 of the
Indictment, may have attempted to accommodate Repella in
the name of customer relations and hoping for repayment.
Repella, however, elected not to go to trial, where his course
of conduct would be evidence of his intent to defraud.
(Gov’t Br. at 17.) Additionally, the government asserted that this “has been his federal
criminal history since 2001.” (Gov’t Br. at 18.)
These assertions, raised for the first time on appeal, are not supported by the
record, and as such, cannot be considered when evaluating Repella’s intent. A review of
Repella’s PSR indicates that he does not have any prior bank fraud convictions on his
record. His criminal history indicates an extensive history of passing bad checks in
exchange for goods and services; however, the intent to defraud a bank in this case cannot
be inferred from that conduct.

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There is an insufficient factual basis to support Repella’s conviction for bank
fraud. Moreover, Repella is able to satisfy the remaining requirements of plain-error
review. This circuit has held that an unsupported conviction which provided the basis for
a sentence must be vacated under plain-error review, even if the defendant is serving a
concurrent sentence. See United States v. Tann, 577 F.3d 533, 542-43 (3d Cir. 2009)
(vacating a conviction for plain error).
V. CONCLUSION
We will vacate the judgment of conviction for bank fraud and remand for further
proceedings.

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