Newspaper article THE JOURNAL RECORD

Judge Clarifies Fraud Definition for Penn Square Bank Suit Jury

Newspaper article THE JOURNAL RECORD

Judge Clarifies Fraud Definition for Penn Square Bank Suit Jury

Article excerpt

The legal definition of fraud was further clarified Thursday for the jury in the Penn Square Bank civil trial by supplemental instructions written by U.S. District Judge Wayne Alley.

The jury will resume its deliberations today on fraud claims against First United Fund, a Garden City, N.Y., money broker.

First United Fund is accused of fraudulently misrepresenting its services and the financial soundness of Penn Square Bank of Oklahoma City to three former clients.

The plaintiffs are three out-of-state credit unions, which had used the New York broker to buy $7 million worth of jumbo certificates of deposit in Penn Square Bank in the three months before the bank failed on July 5, 1982.

"Generally, fraud consists of a false statement of a material fact made with the intent to deceive the other," Alley said. "When the other believes the false statement is true, justifiably relies on it, and suffers loss because of it, he is entitled to damages because of fraud."

If the jury cannot unanimously reach verdicts on the fraud issue by the close of business hours today, it is expected that Alley would declare it to be a "hung jury" and order the case to be retried.

Alley issued the additional instructions after jurors sent him a note Thursday indicating they were confused about some aspects of the legal definition of fraud.

Punitive damages, which can only be awarded if fraud is found, have been requested by all three plaintiffs: Downriver Community Federal Credit Union of Ecorse, Mich.; Bolling Federal Credit Union of Washington, D.C., and Pinellas County Teachers Credit Union of Largo, Fla.

Downriver already has been awarded the maximum actual damages it can recover from First United Fund by the two liability verdicts for negligence, which the jury issued Wednesday in Downriver's favor. …

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