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Bank Fraud Cases & Punishment


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 What Is Bank Fraud?

Bank Fraud is a white collar federal crime that involves the defrauding or attempt to defraud a financial institution of money, assets, credit or securities by means of false or fraudulent pretenses. Filling out fraudulent loan documents, credit card applications, and writing bad checks could also be charged as bank fraud long with other criminal statutes.

Protected financial institutions are those charted in the U.S. and insured by the FDIC, National Credit Union Association and federally backed mortgage loan organizations.

18 USC 1344 – Bank Fraud Statute

The laws pertaining to Bank Fraud are outlined in 18 United States Code § 1344, which specifically prohibits the defrauding of financial institutions of money, securities or property and is intended to apply to check-kiting cases as well.

In the case of multiple defendants, can also be charged as a conspiracy pursuant to 18 U.S.C. 1349 if it can be proven that others participated in a manner that furthered the crime.

Bank Fraud Related Crimes

Due to the complexities of a bank fraud charge, many federal laws could have been violated during the course of the crime resulting in additional fraud charges or criminal counts as follows:

18 U.S.C. 645 – Embezzlement

18 U.S.C. 343 – Wire Fraud

18 U.S.C. 1341 – Mail Fraud

18 U.S.C. 1028 – ID Theft 

18 U.S.C. 1956 – Money Laundering

26 U.S.C. 7201 – Tax Fraud

Bank Fraud Charges and Cases

Bank Fraud charges also known as Indictments are filed in Federal Court against defendants by Federal Prosecutors called Assistant U.S. Attorneys who work for the U.S. Department of Justice.

The actual investigation of crimes leading to charges being filed is done by Special Agents of the FBI and U.S. Secret Service who have concurrent jurisdiction in fraud investigations and other financial crimes.

Several illegal acts relating to financial crime can trigger investigations by federal law enforcement such as:

  • Use of false identities to facilitate loans;
  • Depositing stolen checks, forging checks;
  • Obtaining financing for fraudulent construction projects;
  • Manipulation of funds at financial institution to mask loan losses;
  • Check kiting – writing checks between two accounts with insufficient funds
  • Forgery when a check is altered by changing a name, amount or signature;
  • Submitting fraudulent loan or financial documents containing misrepresentations;
  • Creating a fraudulent financial institution to lure people into depositing funds.

Bank Fraud Punishment and Penalties

Defendants found guilty by plea agreement or loss at trial for violation of the Title 18 Section 1344 of the United States Code, are subject to the Bank Fraud sentencing guidelines to determine their sentence.

Penalties for bank fraud can include monetary restitution to victims, fines payable to the U.S. Government, as well as harsh sentence to Federal Prison.

According to the Federal Bank Fraud Statute, the maximum penalty a defendant can receive is 30 years and a 1 million dollar fine, with average sentence being 3 to 7 years depending on the specifics of the specific of the case.

Bank Fraud Sentencing Guidelines

At sentencing for a bank fraud charge, Judges use U.S. Sentencing Guidelines section 2B1.1 under Basic Economic Offenses as their guide to establish the Offense Level used to determine the length of a sentence. The base Guideline Offense Level for a Bank Fraud charge could be 6 or 7, along with enhancements for dollar loss and circumstances involved in the crime.

A defendant’s criminal history is also taken into account. Each offense level relates to a certain amount of months added to the sentence.

Pursuant to the U.S. Sentencing Guidelines, a dollar loss chart entitled Specific Offense Characteristics lists offense enhancements. Crimes involving theft, embezzlement, fraud or deceit with a $6,500 loss adds 2 levels, up to a $550,000,000 loss adding 30 levels to the base offense level.

Additional level enhancements are also added for multiple victims and various other facets of Bank Fraud crimes.