Banks and other financial institutions are heavily regulated by the U.S. government. Defrauding a bank or financial institution is a serious federal offense with significant potential consequences. Federal bank fraud cases are prosecuted under 18 U.S.C. 1344, which states that any individual who –
- Executed or attempted to execute a scheme, substantially as charged in the indictment, to defraud a financial institution [or to obtain a financial institution’s money by means of false or fraudulent pretenses]; and
- Knowingly and willfully participated in this scheme with the intent to defraud [or to obtain money by means of false or fraudulent pretenses]; and
- The financial institution was federally insured, a federal reserve bank or a member of the Federal Reserve System –
can be held criminally responsible for bank fraud.
Since bank fraud cases are criminal and not civil, the government must prove all the above elements beyond a reasonable doubt. If the government can prove all the requisite elements for bank fraud, the punishment can be severe. Under the bank fraud statute, convictions for bank fraud carry a potential prison sentence of up to 30 years and a potential fine of up to one million dollars.
A common form of bank fraud is when an individual or entity lies on a loan application to secure a loan they otherwise would be ineligible for. Banks and financial institutions have strict requirements for issuing loans and other forms of credit. When an individual or entity applies for a loan, they must certify that the bank’s requirements are met. Even if a bank catches the fraud before a loan is dispersed, this fictitious loan application filing can still be construed as fraud. It is important to note that the bank or financial institution does not need to suffer actual harm in order for an individual to be convicted of bank fraud. According to the statute, the bank or financial institution need only be put under the threat of suffering harm.
In addition to loan application fraud, below are other schemes that are prosecuted for bank fraud:
- Using counterfeit financial documents that you know are counterfeit
- Using fake appraisal documents in a financial transaction
- Forging an individual’s name on a check
- Altering a check’s amount and subsequently attempting to cash or deposit this altered check
- Altering a financial document without express consent of the issuer
If you are under investigation for bank fraud, there are several ways to be put on notice of such an investigation. A federal agent could come to your home and ask to speak with you. You could receive a target letter from the U.S. Attorney’s Office stating you are the target of a bank fraud investigation. You could also receive a request for documents, such as a Grand Jury Subpoena issued by the government. Regardless of how you discover you are facing potential bank fraud charges, it is imperative you speak with an experienced federal defense attorney to mitigate exposure you might have.
Recent Bank Fraud Cases Prosecuted by DOJ:
- A former bank executive in Kansas was found guilty of multiple counts of bank fraud by a federal jury. According to evidence presented at trial, the bank executive used his position at his bank to approve numerous fraudulent loans. The former executive approved these loans because the loan proceeds were going toward funding other businesses the executive owned. In total, the former executive defrauded his bank out of $15 million by way of these loans. Due to his conviction, the former executive faces a potential prison sentence of up to 30 years.
- A man in Maryland was sentenced to spend 33 months in prison after he pleaded guilty to bank fraud. According to plea documents, the man attempted to obtain numerous loans based on falsified information. The man told several individuals that he had inside connections to a bank in Maryland and could secure loans with reduced interest rates. The man had the individuals pay him a “finders fee” and in turn, he would apply for loans on their behalf. The man submitted loan applications for the individuals to the bank using false information. The bank discovered the fraud before any loans were dispersed, however, the man was still charged and eventually convicted of bank fraud.
- A man in Texas pleaded guilty for his role in a bank fraud scheme. According to plea documents, the man solicited buyers of fake bank documents for which he sold at a premium. The bank documents sold by the man were intended to help the buyers obtain favorable lines of credit from various banks in Texas. Some of the buyers presented these fraudulent documents to banks, however, the banks realized the documents were fake and did not issue any lines of credit. The Texas man attempted to flee the United States after being put under investigation but was eventually caught and charged with bank fraud.
Oberheiden P.C. Can Defend Charges for Bank Fraud
If you are being investigated for bank fraud, reach out to the attorneys of Oberheiden P.C. today.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.