Los Angeles Bank Fraud Lawyer

18 U.S.C. § 1344 – Bank Fraud

Bank fraud is defined as violations of the law at a bank or violations of the law by using accounts of a financial institution. Bank fraud ranges from relatively non-complex theft or embezzlement of money by a bank employee to a more complex scheme to defraud based upon false statements, such as the over valuation of property or securities, or false loan applications and misuses of loaned money. With the rise of online banking, internet bank fraud has become more prevalent. 18 U.S.C. Section 1344 makes it a crime to defraud a bank or commit a scheme to defraud regarding the accounts of a financial institution. It provides punishment for whoever knowingly executes, or attempts 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 of or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises. Furthermore, 18 U.S.C. Section 1014 makes it a federal crime to make a false statement to a financial institution. If convicted of bank fraud you may be facing large fines of up to $1,000,000 and/or imprisonment of up to thirty years.

Code Provision and Elements

18 U.S.C. § 1344 contains the federal prohibition on Bank Fraud.  It should be noted, however, that fraudulent conduct targeting federally insured banks or other financial institutions may be covered by separate, more specific, federal statutes.

18 U.S.C. § 1344 provides:

“Whoever knowingly executes, or attempts 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;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”

The financial institutions covered by this statute are those that are federally chartered, or insured by the federal government, such as by the Federal Deposit Insurance Corporation (FDIC).  In practical terms, this includes all major banks and many other bank-like entities.

One common form of Bank Fraud is known as “check kiting.”  This scheme takes advantage of the common banking practice known as a “float,” whereby banks will credit moneys from recently deposited checks to the depositor’s account before the check actually clears.  In a check kiting scheme, the individual writes a check (with insufficient funds backing it) from their account in Bank A.  Before the check clears, the individual writes a second check (also with insufficient funds) to themselves from their account in Bank B to their account in Bank A.  When the first check is cashed, it does not bounce because the float from the second check covers the funds.  The fraud can be repeated through multiple transactions as long as the individual eventually deposits legitimate funds to cover the checks before they clear.

In this check kiting example, the individual could be charged with Bank Fraud because they obtained funds from the financial institution by means of a false representation; i.e. that their account contained sufficient funds to cover the checks they were writing.

Penalties

Bank Fraud under 18 U.S.C. § 1344 is punishable by a maximum of 30 years’ incarceration, a $1,000,000 fine or both.

Defenses

The crime of Bank Fraud under 18 U.S.C. § 1344 is essentially an enhanced penalty law for frauds committed against a certain class of victims – financial institutions.  As such, the defenses your attorney will employ against Bank Fraud charges will be similar to those employed against any fraud allegation.

In general, to prove a fraud, the government must establish that you made a knowingly false statement, that you intended the recipient to rely on the statement, that the recipient did, in fact, rely on the statement, and that in so doing the recipient suffered a financial loss.  Each step in this causal chain can be attacked for insufficient evidence.  It may be possible to show that you did not know the statement made to the financial institution was false.  Alternatively, it could be shown that the financial institution knew from the outset that the statement was false, and therefore they did not rely on it.  In some scenarios, the false statement is believed and relied upon, but the financial institution suffers no financial loss as a result.

Each case will be fact-specific and turn on the particular circumstances at issue in the case.  The best defense strategy to employ in your particular Bank Fraud case will depend on a thorough examination of the government’s evidence.

Contact Us

Bank Fraud allegations are complex and fact-specific.  If you, or someone you know, is under investigation or is being charged with Bank Fraud under 18 U.S.C. § 1344, call our experienced Los Angeles bank fraud attorneys today for a free consultation.  We will help you to protect your rights, and work toward achieving the best possible outcome in your case. Call (877) 781-1570 or fill out online contact form to request free case evaluation today.

Related Information: Money Laundering | Wire Fraud