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Bank Fraud

Federal Bank Fraud Defense Lawyer

18 U.S.C. § 1344 – Bank Fraud

Bank fraud is defined as violations of the law at a bank  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 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 penalties for anyone who knowingly executes a scheme to defraud a financial institution, obtain money, securities, or property that is owned by a financial institution using false pretenses. Furthermore, 18 U.S.C. Section 1014 criminalizes the act of making false statements 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.

Federal Code Provision for Bank Fraud

18 U.S.C. § 1344 describes a federal bank fraud offense. 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 states that anyone who knowingly executes a scheme in order to defraud a financial institution to obtain money or property from a financial institution using fraudulent representations, will face imprisonment and fines.

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).  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.

18 U.S.C. 225 defines the crime of continuing financial crimes enterprise (CFCE). 18 U.S. Code 1346 defines the related crime of honest services fraud.

Defenses for Federal Bank Fraud

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.

Retain a Federal Criminal Lawyer

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 federal crime defense lawyers for a 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 a case evaluation today.

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