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Obstruct Examination

18 U.S.C. § 1517 - Obstructing Examination of a Financial Institution

In the United States, government agencies regularly examine financial institutions to ensure their financial records are accurate and comply with federal regulations.

These examinations are necessary to preserve the integrity of our financial system. For this reason, corruptly interfering or attempting to interfere with one of these examinations is a serious federal crime under 18 U.S.C. 1517. If you are charged with this crime and convicted, you could face up to five years in federal prison.

18 U.S.C. § 1517 - Obstructing Examination of a Financial Institution
18 U.S.C. 1517 makes it a federal crime to obstruct an examination of a financial institution.

While a person may commit many federal crimes, obstruction of justice is one of the more common crimes because it can take on many different forms. The crime of obstruction is primarily covered under Title 18 of the U.S.C. Chapter 73.

While obstruction of justice crimes come in many forms, some violations are more common than others. This federal statute has some key provisions.

For example, a related law, 18 U.S. Code 1516 obstruction of federal audit says, "(a) Whoever, with intent to deceive or defraud the United States, endeavors to influence, obstruct, or impede a Federal auditor in the performance of official duties relating to a person, entity, or program receiving more than $100,000, directly or indirectly, from the United States in any one year under a contract or subcontract, grant, or cooperative agreement, or relating to any property that is security for a mortgage note that is insured, guaranteed, acquired, or held by the Secretary of Housing and Urban Development under any Act administered by the Secretary, or relating to any property that is security for a loan that is made or guaranteed under title V of the Housing Act of 1949, shall be fined under this title, or imprisoned not more than five years, or both."

What Does the Law Say?

18 U.S.C. 1517 makes it illegal to obstruct or attempt to obstruct any examination of a financial institution by an agency of the United States. The statute reads:

"Whoever corruptly obstructs or attempts to obstruct any examination of a financial institution by an agency of the United States with intent to deceive or defraud any agency of the United States or any officer, auditor, or examiner thereof shall be fined under this title, imprisoned not more than five years, or both."

This law applies to all financial institutions, including banks, credit unions, and savings associations. The objective is to maintain the economic system's integrity by ensuring that regulatory examinations are conducted without interference.

What Factors Must Be Proven to Convict?

To secure a conviction under 18 U.S.C. 1517, the prosecution must prove the following elements of the crime beyond a reasonable doubt:

  • Corrupt Intent: You acted with corrupt intent, knowingly and intentionally attempting to obstruct the examination. This includes acts intended to deceive or defraud the regulatory agency.
  • Action Taken: There must be a clear act that obstructed or attempted to obstruct the examination. This could involve destroying documents, providing false information, or intimidating witnesses.
  • Regulatory Examination: The obstruction relates to a federal agency's official examination of a financial institution, including audits, investigations, and other regulatory activities.
  • Jurisdiction: The examination being obstructed must be conducted by an agency in the United States with the legal authority to examine the financial institution.

What are Some Examples?

EXAMPLE 1: A bank manager, John, learns that a federal examiner will review the bank's loan portfolio. He knows that several loans are non-compliant with federal regulations. John instructs employees to alter loan documents to make them appear compliant to avoid detection. John can be charged with violating 18 U.S.C. 1517 and possibly other offenses.

EXAMPLE 2: Terri is a compliance officer at a credit union. She receives a request from a federal auditor for certain financial records. Believing that the records will reveal regulatory violations, Terri deliberately delays the release of the documents and provides incomplete information, hoping to avoid scrutiny. This deliberate withholding of information to obstruct the examination process violates 18 U.S.C. 1517.

What are Related Federal Laws?

18 U.S. Code Chapter 73 Obstruction of Justice has several federal laws that are related to 18 U.S. Code 1517 obstructing examination of a financial institution, including:

  • 18 U.S.C. 1501 - Assault on a process server.
  • 18 U.S.C. 1502 - Resistance to extradition agent.
  • 18 U.S.C. 1503 - Influencing or injuring officer or juror generally.
  • 18 U.S.C. 1504 - Influencing juror by writing.
  • 18 U.S.C. 1505 - Obstruction of proceedings before departments, agencies, and committees.
  • 18 U.S.C. 1506 - Theft or alteration of record or process; false bail.
  • 18 U.S.C. 1507 - Picketing or parading.
  • 18 U.S.C. 1508 - Recording, listening to, or observing grand or petit jury proceedings while deliberating or voting.
  • 18 U.S.C. 1509 - Obstruction of court orders.
  • 18 U.S.C. 1510 - Obstruction of criminal investigations.
  • 18 U.S.C. 1511 - Obstruction of state or local law enforcement.
  • 18 U.S.C. 1512 - Tampering with a witness, victim, or an informant.
  • 18 U.S.C. 1513 - Retaliating against a witness, victim, or an informant.
  • 18 U.S.C. 1514 - Civil action to restrain harassment of a victim or witness.
  • 18 U.S.C. 1514A - Civil action to protect against retaliation in fraud cases.
  • 18 U.S.C. 1515 - Definitions for certain provisions; general provision.
  • 18 U.S.C. 1516 - Obstruction of federal audit.
  • 18 U.S.C. 1518 - Obstruction of health care criminal investigations.
  • 18 U.S.C. 1519 - Destruction, alteration, or falsification of records in Federal investigations and bankruptcy.
  • 18 U.S.C. 1520 - Destruction of corporate audit records.
  • 18 U.S.C. 1521 - Retaliating against a Federal judge or law enforcement officer by false claim or slander of title.

What are the Penalties for Violating U.S.C. 1517?

The penalties for obstructing the examination of a financial institution can be severe. A person convicted under this statute may face:

  • Fines of up to $250,000 and
  • Up to five years in federal prison.

What are the Common Defense Strategies?

If you are accused of obstructing the examination of a financial institution, there may be several defense strategies that a federal criminal defense attorney might employ. These include:

  • Lack of Intent: One of the critical elements the prosecution must prove is corrupt intent. A defense strategy may involve demonstrating that you did not intend to deceive or defraud the regulatory agency. For example, if documents were destroyed as part of a routine cleanup process without knowledge of the impending examination, this could negate the element of corrupt intent.
  • Mistake or Misunderstanding: Sometimes, actions perceived as obstructive may result from a genuine mistake or misunderstanding of regulatory requirements. Demonstrating that your actions were not intentional but the result of confusion can be a viable defense.
  • Duress or Coercion: If you were forced or coerced into obstructive actions by someone else, this can serve as a defense. Evidence of threats or pressure from another party can be used to argue that the defendant did not act willingly or with corrupt intent.
  • Procedural Defenses: The defense can also explore whether proper procedures were followed during the investigation and examination. Any deviations or violations of your rights during the process can be grounds for challenging the charges or suppressing evidence.

For more information, contact Eisner Gorin LLP, a federal criminal defense law firm with offices in Los Angeles, California.

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