18 U.S.C. § 1344 - Federal Bank Fraud
Bank fraud under 18 U.S. Code 1344 is a serious offense that can include theft or embezzlement of money by a bank employee or a scheme to defraud, like improper evaluation of property, false loan application, or unlawful use of loaned money.
Put simply, this federal law is a shield that bars bank fraud. It safeguards federally insured financial institutions from schemes to obtain money, assets, or other property through false pretenses.
The statute broadly covers a variety of fraudulent activities, including check and credit card fraud, identity theft, mortgage fraud, misrepresentation of a bank's financial status, and unauthorized access to a bank's systems.
A conviction for bank fraud can lead to severe consequences, including hefty fines of up to $1,000,000, a maximum of 30 years in the Federal Bureau of Prisons, or both.
Typically, those charged with bank fraud include bank officers and executives who allow false representations to be made and anyone who defrauds a federally insured financial institution.
Sometimes, a defendant might be able to argue they made a mistake or misstatement or that they lacked intent.
18 U.S. Code 1344 bank fraud says, "Whoever knowingly executes, or attempts to execute, a scheme or artifice-
(1) to defraud a financial institution; or
(2) to obtain any of the money, 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."
In other words, It's a federal crime to defraud a bank or participate in a scheme to defraud any financial institution's accounts.
Bank Fraud - Quick Facts
- Bank fraud is a common crime, especially with the increase of financial transactions online in a modern economy.
- Bank auditors examine records looking for fraud. If they discover evidence, they will refer the case to federal prosecutors for a possible indictment.
- Related 18 U.S.C. 1014 makes it a federal crime to submit false statements to a financial institution.
- In the context of this crime, "fraud" refers to a deliberate false statement made with the intention of causing someone to rely on it to their detriment.
- The federal jury instructions say that fraud is mainly a crime of intent and a scheme or artifice that was not done by mistake.
- A perpetrator must know of the false statements causing a loss in a bank transaction to be charged with bank fraud.
- The financial institutions covered under this federal statute are those that are federally chartered or insured by the federal government, such as the Federal Deposit Insurance Corporation (FDIC).
- This federal bank fraud law applies to the over 4,000 federally chartered banks and financial institutions federally insured.
- State-chartered banks and credit unions have the same anti-fraud protection as federally chartered banks.
- The United States Department of Justice (DOJ) says that the federal bank fraud statute is closely related to more specific anti-fraud laws designed to protect banks.
Examples of Federal Bank Fraud
Notably, fraud can occur in many ways. Some of the most common examples of federal bank fraud under 18 U.S.C. 1344 include the following deliberate acts:
- Making false financial statements to obtain a loan.
- Omit debts, defaults, or bankruptcy off of a loan application.
- Using a fictitious name to conceal credit history.
- Over-state income on a loan application.
- Identity theft for financial gain.
- Stealing credit card numbers to commit fraud.
- Withdraw funds with a forged signature or altered payee.
- Fraudulent withdrawal of funds from a bank account.
What are the Related Federal Laws?
18 U.S. Code Chapter 63, mail fraud and other fraud offenses, has numerous related federal laws, including the following:
- 18 U.S.C. 1341 - Frauds and swindles.
- 18 U.S.C. 1342 - Fictitious name or address.
- 18 U.S.C. 1343 - Fraud by wire, radio, or television.
- 18 U.S.C. 1344 - Bank fraud.
- 18 U.S.C. 1345 - Injunctions against fraud.
- 18 U.S.C. 1346 - Definition of scheme or artifice to defraud.
- 18 U.S.C. 1347 - Health care fraud.
- 18 U.S.C. 1348 - Securities and commodities fraud.
- 18 U.S.C. 1349 - Attempt and conspiracy.
- 18 U.S.C. 1350 - Failure of corporate officers to certify financial reports.
- 18 U.S.C. 1351 - Fraud in foreign labor contracting.
- 18 U.S.C. 1352 - Demands by foreign officials for bribes.
Notably, it's common for someone accused of bank fraud to be indicted on multiple charges under different laws.
What are the Defenses Against Bank Fraud Charges?
Suppose you are under investigation for bank fraud. In that case, do not make any statements to federal agents that are trying to gather evidence against you.
You have a Fifth Amendment privilege against self-incrimination. You also have a Sixth Amendment right to counsel.
Federal prosecutors must prove every element of the crime beyond a reasonable doubt to obtain a conviction. Fraud-related charges are often challenging to prove because they involve a defendant's guilty state of mind.
Perhaps we can argue that you simply made a mistake in dealing with the bank, such as misstating information that made it appear your financial condition looked better than it is. In other words, an error is not the same as an intentional act.
Sometimes, people innocently leave information off of financial documents, alter documents prepared by others, or complete documents left incomplete by others.
In other words, these acts are not evidence of deception and fraud, even if they were for your financial benefit. We might argue that your conduct was not deliberately deceptive.
Our experienced federal criminal defense lawyers will target the crucial factors for a bank fraud conviction in an attempt to cast reasonable doubt. As noted, federal bank fraud is a serious offense with massive penalties and time in federal prison.
We know how to protect you, enforce your constitutional rights, and challenge unfounded charges. If guilt is not in doubt, we might be able to negotiate with the prosecutor for a favorable outcome but are prepared to take the case to trial.
Remember, Cron, Israels & Stark are here to help. We are a Los Angeles-based criminal defense law firm, and we offer a free case evaluation. Don't face bank fraud charges alone.
Related Content: