• Bank fraud is a federal offense that criminalizes fraud upon banks and financial institutions. It is illegal to fraudulently obtain or attempt to obtain the money or assets of a financial institution.
• Bank fraud schemes often involve the use of trickery, falsification, phony documents, alterations of authentic documents, lies, deceit, nonexistent and false identities, false accounts, false names, false social security information, false addresses and false phone numbers to illegally obtain assets.
• Extreme penalties for bank fraud are not uncommon – there is a statutory maximum fine of $1 million and/or 30 years in prison for each count.
Understanding Fraud and Bank Fraud:
• Fraud is a generalized catchall term that basically can be reduced to lying or stealing for personal gain
• Fraud involves the intentional use of deceitful conduct to obtain something of value or benefit from another person, business or institution
• Bank fraud schemes often collapse quickly and result in extremely long periods of incarceration and expensive fines for the perpetrator
• Bank fraud is considered a white collar crime, as opposed to a physical blue collar crime
Federal Bank Fraud - 18 USC 1344:
• Bank fraud is punishable under the federal statute 18 USC Sec. 1344
• Under the statute:
• “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…”
• Faces fines of up to $1 million and/or
• Prison up to 30 years
Bank Fraud May Include:
• Bank fraud may be committed or attempted in various ways, including the following:
• Cyber fraud – the use of computers to commit bank fraud
• Identity theft – using the identity of another without their consent
• Credit card and debit card theft – withdrawing funds from other’s credit and debit cards that the thief has no intention to return
• Check fraud – writing checks that are without funds or using stolen checks; creating fraudulent checks
• Fraudulent loan – often using an accomplice who is employed at the bank, a fraudulent loan is offered to an individual who never intended to pay the money back
• Wire transfer fraud – large sums of money are fraudulently redirected to the conniving recipient
• Money laundering – often used in conjunction with bank fraud, illegally gotten sums are unknowingly laundered in financial institutions by depositing the “dirty” or ill-begotten funds and mixed with legitimate funds until they are indivisible
• Forged documents – used to create the appearance of accounts and funds that never existed
• Cashier’s check fraud – unknowingly depositing a fraudulent check into your account
• Fictitious banking – fictitiously operated banks that are not licensed or chartered in the U.S.
• Numerous other methods
18 USC Sec. 1344 - Bank Fraud
Fraud Resources - U.S. Dept. of the Treasury