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Federal Bank Fraud Crimes


In simple words, bank fraud is a type of white-collar crime that involves using deception to obtain property, including money from a financial institution. Like other fraud crimes, federal bank fraud crimes involve the use of a “scheme or artifice” to defraud. The scope of the phrase “scheme or artifice” is quite broad, and because of this, federal prosecutors use the federal bank fraud statute, 18 U.S. Code Section 1344, quite a lot. Federal prosecutors also use the federal bank fraud statute quite a lot because of the harsh penalties prescribed under the statute.

18 U.S. Code Section 1344 – Bank Fraud

The federal bank fraud statute provides a simple-to-understand definition of bank fraud. According to 18 U.S. Code § 1344, it is a federal crime for any person to attempt to execute or knowingly execute a plan;

  1. to obtain any property owned by or under the control or custody of a financial institution or
  2. to defraud a financial institution,

by means of false representations.

As already mentioned, the scope of the phrase “scheme or artifice” is quite broad. Common forms of schemes include;

  • Check kiting
  • Credit card fraud
  • Embezzlement
  • Check forging
  • Identity theft
  • Falsifying information
  • False loan applications

On the other hand, according to 18 U.S. Code Section 20, financial institutions include, among others;

  • Banks or insured depository institutions of the Federal Deposit Insurance Act
  • Federal Reserve Banks
  • Credit unions with accounts insured by the National Credit Union Share Insurance Fund
  • Mortgage lending businesses
  • Branches or agencies of foreign banks

Penalties of Bank Fraud

According to 18 U.S. Code 1344, any person convicted of bank fraud shall be fined not more than $1 million, imprisoned not more than 30 years, or both.

Potential Defenses to Bank Fraud

There are several possible defenses to federal bank fraud charges. One of the defenses is “lack of intent.” This is the most commonly used defense to bank fraud. As you can note from the federal bank fraud statute, a person cannot be convicted of bank fraud if they did not act “knowingly/intentionally.” If, for instance, you deposited a fraudulent check in a bank, but you didn’t know that the check was fraudulent at the time you were making the deposit, you may be able to use the defense of “lack of intent.”

Another commonly used defense is “materiality.” For the prosecutor to convict you of bank fraud, they need to show that any misrepresentations by you were “material,” meaning they could influence the financial institution’s decision-making. If, for example, you misrepresented something on a loan application form, but your misrepresentation was so minor that it could not influence the bank’s decision to approve your loan, you may be able to use the defense of “materiality.”

If you have been accused of committing the federal offense of bank fraud, you need to speak to a criminal defense attorney to determine if the above defenses or others can apply to your case.

Contact an NYC Bank Fraud Attorney

Building the best defense possible is key to a successful outcome in a federal bank fraud case. If you are currently facing federal bank fraud charges, contact Mark I. Cohen Esq., an experienced NYC white collar crime attorney, today at 212-732-0002 to schedule a consultation and discuss your case.



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