Federal Bank Fraud Laws (18 USC 1344)
Consider this scenario: You’ve been running a business for many years, but your business is failing. You do not want the business to go under and you do not want to file for bankruptcy. Thus, your only option is to obtain a bank loan to get your business running efficiently enough to make a profit. However, you have horrible credit and insufficient income. Worried that you will not get approved for the loan, you falsify the details of your loan application to make sure you are approved, using a false name, inflated income, and a fraudulent credit report. You are approved for more funds than you could have imagined, and you use that money to save your business with enough leftover to buy yourself a multi-million dollar estate. However, your luxurious new life is short lived, as you are arrested months later and charged with federal bank fraud.
Under Title 18 United States Code section 1344, it is unlawful to knowingly execute, or attempt to execute, a scheme or artifice:
- to defraud a financial institution; or
- 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.
Federal Prosecution of Bank Fraud Charges (18 USC 1344)
In order for you to be convicted of federal bank fraud under 18 USC 1344, the prosecution must prove beyond a reasonable doubt that you:
- Executed or attempted to execute a scheme, substantially as charged in the indictment, to defraud a financial institution [or to obtain a financial institution’s money by means of false or fraudulent pretenses];
- Knowingly and willfully participated in this scheme with the intent to defraud [or to obtain money by means of false or fraudulent pretenses];
- The financial institution was federally insured, a federal reserve bank or a member of the Federal Reserve System.
Federal Sentencing and Punishment for a Bank Fraud Conviction
Federal bank fraud sentencing guidelines are severe. If you are convicted of this crime in federal court, you face a sentence of up to 40 years in federal prison and fines of up to one million dollars.
Possible Defenses to Federal Bank Fraud
A skilled federal criminal defense attorney can raise several legal defenses to the charges you are facing. These include:
- You had no knowledge or intent to defraud. If you were involved in the transaction but did not have knowledge of its fraudulent and unlawful pretenses, or you did not intend to participate in the transaction, you should not be convicted of this crime.
- You did not participate in a scheme to defraud a financial institution. If you were not involved in the scheme or the alleged incident did not involve obtaining money directly from a financial institution, but rather an intermediary such as a member of the bank, you should not be convicted of federal bank fraud. However, you could be convicted of other crimes.
- There was no act of misrepresentation– Depending on the circumstances, if you can prove that the facts presented to the financial institution were in fact true, then you should not be found guilty of federal bank fraud.
- The financial institution never faced any actual threat of potential loss – While the financial institution doesn’t need to suffer any actual loss, if it can be shown that the institution never faced any potential loss regardless of how the scheme occurred, you should not be convicted of federal bank fraud.
- The financial institution was not federally insured– While this may still expose you to criminal liability, if the financial institution (e.g. a private lender ) is not federally insured, then this particular federal offense is not violated.
Frequently Asked Questions Regarding Federal Laws on Bank Fraud
What happens if I tricked someone into pulling money out of an account to give to me?
In this case, the victim isn’t a financial institution. Rather, the person who was tricked into withdrawing money out of their account is the victim. Even though the money may have been held by a financial institution, the money was withdrawn as property of the alleged victim. While you may have other criminal exposure for these acts, this does not constitute a violation of the federal bank fraud statute.
What if the bank didn’t lose any money?
As discussed above, a bank doesn’t need to suffer any actual financial loss or damages in order for you to be convicted of federal bank fraud. The prosecution need only prove that the financial institution was under threat of suffering financial loss or damages as a result of your actions.
What if I didn’t initially intend to defraud the financial institution and it was a bank mistake that I just never corrected?
The prosecution must prove that you had knowledge and intent to defraud the financial institution. If there was some kind of computer glitch, for example, while you were filling out a loan application, you should not be found guilty of federal bank fraud.
Call the Federal Criminal Defense Attorneys at Wallin & Klarich Today
If you or a loved one has been charged with violation of federal bank fraud laws, you need to contact an experienced federal criminal defense attorney immediately. At Wallin & Klarich, our skilled attorneys have been successfully defending clients facing federal criminal charges for over 40 years. We can help you, too.
With offices located in Los Angeles, Sherman Oaks, Torrance, Orange County, San Diego, Riverside, San Bernardino, Ventura, West Covina, and Victorville, there is an experienced Wallin & Klarich federal criminal defense attorney available to help you no matter where you work or live.
Call us today at (877) 4-NO-JAIL or (877) 466-5245 for a free phone consultation. We will be there when you call.