Bank Fraud

Every year, thousands of people are charged with bank fraud in the United States. According to the ABA Banking Journal, the number of bank fraud attempts between 2020 and 2021 increased by over 40%.

Most bank fraud is committed online. In fact, in 2021, 33% of these crimes occurred through online banking, while another 29% were executed on mobile devices.

If you have been charged with bank fraud, you should immediately speak with a defense lawyer. This is a serious offense. Any federal crime is bound to carry significant penalties, including a federal prison sentence, heavy fines, and other legal consequences.

This article will discuss the federal crime of bank fraud and the possible penalties you may face. It will also briefly touch on why it's so important that you retain a criminal defense lawyer as soon as the government files criminal charges against you.

Elements of Bank Fraud

As with most other crimes, there are specific elements of bank fraud. The legal definition of this crime is when a person knowingly uses a scheme or artifice to execute, or attempt to execute, a plan to:

  1. Defraud a financial institution; or
  2. Obtain any money, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution
  3. By means of false or fraudulent pretenses, representations, or promises

Bank fraud is different from other white-collar crimes. It is also different from ordinary fraud. With fraud, an offender uses a scam or artifice to convince an individual or entity to give them something to which they are not actually entitled. With bank fraud, the intended victim is the financial institution itself.

Federal Bank Fraud

Some crimes, but not all, are codified by the federal government. This is the case for most white-collar crimes, including bank fraud. In part, this is because most, if not all, banks are secured by the Federal Deposit Insurance Corporation (FDIC).

The federal bank fraud statute, 18 U.S.C. section 1344, outlines the scope of the crime. It also outlines the penalties associated with a conviction of the offense.

The scope of federal bank fraud law is broad. There are several types of bank fraud, including:

  • Using stolen checks
  • Impersonating a bank or bank employee, either in-person or online
  • Forging checks, which includes adding or altering information on the check
  • Providing false financial information, orally or in writing, to a bank

Providing false or inaccurate financial information to a bank is only considered a crime if the information can influence the bank's credit decision. This applies to mortgages, loan applications, and credit card applications.

If you are convicted of federal bank fraud or any other white-collar crime, you will face a sentence of up to 30 years in federal prison and fines of up to $1 million per charge.

Other Federal Crimes Related to Bank Fraud

Most federal bank fraud cases also involve similar or related crimes. This means that if you are charged with bank fraud, you will likely be charged with additional offenses. Some of these other crimes include:

  • Obtaining money from a bank using false pretenses
  • Counterfeiting
  • Wire fraud
  • Defrauding a credit union
  • Embezzlement
  • Check fraud
  • Making false statements on a credit card application
  • Opening a bank account under a false name
  • Identity theft
  • Credit card fraud
  • Loan fraud
  • Mail fraud
  • Misrepresentation
  • Money laundering

You could face compounded sentences depending on the number of these offenses you are charged with. This means that you may be sentenced to multiple stints in federal prison due to your fraud crimes. This also means your bank fraud attorney must prepare a major defense against these crimes.

Obtaining a Credit Card by Fraudulent Means Is a Crime

Most credit card companies are linked to federal banking institutions. Therefore, obtaining a credit card through deception can be considered bank fraud. For example, you may face criminal charges if you lie about your income or employment on a credit card application.

Charges like these are rare because the federal government typically focuses on prosecuting more serious offenders. However, this does not mean you can't be arrested and charged for bank fraud in this situation. It just means that the federal government will not likely pursue such action.

Another example of fraud is obtaining a credit card by adding a co-signer, knowing they would not have agreed to cosign a credit card for you. Some people do this because they know the bank will not approve their application based on their credit alone.

Depending on whether you are convicted of a felony or misdemeanor, you could face up to three years in prison (or longer), depending on your state laws. This is one reason you may want to hire a criminal defense attorney to help defend the criminal charges filed against you.

Facing Federal Bank Fraud Charges?

Much is at stake if the government has filed federal bank fraud charges against you. A conviction for bank fraud carries serious penalties. It is a crime that affects the nation's financial institutions.

Of course, the government must prove that you willingly and knowingly committed the fraudulent action. They will have to convince the judge or jury beyond a reasonable doubt. This is not an easy burden to meet, but given the potential penalties associated with bank fraud cases, you should have a criminal defense lawyer on your side.

If you face federal bank fraud charges, you need a criminal defense attorney with experience handling federal white-collar crimes.

Are There State-Level Bank Fraud Laws?

While most of these cases are prosecuted under federal law, there are also state laws that address bank fraud and other white-collar crimes. These laws vary from state to state.

For example, California Penal Code Section 484 dictates that a defendant convicted of bank fraud or a related offense will be punished by up to three years in state prison and can be fined anywhere from $1,000 to $10,000.

Your criminal defense lawyer can educate you further on what these laws are. When you first meet your criminal lawyer, make sure to notify them of the specific charges that have been filed against you. For example, if you were charged with check kiting or counterfeiting, your attorney must prove that you did not commit that specific crime.

Bank Fraud Defenses

The good news is that there are multiple defenses to bank fraud and the other criminal offenses discussed here. When you sit down with your bank fraud attorney, they will ask specific questions to identify any possible bank fraud defenses.

Some of the commonly cited defenses in these criminal cases include:

  • Lack of intent: If your attorney can prove that you did not plan to defraud anybody, your charges may be reduced or dismissed. However, this is difficult to prove. It is hard to convince a judge or jury that you honestly had no intent to defraud the bank. Why else would you have engaged in the behavior listed in your criminal complaint?
  • Actual innocence: It may be possible to demonstrate that you did not engage in the behavior alleged by law enforcement and the prosecutor.
  • Mental illness or defect: If your attorney can find a psychiatrist to confirm that you suffered from a mental disorder at the time of the crime—which affected your ability to know right from wrong—you may avoid a conviction.
  • Entrapment: You may be able to show that you were somehow entrapped by law enforcement or some other entity. Just know that it is very difficult to succeed with this defense.
  • Coercion or duress: In limited situations, you may be able to convince the judge or jury that you only committed the fraud because of duress or coercion. For example, you may be acquitted of the charges if your spouse or other third party forced you to engage in illegal activity under threat of serious bodily harm or death.

Facing Federal Bank Fraud Charges? Find a Criminal Defense Attorney Today

Bank fraud can carry serious penalties. In order to be convicted, the government must prove that the accused willingly and knowingly committed the fraudulent action. If you are facing federal bank fraud charges, you will need a criminal defense attorney who has experience handling federal white-collar crimes.

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