Federal Bank Fraud Charges Under 18 USC 1344: When Banks Fight Back
So your probably facing federal bank fraud charges and your ABSOLUTELY SHOCKED because you thought it was just a loan application or business banking issue. Maybe you inflated income on loan application. Maybe there’s allegations you deposited fraudulent checks. Or maybe prosecutors claim you obtained PPP loan through misrepresentations. Look, we get it. Your COMPLETELY OVERWHELMED by these charges. And you should be TERRIFIED! Because bank fraud under 18 USC 1344 carries 30 YEARS in federal prison and $1 MILLION fine – more than wire fraud, mail fraud, or most other fraud offenses!
What Is Federal Bank Fraud Under 18 USC 1344?
Let me explain why bank fraud is prosecutorial favorite. Section 1344 enacted in 1984 to combat frauds against federally-insured financial institutions – gives federal government jurisdiction over ANY fraud involving FDIC-insured banks!
The statute has TWO alternative prongs – prosecutor can charge either or both! Prong One: scheme to defraud financial institution! Prong Two: obtaining money or property of financial institution by false pretenses! Each carries same 30-year maximum!
Here’s what’s really scary – “financial institution” covers over 4,000 FDIC-insured banks, credit unions, savings and loans! Any fraud touching these institutions? Federal crime! Deposited bad check at your local bank? Federal bank fraud! Lied on car loan application at credit union? Federal crime!
Don’t need to prove bank actually lost money! Attempted bank fraud is same crime as completed fraud! Scheme detected before bank loses anything? Still 30 years! We’ve seen prosecutions where banks were fully repaid but fraud charge stands!
What Are the Elements of Bank Fraud?
Four elements prosecutors must prove but all broadly interpreted!
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(212) 300-5196Must prove defendant KNOWINGLY executed or attempted to execute scheme! Knowledge requirement means aware of scheme and participation was voluntary! But prosecutors use circumstantial evidence – patterns of conduct, false documents, inconsistent statements!
Must prove scheme to defraud financial institution OR to obtain property by false pretenses! First prong targets defrauding bank itself! Second prong includes obtaining victim’s money through bank! Either way satisfies statute – prosecutors charge both prongs for same conduct!
Must prove statements or omissions were MATERIAL! Material means capable of influencing bank’s decision! Lying about income on loan application? Material because affects lending decision! Overstating collateral value? Material! But opinions and puffery may not be material!
Todd Spodek
Lead Attorney & Founder
Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
You applied for a $350,000 SBA loan to expand your restaurant and listed projected revenues that were significantly higher than your actual earnings, thinking the bank would never scrutinize the numbers closely. Six months later, two FBI agents showed up at your restaurant with a federal grand jury subpoena for all your financial records, and now you've learned you're the target of a federal bank fraud investigation under 18 USC 1344.
Can I really face federal prison time just for overstating my income on a bank loan application?
Absolutely — federal bank fraud under 18 USC 1344 carries a maximum sentence of 30 years in prison and up to $1 million in fines for each count, and prosecutors take these cases extremely seriously. The government doesn't need to prove the bank actually lost money; they only need to show you knowingly executed or attempted to execute a scheme to defraud a federally insured financial institution. However, there are strong defenses we can build, including challenging whether you had the specific intent to defraud versus making an honest mistake or relying on your accountant's projections. Early intervention by an experienced federal defense attorney can sometimes result in a pre-indictment resolution that avoids formal charges altogether.
This is general information only. Contact us for advice specific to your situation.
Must prove financial institution was FDIC-insured! This gives federal jurisdiction! But nearly ALL banks, credit unions, and savings institutions are FDIC-insured! Prosecutors easily prove this element through FDIC records!
Intent to defraud required but proven circumstantially! Don’t need direct evidence defendant intended to cheat bank! Jury can infer from false statements, concealment, pattern of conduct! Good faith belief destroys intent element!
