18 U.S.C. § 1344 – Bank fraud

Bank Fraud: What is it and What are the Consequences?

Bank fraud is no joke, folks. This federal crime, covered by 18 U.S.C. § 1344, involves scheming to obtain money or property from a bank through false statements or representations. And it comes with some pretty serious penalties—we’re talking fines up to $1 million and up to 30 years behind bars. Yikes!

Now, before you start sweating, let’s break this down in simple terms. Essentially, 18 U.S.C. § 1344 makes it illegal to knowingly try to swindle a bank or other financial institution. The law covers all kinds of banks—national banks, credit unions, savings associations, even some insurance companies. Anywhere there are federally insured funds, bank fraud charges can come into play.

Common Types of Bank Fraud

Bank fraud schemes come in all shapes and sizes. Here are some of the most common:

• Fake deposits – Depositing bad checks or falsifying deposit slips to temporarily get more money in your account.
• Fake withdrawals – Using forged or stolen checks to withdraw money that isn’t yours.
• Credit fraud – Providing false information on a loan or credit application.
• Embezzlement – If a bank employee secretly takes money from the bank’s funds.
• Mortgage fraud – Lying on a mortgage application to get approved for a bigger loan.

And the list goes on. Basically, any lies or deception used to get money from a bank can lead to bank fraud charges. Even just trying or planning to commit bank fraud—without succeeding—can land you in legal hot water.

What Does the Law Say Exactly?

Now let’s look at what 18 U.S.C. § 1344 actually says. There are two key parts to this law:

1. Knowingly executing or attempting “a scheme or artifice” to defraud a financial institution
2. Knowingly executing or attempting to obtain bank property “by means of false or fraudulent pretenses, representations, or promises”

Yeah, it’s pretty broad. The law covers everything from complex fraud schemes to simply writing a bad check. Prosecutors can also charge bank fraud along with other crimes like wire fraud, mail fraud, or false statements.

The penalties vary based on how much money was obtained/attempted through the fraud. You’re looking at:

• Up to 30 years in prison and a $1 million fine if the fraud affects a financial institution
• Up to 20 years and a $1 million fine if the fraud just attempts to affect a financial institution
• Up to 10 years and a $100,000 fine for smaller-scale bank fraud

Yikes again! As you can see, bank fraud is not taken lightly. These severe sentences are meant to deter people from messing with banks’ money and protect the integrity of the U.S. financial system.

What are the Defenses?

Now, let’s be real here—sometimes honest mistakes happen. Or there are cases where you had no idea you were committing bank fraud. Your defense lawyer’s job is to prevent you from being wrongly convicted or facing unfair punishment. Here are some common defenses used:

• You lacked criminal intent – This means you didn’t knowingly try to deceive the bank, it was just an accident.
• You were entrapped – Law enforcement pressured you into committing bank fraud when you otherwise wouldn’t have.
• You made a mistake – Like writing a bad check by accident or misunderstanding loan requirements.
• You were an unwitting participant – Someone else committed the fraud and you had no idea.

When evidence is lacking or there are mitigating circumstances, an experienced attorney can often get charges reduced or dismissed. But you have to act fast and get legal help right away.

Real World Examples

To understand bank fraud better, let’s look at some real cases:

Embezzlement

A bank teller was caught embezzling over $400,000 over several years. She would pocket cash from her drawer and falsify records to cover it up. She pled guilty to bank fraud and was sentenced to 2 years in prison.

Mortgage Fraud

A mortgage broker provided false income information on loan applications so unqualified buyers could purchase homes. When they defaulted, the bank lost over $2 million. He was convicted of bank fraud and sentenced to 5 years.

Fake Deposits

To cover gambling debts, a man deposited forged checks into his account. When the checks bounced, the bank was out $47,000. He got 3 years’ probation and had to repay the money.

As you can see, bank fraud has serious consequences. These offenders ended up with multi-year prison sentences and had to repay all the money.

How to Avoid Accidental Bank Fraud

We get it—banking can be complicated! Here are some tips to avoid accidentally committing fraud:

• Double check your paperwork. Make sure all statements on loans, deposits, withdrawals, etc. are 100% accurate.
• Never sign blank documents or leave key info blank. Fill out everything!
• Review account statements regularly to catch errors quickly.
• If you make a mistake, notify your bank immediately and try to correct it.
• Seek help understanding complex transactions like mortgage loans.
• Be very wary of get-rich-quick schemes involving banks.

And if you get contacted by law enforcement about potential bank fraud, don’t say anything and call a lawyer immediately. Your freedom could depend on it.

At the end of the day, use common sense when banking. If something seems sketchy or too good to be true, it probably is. Protect yourself and avoid the huge penalties that come with bank fraud charges. Your future self will thank you!

References

• 18 U.S.C. § 1344 – Bank fraud law
• Overview of bank fraud charges
• Federal bank fraud defenses
• In-depth look at 18 U.S.C. § 1344