Bank fraud is a federal crime that encompasses broad behaviors with the goal of defrauding a financial institution. Punishment for bank fraud is severe and includes up to thirty years and prison and a $1 million fine.
Attorney Ron D. Herman, founder of Herman Law, P.A., is a former prosecutor and expert in criminal law. Attorney Herman’s experience and skill in the courtroom make him a force to be reckoned with. If you are facing criminal charges related to bank fraud, Attorney Herman will work tirelessly to help you achieve the best possible outcome in your case.
What is bank fraud?
Bank fraud is a federal crime perpetrated against a financial institution that is federally insured or linked to the federal system of banks.
The federal criminal code states that bank fraud occurs when a defendant:
executes, or attempts to execute, a scheme or artifice–
- to defraud a financial institution; or
- to obtain any of the money, 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.
18 U.S.C. § 1344.
“Scheme or Artifice”
This statute intentionally defines bank fraud very broadly. There is no precise definition for the phrase “scheme or artifice,” but it is commonly understood to mean a plan or other course of action intended to deceive others by false or fraudulent pretenses to obtain money, property, or services. One example of a scheme or artifice is impersonating another person to obtain funds from that person’s bank account.
Fraud itself is generally defined as a deceptive act intended to result in financial gain. In the prior example, impersonating another person is a fraudulent act because the intent behind it is to gain funds belonging to the other person.
“Pretenses, Representations, or Promises”
False or fraudulent pretenses, representations, or promises include numerous criminal behaviors that equate to lying or creating a false narrative. In the prior example, the impersonation is a false pretense or representation because the intent is to create the belief that one is another person. Other examples of false pretenses or representations include providing inaccurate or falsified financial documents or lying about assets. A false promise would include signing a promissory note to repay a debt with the knowledge that the debt will never be repaid.
What is a financial institution?
In general, a financial institution is a bank. However, the federal statute defines a financial institution as being one of eight different types of institutions. These include banks with deposits insured by the FDIC, institutions that are members of the Federal Reserve, credit unions, home loan banks, broker-dealers registered with the SEC, and even foreign banks operating under the Federal Reserve.
The most important thing to remember is that the victim or intended victim of bank fraud must be a financial institution. While individuals and other companies are often harmed by fraudulent activity, the crime of bank fraud only occurs when the scheme or artifice is directed at a financial institution. Other federal and state crimes may apply to individual victims of fraudulent activity.
Do I actually have to obtain money or property to be prosecuted?
Unfortunately, the answer to this question is no. Because the federal statute provides a person who executes or attempts to execute a scheme or artifice to defraud is liable, a defendant does not have to successfully obtain money or property from a financial institution to be guilty of bank fraud. All that is necessary is that the defendant attempted to defraud a financial institution.
What is the punishment for bank fraud?
Federal law is harsh on criminals convicted of bank fraud. The statute provides that a person convicted of bank fraud may be imprisoned for up to thirty years and/or pay a fine of up to $1 million.
The severity of the punishment varies based on the circumstances of each case and the federal sentencing guidelines prescribe the level of punishment applied based on the value of the money or property involved and other mitigating or aggravating factors.
What are the defenses to bank fraud?
One of the most common defenses to charges of fraud is that a defendant did not have the intent to commit fraud. In the case of bank fraud, this could occur when a defendant submitted incorrect financial records that were not intentionally falsified. Thus, if the financial records were technically false as a result of inaccurate bookkeeping but the defendant did not intentionally falsify the records, there is no liability for bank fraud.
The ten-year statute of limitations also serves as a defense to bank fraud. This means the government must bring charges for bank fraud within ten years of the commission of the offense. This is important because many statutes of limitations begin running from the date the crime is discovered–often because crimes involving fraud are discovered well after the commission of the fraud. However, the federal statute specifically states the statute of limitations runs from the date the fraud is committed.
Can the State of Florida bring charges as well?
While bank fraud is specifically a federal crime, the criminal activity involved may overlap into behavior prohibited by Florida’s criminal laws. For instance, Florida law recognizes mortgage fraud as the act of making a misrepresentation during the mortgage lending process with the intent to induce a lender into originating a loan it otherwise would not. Mortgage fraud is a third-degree felony punishable by up to five years in prison and/or a $5,000 fine. Other state charges may apply depending on the facts and circumstances.
Contact Herman Law, P.A. Today
If you have been indicted or are being questioned about transactions with a bank by either state or federal authorities you should reach out to Herman Law, P.A. as soon as possible. Prosecution of any kind is complex and challenging but Attorney Ron D. Herman will schedule a free consultation and go over your case with you. When you choose to hire Herman Law, P.A. you are in the hands of a trusted and experienced advisor who will ensure your rights are protected throughout the legal process.