Common Types of Bank Fraud
Bank fraud, as defined within the U.S. Code, stands apart from various other frauds and scams. However, this expansive realm of deceit can be further categorized. The prevalent forms of bank fraud encompass accounting discrepancies, counterfeit checks, fraudulent documents, and an array of other deceptive schemes.
- Fraudulent documents and loan applications: Acc documentation is crucial within financial institutions, especially banks, where meticulous tracking of every transaction is paramount. However, it is important to note that the creation of fraudulent documents to conceal missing funds, such as loans, withdrawals, or transfers, is illegal and unethical.
- Accounting fraud: Fraudulent bookkeeping has long been employed as a strategy to conceal bank fraud and similar schemes. It involves misrepresenting income, receivables, inflating company asset values, or portraying profitable operations – all in pursuit of obtaining a loan or securing favorable financing.
- Money laundering: A distinct federal statute exists to prohibit the majority of money laundering activities. However, when these acts involve banks and financial institutions and aim to conceal the source of funds, they are concurrently regarded as bank fraud. To enhance their ability to detect money laundering schemes, many financial institutions are embracing cutting-edge technologies such as artificial intelligence and blockchain.
- Mobile fraud and deposits: A significant amount of bank fraud is currently carried out through applications and software accessible on smartphones. These fraudulent activities may involve exploiting mobile remote deposit capture technology, which allows checks to be deposited via digital images, or engaging in online identity theft by hacking personal information stored on mobile apps.
- Credit card fraud: In the United States, debit and credit card fraud pose a significant problem. These types of fraud are typically dealt with under a distinct statute of the U.S. Code. However, in cases where payment card fraud, commonly known as debit card fraud, directly involves the financial institution that supports the card and holds the associated accounts, federal investigators may consider pursuing charges under the bank fraud statute.
Penalties For Bank Fraud Charges
A federal bank fraud conviction carries severe penalties, including lengthy imprisonment and substantial fines. Upon conviction, the court can impose fines of up to $1,000,000. In addition to the fine, the court may sentence the offender to a maximum jail term of 30 years. Restitution to the affected financial institution(s) may also be ordered by the court.
Furthermore, if convicted, individuals may face additional penalties due to the association of these charges with other offenses. For instance, bank fraud charges often coincide with charges of attempted and conspiratorial fraud, as defined in 18 U.S.C. §1349. A skilled Las Vegas bank fraud lawyer can evaluate your fraud case and assess the potential penalties for the defendant.
It is worth noting that Nevada has only two federal courthouses: The Lloyd D. George Federal Courthouse in Las Vegas and the Bruce R. Thompson Federal Courthouse in Reno. Additionally, individuals convicted of federal criminal charges in Nevada are typically incarcerated in out-of-state facilities since there are no federal prisons within the state.
Convictions Under the Federal Bank Fraud Statute
To secure a conviction under 18 U.S.C. §1344(1), a prosecutor must establish, beyond a reasonable doubt, that the defendant knowingly engaged in or attempted to engage in a scheme to defraud a federally insured or chartered financial institution. Moreover, the prosecutor must demonstrate that the defendant employed material misrepresentations or acts of concealment in the commission of the alleged offense.
Similarly, for a guilty verdict under §1344(2), the prosecutor must prove, beyond a reasonable doubt, that the defendant knowingly executed or attempted to execute a plan to defraud a federal financial institution by utilizing materially false representations or fraudulent pretenses to obtain government-controlled money or property.
Although the statutory language may appear broad, it is important to note that defenses exist for this charge. Not every misrepresentation made to a bank or financial institution is sufficient to warrant a conviction. The Second Circuit Court of Appeals has clarified that a misrepresentation is considered material only if it has the potential to influence the actions of a bank. For reference, please see United States v. Rigas, 490 F.3d 208, 231 (2d Cir. 2007) and United States v. Rodriguez, 140 F.3d 163, 168 (2d Cir. 1998). Additionally, it is crucial to understand that the ‘scheme to defraud’ element in both subsections requires more than a mere simple act. For instance, the act of “depositing checks into a bank account when the depositor knows they are not entitled to the funds” does not constitute a crime punishable under §1344 (Rodriguez, 140 F.3d at 168).