Bank fraud is generally defined as the use of fraudulent of a fraudulent scheme in order to obtain money, securities, or some other property from a financial institution. Bank fraud often takes on many different forms, including check kiting, check forgery or alteration, fraudulent loan applications, and impersonation of bank employees, inspectors or customers in order to get access to bank accounts.
Although many states have state bank fraud laws, many bank fraud prosecutions occur under the federal Bank Fraud Statute, 18 U.S.C. § 1344. This statute makes it a federal crime for anyone to knowingly execute or attempt to execute a scheme or artifice to defraud a financial institution or to obtain money from a financial institution by means of fraud. The statute provides for a fine of up to $1,000,000 and a term of imprisonment for up to 30 years for anyone who is convicted of bank fraud.
A recent example of bank fraud is the case of former District of Columbia Council chairman Kwame Brown. In a guilty plea filed with the United States District Court for the District of Columbia on June 8, 2012, Brown admitted to submitting a loan application to Industrial Bank in which he overstated his annual income in an effort to ensure that Industrial Bank would approve his loan application. Brown also admitted to forging the name of a purported employer on the application when, in fact, Brown was not employed by that company.
There are often significant defenses an individual can raise when faced with allegations of bank fraud. In the modern economic climate, where several banks are facing significant losses in profits or even collapse as a result of making imprudent loans, banks are attempting to use prosecutors’ offices as an investigatory arm in order to recoup their losses. However, in many cases, it was the foolish zeal of bank officials making the loans that resulted in bad loans, rather than any type of fraud on the part of the customer.
This article was written by New Jersey white collar criminal defense lawyer Nace Naumoski.