Bank Fraud – 18 U.S.C. § 1344

Bank fraud under18 U.S.C. § 1344 is a federal offense that criminalizes schemes designed to defraud financial institutions or obtain money, funds, credit, or assets through false or fraudulent representations.

Federal prosecutors aggressively pursue bank fraud cases because these crimes threaten the integrity of the U.S. financial system. A conviction can result in severe financial penalties and lengthy federal prison sentences.

Bank fraud can involve a wide range of conduct, from falsifying loan documents to complex financial schemes involving identity theft or corporate fraud.

Because most banks are federally insured, these cases are typically investigated by federal agencies and prosecuted in federal court.

If you are under investigation or charged with bank fraud, consulting an experienced federal criminal defense attorney is critical to protecting your rights and building a strong defense.

Your best chance for a positive outcome is by working with a defense attorney at Eisner Gorin LLP. To set up a consultation, feel free to call us at (818) 781-1570 or reach out to us here.

What Is Bank Fraud Under Federal Law?

The federal bank fraud statute, 18 U.S.C. § 1344, makes it illegal to knowingly execute or attempt to execute a scheme to defraud a financial institution or obtain property from a financial institution through fraudulent means.

In simple terms, bank fraud occurs when someone intentionally deceives a bank or financial institution to obtain money, credit, or other financial benefits.

The statute states that anyone who:

knowingly executes or attempts to execute a scheme to defraud a financial institution, or
obtains money, funds, or property owned by a financial institution through false or fraudulent pretenses

may be prosecuted under federal law.

What Counts as a Financial Institution?

The law applies to financial institutions that are federally chartered or federally insured. This includes banks insured by the Federal Deposit Insurance Corporation (FDIC) as well as many credit unions and other regulated financial entities.

Because most banks are federally regulated, alleged fraud involving bank accounts, loans, or financial transactions often becomes a federal criminal investigation.

Examples of Federal Bank Fraud

Bank fraud can occur in many different ways. Common examples of conduct that may lead to charges under 18 U.S.C. § 1344 include:

Failing to disclose debts, defaults, or prior bankruptcies on a loan application
Overstating income or assets to qualify for a loan
Using a false identity to obtain financial services or credit
Submitting fraudulent financial statements to secure financing
Forging signatures to withdraw funds from bank accounts
Creating fraudulent deposits using empty envelopes or altered checks
Stealing credit card or banking information for unauthorized transactions
Fraudulent withdrawals from bank accounts
Misrepresenting the value of property used as loan collateral

Many of these actions involve intentional misrepresentations that induce a financial institution to approve transactions or release funds that would otherwise be denied.

Federal mortgage fraud is a high-stakes white-collar offense that involves making false statements, omitting key financial information, or inflating property values to influence a lender's decision.

Related Federal Bank Fraud Statutes

Federal prosecutors often charge bank fraud alongside other related financial crimes. Several federal statutes frequently appear in bank fraud indictments.

18 U.S.C. § 1014 – False Statements to a Financial Institution

This statute makes it illegal to knowingly submit false information to influence a bank's lending decisions. Examples include falsifying income, assets, or financial history on loan applications.

18 U.S.C. § 656 – Bank Embezzlement

Bank employees who misappropriate funds from a financial institution may face charges under this statute.

18 U.S.C. § 215 – Bank Bribery

This law criminalizes giving or receiving bribes in connection with financial institution transactions.

18 U.S.C. § 1005 – False Bank Entries

This statute targets individuals who falsify bank records, reports, or accounting entries to conceal fraud or financial misconduct.

Because financial crimes often involve multiple acts, federal prosecutors frequently bring several charges simultaneously.

Federal Penalties for Bank Fraud

Bank fraud is considered a serious federal felony. The potential penalties under 18 U.S.C. § 1344 include:

Up to 30 years in federal prison
Fines of up to $1,000,000
Restitution to victims
Asset forfeiture in certain cases

In addition to criminal penalties, individuals convicted of bank fraud may face long-term consequences such as damage to professional reputations, loss of employment opportunities, and restrictions on financial activities.

Federal sentencing guidelines may also increase penalties depending on factors such as:

The total financial loss involved
The number of victims
Whether identity theft was involved
The defendant's role in the scheme

House arrest in federal criminal cases—also referred to as home detention or home confinement—is a court-authorized alternative to incarceration that allows a defendant to serve all or part of a sentence at home under strict supervision.

How Federal Investigations Begin

Many bank fraud investigations begin when internal bank auditors detect irregular transactions or suspicious financial activity.

Financial institutions are required to report certain suspicious transactions to federal authorities through Suspicious Activity Reports (SARs).

Federal agencies that commonly investigate bank fraud include:

Federal Bureau of Investigation (FBI)
U.S. Secret Service
Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG)
Department of Justice (DOJ)

Once investigators gather sufficient evidence, prosecutors may seek a federal indictment through a grand jury.

How to Defend Against Bank Fraud Charges

Being accused of bank fraud does not mean you will be convicted. Federal prosecutors must prove every element of the crime beyond a reasonable doubt, including that the defendant acted with intent to defraud.

Lack of Intent

One of the most common defenses in bank fraud cases is the absence of criminal intent. Fraud requires a deliberate scheme to deceive. Mistakes, misunderstandings, or inaccurate financial statements that were not intentionally deceptive may not meet the legal definition of fraud.

Clerical or Administrative Errors

Financial records are often prepared by multiple individuals, including accountants, employees, or financial advisors. Errors in documentation do not necessarily indicate fraud.

Insufficient Evidence

Federal prosecutors must show that the defendant knowingly participated in a fraudulent scheme. If the evidence is weak or circumstantial, the defense may challenge the government's ability to prove intent.

Violation of Constitutional Rights

If investigators obtained evidence through an unlawful search, improper interrogation, or other constitutional violations, a defense attorney may file motions to suppress that evidence.

Frequently Asked Questions

What is bank fraud under federal law?

Bank fraud involves intentionally deceiving a financial institution to obtain money, credit, or other financial benefits through false or fraudulent representations.

Is bank fraud a federal crime?

Yes. Because most banks are federally insured, bank fraud is typically prosecuted in federal court under 18 U.S.C. § 1344.

What is the maximum sentence for bank fraud?

A conviction for federal bank fraud can result in up to 30 years in federal prison and fines of up to $1,000,000.

Can bank fraud charges be dismissed?

Charges may be dismissed if prosecutors cannot prove intent to defraud, if the evidence is insufficient, or if investigators violated constitutional rights during the collection of evidence.

Should I speak with federal investigators?

If federal agents contact you regarding a bank fraud investigation, it is generally advisable to speak with an experienced federal defense attorney before answering questions.

Why Legal Representation Is Critical in Bank Fraud Cases

Federal bank fraud investigations are complex and often involve extensive financial records, digital evidence, and expert testimony. Prosecutors have significant resources and experience handling financial crime cases.

A skilled federal criminal defense attorney can analyze the evidence, challenge the prosecution's claims, and develop a strategy designed to protect your rights and pursue the best possible outcome.

If you are under investigation or facing federal bank fraud charges, seeking experienced legal representation as early as possible can make a significant difference in the outcome of your case.

Eisner Gorin LLP is here to help. Schedule your consultation by calling (818) 781-1570 or using the contact form. Our law firm is based in Los Angeles.

Bank Fraud