Bank Fraud

Bank fraud encompasses a vast array of federal white collar crimes where banks are the object of the fraud. The most commonly used statute for prosecuting bank fraud is 18 U.S.C. §1344, which makes it a federal crime to participate in a scheme to defraud a federally insured financial institution. Another provision of §1344 makes it a crime for the defendant to knowingly participate in a scheme against a bank by means of material false pretenses or statements.

Similarly, there must be proof that the intended victim of the fraud is a federally insured financial institution. This element must be proven to prosecute a criminal case in federal court. All U.S. banks are federally insured so every bank fraud case will have federal jurisdiction. If you or someone you know has been charged with bank fraud, do not hesitate to contact Miami attorney Ken Swartz for an initial consultation.

Usually a Bank fraud scheme revolves around an effort to obtain money or financing from a bank by providing the bank with false financial information in order to secure a loan. In one case a business owner provides false sales receipts to a bank to increase his line of credit. In another case a car dealer provides false car sales documents to receive more floor financing. In the movie, Fargo William Macy scammed his bank by borrowing money for his car dealership and sending papers showing fictitious sale. The band hounded him to send the VIN of the cars sold. Another example is the borrower that needs to show the bank the property being put up as collateral has enough value to cover the loan. To convince the bank, he presents the bank with false appraisals to support an over inflated value.

An example of a more complicate bank fraud scheme is one devised by a real estate developer in Florida who fraudulently obtained loans from a bank. The developer acquired 12 parcels of land under a shell company. He then sold the land at a much higher price to a limited partnership he controlled. The then used inflate appraisals to obtain 75% financing on the inflated resale price of the land. He failed to disclose that he was owner of the shell companies that sold the land at the inflated prices and that purchased the land at substantially lower prices. He also falsely said the limited partnership made a substantial down payment for the property when it had not. All of these false statements and deceptions were designed to secure money from the bank on property for which it would not have lent if the bank had known the undisclosed facts.

A mortgage fraud indictment will charge the defendants with making a false statement to a lending institution or it could be charged under wire fraud and mail fraud statutes. There is no statute which specifically says it is a crime to commit Mortgage fraud.

A conviction under the “scheme to defraud” clause of the bank fraud statute requires that the defendant engage in or attempt to engage in a course of conduct designed to deceive a federally chartered or insured financial institution into releasing property, with the intent to victimize the institution by exposing it to actual or potential loss. The bank need not actually be victimized; the statute makes an individual criminally culpable for devising and executing or attempting to execute such a scheme with the intent to victimize the bank.

Miami attorney Ken Swartz at the Swartz Law firm has the knowledge and experience needed to represent those charged with bank fraud. Contact him for an initial consultation.