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What Is Bank Fraud And How Severe Is The Punishment?

November 7, 2022

Bank fraud is a complex, multi-faceted crime that evolves as there are changes in how people and banks manage money. Therefore, bank fraud’s legal definition is broad because it must reflect the many different types of the crime.

There are many instances of bank fraud in the US every year. For example, the Federal Trade Commission (FTC) recently reported there were 52,453 reports of investment-related fraud reported in 2021, with a total of $1.6 billion.

This article details what bank fraud is and how the crime often happens. If you have been accused of bank fraud, it is vital to seek qualified legal representation immediately. Bank fraud attorneys in Chicago at the Law Offices of Vadim Glozman can assist you.

Bank Fraud Overview

Band fraud happens when false information, pretense, and deception are used to steal money from a bank or financial institution. The definition of bank fraud can be found in 18 U.S.C. 1344. This statute states that a person commits bank fraud if they knowingly execute or try to execute a scam to:

Bank fraud differs from bank robbery because it does not involve threat of harm or violence. The US Secret Service investigates all cases involving bank fraud.

Bank fraud does not just apply to banks and associated financial institutions. Some of the other institutions that can be involved in a bank fraud case are:

Any other financial organization that accepts financial deposits

Types Of Bank Fraud

There are several common ways that criminals perform bank fraud:

Forgery may be a form of bank fraud when the person changes the information on a check. For example, they may add a zero to the original amount on the check. Or, they forge the person’s signature on the check. Also, fraudulent loans can be bank fraud if someone uses a false name or deception to obtain the loan. Finally, if they take out a loan and plan to file for Chapter 7 bankruptcy soon, this is also a type of bank fraud.

A growing type of bank fraud is bank impersonation. This is where the scammer establishes a phony financial institution or sets up a website to get people to deposit their money.

Stolen checks are an old-school form of bank fraud that is still popular today. This scam often involves people who work at the post office, payroll organization, or tax authority and have wide check access. They may steal the checks and open a phony bank account.

Bank Account Takeover

A growing type of bank fraud is bank account takeover or ATO. A recent financial crime report states that ATO comprises 42% of bank fraud today. This crime happens when someone gets into a bank account without proper authorization.

Many consumers may call this crime account hacking but the result is always the same. A criminal gets access to a bank account and obtains personal information, and puts the money into their personal account. Bank transfers usually cannot be reversed, so it can be challenging to undo the damage from bank account takeovers.

Experts say that bank account takeover happens in the following ways:

What Are The Penalties For Bank Fraud?

When bank fraud is a federal offense, there are serious penalties. U.S. Code 1344 establishes the penalties for those convicted of this crime. Everyone convicted of bank fraud will be sent to prison and fined. The extent of the sentence depends on the amount of money and deception involved in the crime. The federal statute says you can receive up to 30 years in prison and be fined $1 million for this crime.

For you to be convicted of bank fraud, the federal prosecutor must show that you purposely and knowingly committed the crime. For instance, if you deposited a check with forged information but did not know the information was wrong, this is not bank fraud. The prosecutor must prove that you knowingly made false representations.

A skilled criminal defense attorney may argue on your behalf that there is insufficient evidence that you made a false statement or false representation. Also, they may say that the bank knew your statement was false. In some cases, the false statement was believed, but the bank did not suffer a financial loss.

Contact Chicago Bank Fraud Attorneys Today

If you are convicted of bank fraud, your life can be turned upside down. You may be sentenced to years in state or federal prison. You could be fined tens of thousands of dollars or more. Further, you will be saddled with a felony on your criminal record. It will be difficult ever to hold a high-level job again. Getting a mortgage or renting a house or apartment can be difficult. Traveling overseas may be impossible and much more. That is why choosing a Chicago bank fraud attorney to represent you is so important.

The Law Offices of Vadim Glozman are skilled at defending people accused of bank fraud in Chicago, Aurora, Naperville, Schaumburg, Arlington Heights, Evanston, Oak Brook, and Palatine. Our bank fraud attorneys will work hard to fight the bank fraud charge to obtain the best case result.  Contact our Chicago white-collar crime attorneys now at (312) 726-9015.