What the government has to prove
The bank fraud statute makes it a crime to knowingly carry out, or try to carry out, a scheme to defraud a financial institution, or a scheme to obtain money or property owned by or in the custody of a financial institution through false or fraudulent pretenses, representations or promises.
Unlike wire and mail fraud, bank fraud does not require a mailing or a wire. It does require that the person acted knowingly, and that is where many cases are contested.
Bank fraud carries a 30-year maximum, so the early response matters.
Charges and maximum penalties
| Charge | What it covers | Maximum prison term |
|---|---|---|
| Bank fraud, 18 U.S.C. § 1344 | A scheme to defraud a financial institution or obtain its money or property by false pretenses | 30 years and a fine of up to $1,000,000 |
| Wire or mail fraud affecting a financial institution, 18 U.S.C. §§ 1343, 1341 | A fraud scheme using wires or mail that affects a financial institution | 30 years and a fine of up to $1,000,000 |
| Attempt or conspiracy, 18 U.S.C. § 1349 | Attempting or agreeing with others to commit bank fraud | The same as the underlying offense |
The statute of limitations for bank fraud, and for mail or wire fraud that affects a financial institution, is 10 years. A court sentencing someone for bank fraud affecting a financial institution must also order forfeiture of property derived from the proceeds.
PPP and pandemic loan cases
Pandemic relief programs, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), have produced a large number of federal cases. The Justice Department reported that by the end of 2023, U.S. Attorneys’ Offices had charged about 3,500 defendants in pandemic fraud cases, most involving unemployment insurance, PPP and EIDL fraud.
In 2022 the Justice Department set up a COVID-19 fraud strike force in the U.S. Attorney’s Office for the Southern District of Florida. Strike force cases are worked by prosecutors and agents from agencies including the Small Business Administration’s Office of Inspector General, the FBI, the Secret Service, Homeland Security Investigations, IRS Criminal Investigation and the Postal Inspection Service.
How these cases usually unfold
- Bank or agency reviewA lender, auditor or inspector general flags an application, a deposit or a pattern.
- RecordsAgents subpoena loan files, bank statements and the documents submitted with an application.
- Interviews and target lettersBorrowers, preparers and bank employees are interviewed, and likely defendants may be notified.
- IndictmentCharges are filed, often with conspiracy and money laundering counts.
- Plea or trialThe case resolves by agreement, by motion or in front of a jury.
Where these cases are often defended
Every case turns on its own facts. Issues that frequently matter include:
- Knowledge. Whether the person knew a statement was false, or relied on a preparer, broker or business partner.
- Who did what. Which documents the person actually prepared, signed or submitted.
- The institution. Whether the alleged victim meets the statute’s requirements for a financial institution.
- Loss and forfeiture. How the government calculates loss and what property it seeks to take.
How Kaufman Legal Group can help
Jason Kaufman has tried more than 90 cases and is a Criminal Justice Act panel attorney in the Southern District of Florida. He also works as a jury consultant. He works with Phil Horowitz, who has practiced criminal defense since 1985 and spent decades on the CJA panel in the Southern and Middle Districts of Florida, and Victor E. Rocha, admitted to The Florida Bar in 1983, who practices in federal courts including the Eleventh Circuit and the Southern District of Florida and speaks Spanish. Together they bring more than 100 years of combined experience.
In a bank fraud case the team can respond to agents and subpoenas, review loan files and bank records, deal with prosecutors before charges are filed and prepare the case for trial. The first consultation is free and confidential.