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Bank fraud is a serious federal offense that involves deliberately deceiving a financial institution with the intent to secure unlawful gains. Such activities may include false documentation, fake identities, or fraudulent transactions designed to swindle money. It’s crucial to understand both the elements that constitute this crime and the legal defenses that can be mounted against such charges as this can make a significant difference in the outcome of a case, potentially leading to acquittal or reduced penalties.

What Is Federal Bank Fraud?

Federal bank fraud is a criminal offense that involves intentionally deceiving a federally insured financial institution to gain something of value, usually money, at the bank’s expense. The general federal bank fraud statute 18 U.S.C. § 1344 defines federal bank fraud as “knowingly executing or attempting a scheme or artifice to defraud a financial institution, or to obtain financial institution money, funds, credit, assets, securities, or other property by false or fraudulent pretenses, representations, or promises.” Perpetrators can use a variety of methods to commit bank fraud, including check fraud, loan fraud, and electronic schemes. Conviction under federal statutes can result in severe penalties, such as hefty fines and lengthy prison sentences.

Key Elements of Bank Fraud

The key elements of bank fraud serve as the building blocks of a case, outlining what the prosecution must prove to secure a conviction. These include:

  • False Representation – False representation involves the intentional presentation of untrue statements or documents. For example, someone might submit doctored financial statements to secure a loan they wouldn’t qualify for otherwise. The false information must be significant enough to influence the bank’s decision-making, such as approving a loan or extending a line of credit. The key here is that the individual knowingly provided incorrect or misleading information with the aim of defrauding the bank.
  • Intent to Defraud – Intent to defraud is another fundamental element that must be proven in a bank fraud case. The accused must act or attempt to act “knowingly.” This means that the accused didn’t merely make a mistake or oversight; they acted with the specific goal of deceiving the financial institution. Establishing this element is critical, as a lack of demonstrable intent could lead to the case being dismissed or charges being reduced.
  • Materiality – Materiality refers to the significance of the false statement or action in influencing the bank’s decision. For a claim of bank fraud to hold up in court, the deceptive information provided must be substantial enough to affect the bank’s actions, such as approving a loan or allowing a financial transaction. It’s not enough for the information to be simply false; it must be materially false, meaning its falsity has a direct impact on the outcome. This element helps to distinguish between minor errors and actions intended to defraud.
  • Deception Leads to Loss or Risk – Essentially, the fraudulent activity must either result in an actual financial loss for the bank or expose the institution to a risk of such loss. This could range from unauthorized withdrawals that deplete bank funds to fraudulent loans that are unlikely to be repaid. 

Legal Defenses to Bank Fraud

Facing a charge of bank fraud can be a daunting experience, but there are several legal defenses that may be employed to challenge the allegations including:

  • Lack of Intent – Lack of intent is a common defense raised in bank fraud cases. This strategy aims to show that the accused did not act with the purpose of deceiving the financial institution, thereby undermining a critical element needed for a conviction. Demonstrating a lack of intent could mean providing evidence that the accused believed their statements were accurate or that any inaccuracies were the result of an honest mistake. 
  • Insufficient Evidence – Insufficient evidence is another commonly used defense in bank fraud cases. Essentially, this defense argues that the prosecution has failed to provide enough evidence to prove each element of the crime beyond a reasonable doubt. If successful, this line of defense can result in the dismissal of charges or a not guilty verdict, as the burden of proof lies with the prosecution.
  • Lack of Materiality – The defense of lack of materiality argues that the false statements or actions were not significant enough to influence the bank’s decisions or actions. In other words, even if a misrepresentation occurred, it was not material to the outcome and therefore should not be considered as bank fraud. 
  • Illegally Obtained Evidence – This defense contends that the evidence being used against the accused was gathered in violation of their constitutional rights, such as through unlawful searches or seizures. In such cases, the defense can move to have this evidence suppressed, meaning it cannot be used in court. If critical evidence is excluded, this can severely weaken the prosecution’s case and may lead to the charges being dropped or reduced.

Contact an Experienced Bank Fraud Attorney

Understanding the complexities of bank fraud charges and the available legal defenses is a critical step, but it’s just the beginning. Each case is unique and requires a personalized strategy for the best chance at a favorable outcome. If you’re facing bank fraud allegations, we strongly encourage you to reach out to Federal Criminal Attorneys of Michigan for a consultation and expert legal representation.