In recent years, the prosecution of financial crimes by the Department of Justice, especially in the Southern and Eastern Districts of New York, has dramatically increased - and with it the number of bank fraud cases. Whether it emanates from a complex financial transaction or a simple check kiting scheme, the charge of bank fraud, in violation of 18 U.S.C. § 1344, is extremely serious - and a conviction carries with it a sentence of up to 30 years imprisonment and a maximum $1 million fine. The federal bank fraud statute covers two different, though related types of bank fraud: § 1344(1) generally punishes any individual who knowingly executes a scheme to defraud a financial institution; § 1344(2) is more limited, punishing any individual who knowingly executes a scheme to obtain money, credit or some other asset owned by, or under the control of a financial institution, by use of false pretenses.
Specifically, in order to be convicted of 18 U.S.C. § 1344(1), a prosecutor must prove beyond a reasonable doubt that the defendant: i) knowingly executed or attempted to execute; ii) a scheme to defraud; iii) a financial institution insured or chartered by the federal government while; iv) utilizing some material misrepresentation or act of concealment. In order to be found guilty of § 1344(2), the prosecutor must prove beyond a reasonable doubt that the defendant: i) knowingly executed or attempted to execute; ii) a scheme to defraud; iii) a financial institution insured or chartered by the federal government; iv) using materially false representations or fraudulent pretenses; v) in order to obtain money or property in its custody, control or ownership.
While the statutory language is seemingly broad, defenses to this charge exist. For example, not every misrepresentation made to a bank or financial institution is sufficient to warrant a conviction for this crime. Instead, the Second Circuit Court of Appeals held that a misrepresentation is material only if it is capable of influencing a bank's actions. See United States v. Rigas, 490 F.3d 208, 231 (2d Cir. 2007); United States v. Rodriguez, 140 F.3d 163, 168 (2d Cir. 1998). Further, the 'scheme to defraud element' of both subsections requires more than just a simple act; for example, "depositing checks into a bank account where the depositor knows that he/she is not entitled to the funds," is not a crime punishable by § 1344. Rodriguez, 140 F.3d at 168. Instead, this element requires that the prosecutor prove that the defendant engaged in a "pattern or course of conduct designed to deceive a ... financial institution into releasing property ...." United States v. Stavroulakis, 952 F.2d 686, 964 (2d Cir. 1992) (emphasis supplied). Finally, not every financial institution qualifies for protection under this statute; instead, this term is defined by 18 U.S.C. § 20 and includes insured depository institutions of the Federal Deposit Insurance Act, credit unions with accounts insured by the National Credit Union Share Insurance Fund, federal home loan banks, small business investment companies, the Federal Reserve bank or a member bank of the Federal Reserve System, and mortgage lending businesses.
Hiring a top New York federal criminal defense attorney to defend you in any bank fraud prosecution is crucial and will ensure that every viable defense is explored and utilized on your behalf. Lawyers at the Law Offices of Jeffrey Lichtman have successfully handled countless federal bank fraud cases, exploiting holes in the prosecution's evidence to achieve the best possible result for our clients. Contact us today at (212) 581-1001 for a free consultation.