Bank Fraud Defense Lawyer

Bank fraud, 18 U.S.C. § 1344, is charged wherever a financial institution sits somewhere in a transaction. Mortgage applications, business lines of credit, cheque and deposit activity, loan modifications, merchant accounts, and wire transfers routed through an insured bank all bring the statute into play, and prosecutors reach for it because it carries heavier exposure than the general fraud provisions.

It also travels with company. Bank fraud counts are routinely paired with wire fraud under 18 U.S.C. § 1343, mail fraud under 18 U.S.C. § 1341, conspiracy under 18 U.S.C. § 1349 or § 371, and, where another person’s identifying information was used, aggravated identity theft under 18 U.S.C. § 1028A, which carries a mandatory term that runs consecutively to everything else. Law Offices Of SRIS, P.C. has been practicing since 1997, and Mr. Sris brings a background in accounting and information systems from George Mason University, applied to complex financial and technology-related cases. To discuss a bank fraud matter, request a consultation at (888) 437-7747.

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The Two Prongs

Section 1344 is written in two parts, and which one the government charges shapes the whole case. The first prong covers knowingly executing or attempting to execute a scheme to defraud a financial institution. The second covers a scheme to obtain, by false or fraudulent pretences, representations, or promises, money, funds, credits, assets, securities, or other property owned by or under the custody or control of a financial institution.

The distinction matters because the second prong does not require that the bank itself be the intended victim. Property merely under a bank’s custody or control can suffice, which sweeps in schemes where the loss fell on a customer, a title company, or an investor rather than on the institution.

Prosecutors frequently charge both prongs in the alternative. Reading which is actually pleaded, and whether the evidence supports it, is the first analytical step, because the intent the government must prove is not identical under each.

What Counts as a Financial Institution

The term is defined by statute and it is broader than the ordinary meaning. It reaches federally insured banks and credit unions, and it extends to certain other entities including federal reserve banks, mortgage lending businesses, and institutions with federally insured deposits.

Federal jurisdiction usually rests on that insured status, which means it is an element the government must establish rather than an assumption. In practice it is proved by certificate or testimony and is rarely contested successfully, but where the entity involved is a private lender, a mortgage broker, a fintech platform, or a servicer rather than an insured depository, the question is genuinely open and worth examining.

Where the entity does not qualify, the count fails, though the government will usually have charged wire or mail fraud in the alternative.

How these investigations begin is worth understanding, because it explains what the government already holds. Many originate with the institution rather than with law enforcement: a suspicious activity report, an internal audit finding, a fraud unit referral, or a repurchase demand from a secondary market purchaser. By the time agents make contact, the bank has usually assembled and produced its own file, including underwriting notes and internal correspondence a defendant has never seen.

That has a practical consequence. The institution is not a neutral custodian in these matters; it has its own exposure, its own regulator, and its own interest in characterising the transaction as a fraud perpetrated on it rather than as a failure of its own underwriting. Obtaining the complete file, rather than the portion the government received, is frequently where a defence begins.

Intent, and What Makes These Cases Contestable

The intent to defraud is where bank fraud cases are decided, as in every fraud prosecution. The statute requires knowing execution of a scheme, and the same conduct frequently admits of an innocent reading.

Mortgage and loan cases illustrate the point. An overstated income figure on an application may reflect deliberate misrepresentation, a broker completing forms without the applicant’s knowledge, reliance on a professional who said the figure was acceptable, or genuine confusion about what the form was asking. Whether the applicant read what was submitted, who prepared it, and what they were told about it are all live questions.

Good faith is a complete defence. Reliance on the advice of counsel, an accountant, or in these cases frequently a broker or loan officer, sought in good faith on full disclosure and followed, operates through the same element. Establishing it depends on the contemporaneous file rather than on later recollection.

Materiality is also an element in substance: a misstatement incapable of influencing a reasonable lender’s decision is not material, and in cases involving loans that were approved on other grounds, or where the institution’s own underwriting disregarded the disputed figure, that argument has real content.

Exposure

The statutory maximum for bank fraud is set by the current text of § 1344 and should be confirmed against the statute with counsel for the specific charge. It is materially higher than the general fraud provisions, which is why prosecutors prefer it where a financial institution is involved.

What determines an actual sentence is the advisory Sentencing Guidelines range, driven principally by the loss amount and adjusted for the number of victims, sophisticated means, the defendant’s role, abuse of a position of trust, obstruction, and whether the offence substantially jeopardised the safety and soundness of a financial institution. That last adjustment is specific to this area and can be significant.

Where a § 1028A count is charged alongside, it carries a mandatory term that runs consecutively to any sentence on the underlying counts, which changes the arithmetic of any resolution entirely. Restitution and forfeiture attach separately.

Collateral consequences run on their own tracks and frequently matter more than the custodial exposure. Loan originators, brokers, appraisers, and bank employees face licensing and registration proceedings that can open on a charge rather than a conviction. Noncitizens face immigration consequences that turn on the offence of conviction rather than on the sentence. And anyone whose work touches federally related lending faces eligibility questions decided by authorities applying their own standards on their own schedules.

How These Cases Are Defended

Bank fraud prosecutions are documentary. The defence is built from the loan or account file, the application and its drafts, correspondence with the broker or loan officer, underwriting notes, appraisals, and the institution’s own records of what it relied on.

The loss theory is examined immediately, because loss drives the range. Where the property was collateralised, credits for the value of the collateral matter. Where a loan performed for years before default, causation is contestable. Where the institution’s underwriting was independently deficient, that bears on both materiality and loss.

The financial institution element is checked rather than assumed, particularly where a non-depository lender or servicer is involved. And in the Eastern District of Virginia all of this runs against a compressed schedule, since the Speedy Trial Act, 18 U.S.C. § 3161, sets a 70-day period within which trial must ordinarily begin after indictment or initial appearance, whichever is later, subject to excludable periods and continuances granted on findings.

Frequently Asked Questions

What is bank fraud?

An offence under 18 U.S.C. § 1344 committed by knowingly executing or attempting to execute a scheme to defraud a financial institution, or a scheme to obtain money, funds, credits, assets, securities, or other property owned by or under the custody or control of a financial institution by false or fraudulent pretences. Both prongs are frequently charged in the alternative.

Does the bank have to lose money?

No. The statute reaches attempts as well as completed schemes, and under the second prong the property need only be owned by or under the custody or control of a financial institution, so the loss can have fallen on a customer, a title company, or an investor. Loss matters decisively at sentencing rather than at conviction.

What counts as a financial institution?

The term is defined by statute and is broader than ordinary usage, reaching federally insured banks and credit unions and extending to certain other entities including mortgage lending businesses. Insured status is an element the government must establish. Where the entity is a private lender, broker, servicer, or platform rather than an insured depository, the question is genuinely worth examining.

What is the maximum sentence for bank fraud?

The ceiling is set by the current text of 18 U.S.C. § 1344 and is materially higher than the general fraud provisions. Confirm the figure against the statute with counsel for your specific charge. In practice the advisory Guidelines range, driven principally by loss, determines the sentence, and any § 1028A count adds a mandatory consecutive term on top.

I did not fill in the application myself. Does that help?

It can matter a great deal. The statute requires knowing execution of a scheme, so who prepared the application, whether you reviewed what was submitted, and what a broker or loan officer told you about the figures all go to intent. Reliance on a professional, sought in good faith on full disclosure and followed, can negate the required intent entirely.

Why is there an identity theft count as well?

Aggravated identity theft under 18 U.S.C. § 1028A is charged where another person’s means of identification was used during and in relation to a listed offence, and bank fraud qualifies. It carries a mandatory term that runs consecutively to the sentence on the underlying counts, which is why its presence changes the arithmetic of any resolution discussion.

Can a bank fraud case be resolved before charges?

Sometimes. These matters are frequently investigated for long periods before indictment, often beginning with a bank’s own suspicious activity reporting, and that window is when declination advocacy or a negotiated resolution is realistically available. It is also when the loan file can still be assembled independently. No outcome can be promised in any particular matter.

Working With Law Offices Of SRIS, P.C.

Bank fraud cases are decided on the loan or account file: who prepared the application, what the institution actually relied on, and whether the disputed figure could have influenced the decision. Establishing the financial institution element and testing the loss theory early is where the value sits.

Mr. Sris, Owner and Founder of Law Offices Of SRIS, P.C., is a former prosecutor and is admitted in Virginia, Maryland, the District of Columbia, New Jersey, and New York. The firm has been practicing since 1997. Mr. Sris and the firm’s Of Counsel attorneys handle criminal defense matters across those jurisdictions, which matters in federal practice because a single investigation frequently reaches conduct, witnesses, and records in more than one state. Mr. Sris brings a background in accounting and information systems from George Mason University, applied to complex financial and technology-related cases.

The firm serves Northern Virginia from 1655 Fort Myer Dr, Suite 700, Room 719, Arlington, VA 22209 and central Virginia from 7400 Beaufont Springs Drive, Suite 300, Room 395, Richmond, VA 23225. By appointment. Call (888) 437-7747 to schedule. Request a consultation. Reach our location at (888) 437-7747.

This page provides general information about federal bank fraud under 18 U.S.C. § 1344 and does not create an attorney-client relationship. Case results depend on a variety of factors unique to each case. Results may vary.

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A bank fraud case is one part of a wider federal practice, and our page on federal criminal attorney covers how federal matters are handled.