10 THINGS YOU SHOULD KNOW ABOUT BANK FRAUD CHARGES

Are you facing federal bank fraud charges or related federal fraud offenses? You need to take these charges seriously. While there is a common misconception that federal charges are not as serious as state charges, we must emphasize that the opposite is often true in terms of the potential consequences of a conviction. When it comes to bank fraud charges, a conviction can result in decades in prison and a fine of up to one million dollars. You might not even realize the mistake you made constitutes a federal crime. Our experienced North Carolina federal bank fraud defense attorneys know how critical it is to beat these charges, and we want to ensure that you understand the seriousness of the offense you are facing and the severity of the punishment if you are convicted.

1. The Federal Bank Fraud Act Defines the Elements of Federal Bank Fraud Charges in the United States

Bank fraud charges in the United States are brought under the Federal Bank Fraud Act, which is a law that was passed as a part of the Comprehensive Crime Control Act in 1984. The law is codified at 18 USC § 1344 and defines federal bank fraud and who can be prosecuted under federal law. The law criminalizes knowingly executing, or attempting to execute, a scheme or artifice:

• To defraud a financial institution; or
• To obtain any of the money, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations or promises.

According to federal courts that have interpreted the statute, there are three general elements the prosecution must prove in order to convict a person who has been charged with federal bank fraud, which include the following:

• Knowingly;
• Executing or attempting to execute a scheme or artifice; and
• Defrauding, or obtaining money from a financial institution through fraudulent representation.

To be clear, for the prosecution to convict a person of bank fraud, they must be able to show intent—that is where the “knowingly” element comes into play. If the prosecution cannot prove that you intended to defraud, you may be able to beat the bank fraud charges. However, a lack of intent does not mean that the state or federal government cannot charge you with any criminal offense. Indeed, there are related financial offenses that do not require intent or the “knowingly” element of the crime.

2. Bank Fraud is a Federal Crime with Federal Penalties

The specific charge of bank fraud is a federal crime that comes with federal penalties. As we noted above, although some people are under the misconception that federal offenses are not as serious as state criminal offenses, or that federal offense are not treated as seriously as state criminal offenses, we want to dispel those misconceptions. Federal crimes are extremely serious and carry steep federal penalties.

In situations in which a person is facing federal bank fraud charges in addition to related North Carolina state criminal charges (which we will discuss in more detail below), that person can face both federal and state penalties upon conviction.

3. Bank Fraud Penalties are Severe

If you are convicted of federal bank fraud charges, the federal criminal penalties are steep. Indeed, the statute states that a person convicted can face up to a $1,000,000 fine and 30 years of imprisonment.  While a sentence of up to 30 years is not by definition a life sentence, it is critical to keep in mind that 30 years of imprisonment can be a life sentence for someone who is convicted of federal bank fraud charges.

Beyond the criminal penalties that can be assessed, a federal bank fraud conviction can also affect your social life and your economic standing even after you have served your sentence. If you are convicted and are able to continue employment upon your release, having a federal criminal bank fraud conviction on your record can affect your ability to obtain various forms of employment, especially those that require you to handle money or to perform any sort of fiduciary duty or responsibility.

4. You May Face State Law Charges in Connection with the Alleged Acts That Led to Bank Fraud Charges

While bank fraud charges are federal, there are a wide variety of state criminal charges in North Carolina related to bank fraud charges that in some cases may be charged in conjunction with federal bank fraud charges. Examples of some of those North Carolina state offenses include but are not limited to the following:

• Writing worthless checks, which can be charged as a felony offense if the worthless check is for more than $2,000 (N.C. Gen. Stat. § 14-107);
• Financial transaction card fraud, which includes any unauthorized use of someone else’s credit or debit card, or making false statements in connection with your credit or debit cards (N.C. Gen. Stat. § 14-113.13); or
• Computer crimes involving defrauding or extorting money, which can include hacking in relation to an attempt to defraud another person (N.C. Gen. Stat. § 14-453).

5. Bank Fraud Laws are Closely Modeled on Federal Mail Fraud Laws

The U.S. Department of Justice explains that the statutory language for federal bank fraud charges “is modeled directly after the mail fraud statute” in that “it prescribes the use of a scheme or artifice either to defraud a federally chartered or insured financial institution or to obtain any of the monies, funds, credits, assets, securities, or other property owned by, or under the control of, such an institution.” The financial institutions that are protected by the federal bank fraud statute “are those chartered under the laws of the United States or insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation (now defunct), or the National Credit Union Administration.”

It is important to know that the statute is modeled on the mail fraud statute because that information makes clear that a person’s alleged acts ultimately may lead to mail fraud and wire fraud charges in addition to bank fraud charges.

6. Federal Bank Fraud Charges are Designed to Apply to a Wide Variety of Cases

Beyond the possible additional charges of mail fraud and/or wire fraud in a federal bank fraud case, depending upon the specific facts and circumstances surrounding an investigation and arrest, it is critical to know that federal bank fraud charges are broad and flexible. Indeed, these charges are designed to apply to a wide variety of cases. According to the DOJ, “the general bank fraud statute should be viewed as a supplement to, rather than a substitute for, other criminal provisions related to fraud perpetrated on insured financial institutions.”

7. Federal Bank Fraud Charges in Conjunction with Related Federal Crimes

To be clear, federal bank fraud charges are often brought in conjunction with similar and related federal charges. Examples of other federal criminal charges that are commonly associated with bank fraud charges include but are not limited to:

• Bank robbery;
• Extortion;
• Computer fraud and computer hacking;
• Wire fraud;
• Email fraud;
• Mail fraud;
• Mortgage fraud; and
• Identity theft.

8. Bank Fraud is Often Described as a White-Collar Crime

Bank fraud, and other related federal fraud offenses, are often described as white-collar crimes. Some people erroneously believe that white-collar crimes are less serious or come with lesser penalties than blue-collar or violent criminal offenses.  Yet as we have clarified, bank fraud and similar white-collar criminal offenses should be associated with particularly severe penalties in the event of a conviction.  Indeed, federal agencies emphasize that white-collar crime is not a victimless offense and is in fact the opposite, meaning that serious consequences follow a bank fraud conviction or other white-collar offense.

The Federal Bureau of Investigation underscores the seriousness of federal bank fraud charges and other white-collar offenses in its description of white-collar crime:

“Reportedly coined in 1939, the term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage . . . .

These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three). Today’s fraud schemes are more sophisticated than ever, and the FBI is dedicated to using its skills to track down the culprits and stop scams before they start.”

9. Multiple Defense Strategies May be Available to Fight Federal Bank Fraud Charges

Given the seriousness of federal bank fraud charges and the severity of potential penalties in the event you are convicted, it is important to begin working with an experienced North Carolina bank fraud defense attorney as soon as you can. The sooner you begin working with an aggressive federal criminal defense attorney who handles bank fraud charges, the better your chances are of avoiding a conviction. Your defense strategy will depend on the circumstances of your case and the facts leading up to your arrest and charging; but in the meantime, you can learn more about the possible defense strategies that could be applicable to your case.

When it comes to bank fraud defenses, multiple defense strategies may be presentable in your case, such as:

• No intent (as we discussed above, the first essential element of any bank fraud charge is intent, or the need for the prosecutor to prove that you “knowingly” engaged in behavior that constitutes bank fraud, which means that proving you did not intend to defraud a financial institution, even if that was the outcome, can help your case);
• Duress (if you can prove that you committed bank fraud under duress, you may be able to have the charges against you dropped); or
• Fraudulent representations were not material (if you can show that any fraudulent representations you made were immaterial to the financial institution, you may be able to beat the charges).

10. Do Not Expect to Have Your Conviction Sealed or Expunged

While certain state offenses and convictions in North Carolina may be eligible for expunction or record sealing (a method of erasing an arrest or criminal charges or hiding a criminal record from the public), you should not expect to have federal bank fraud charges or a conviction expunged or sealed. To be clear, there is no federal statute for expunction, which means there is no straightforward process for which a person who has been convicted of a federal offense, like bank fraud, can have his or her record expunged. Even when it comes to record sealing, there is no statute that allows federal criminal records to be sealed following a valid conviction.

Although federal judges may have the power to expunge or seal a federal criminal record in some cases, this is not a power that judges frequently use, and anyone who is facing federal bank fraud charges should not expect, under any circumstances, that their record will be eligible for expunction or sealing. Instead, anyone facing charges should assume that their federal criminal record will be permanent for all intents and purposes. As such, it is absolutely critical to work with a federal criminal defense lawyer to build the strongest possible defense to bank fraud charges.

Contact a Federal Bank Fraud Defense Attorney to Help You Fight These Charges

When you are facing federal bank fraud charges, you need to have an experienced federal bank fraud defense attorney on your side. Our North Carolina federal criminal defense lawyers are here to speak with you today about your case and to discuss potential defense strategies based on the facts surrounding your arrest. Contact The Marcilliat & Mills PLLC to learn more about how our firm can assist you with building a strong defense when you are facing bank fraud charges under federal law or related criminal charges under North Carolina law.