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Financial Institution Fraud

Financial institution fraud is a term used to describe fraudulent activity that occurs within or against a federally regulated financial institution. Financial institution fraud encompasses a wide variety of activities, some of which, a person may not even know are unlawful, so if you are being investigated for fraud involving a bank, credit union, or other type of financial institution, it is critical to contact an experienced white collar crime attorney who can help protect your interests.

What Constitutes a Financial Institution?

A person can be charged with financial institution fraud if he or she participates in fraudulent activity against one of the following types of financial institutions:

  • An insured depository institution, such as a savings or commercial bank;
  • A credit union with accounts insured by the National Credit Union Share Insurance Fund;
  • A Federal home loan bank or a member of the Federal home loan bank system;
  • A Farm Credit System institution;
  • A small business investment company;
  • A bank holding company or a savings and loan holding company;
  • A Federal Reserve bank or a member bank;
  • A branch or an agency of a foreign bank; and
  • A mortgage lending business or any person or entity that provides federally regulated mortgage loans.

Federal Law

In 1989, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which was aimed at combating financial institution fraud. Essentially, the law amended a series of criminal statutes, including those penalizing mail and wire fraud, if an offense affected one of the aforementioned financial institutions. A court’s determination that a person committed fraud against a financial institution has serious repercussions. For instance, those convicted under the federal statute risk suffering fines of up to $1,000,000. Furthermore, cases that fall under federal jurisdiction have a ten year statute of limitations.

Examples of Financial Institution Fraud

Federal law covers a wide range of fraudulent activity, including:

  • Commercial loan fraud;
  • Check fraud;
  • False applications;
  • Mortgage fraud;
  • Check kiting; and
  • Counterfeit negotiable instruments.

In fact, some courts have found defendants guilty of committing financial institution fraud even when the target was a person and not the bank itself. For example, a person commits what is often referred to as external financial institution fraud when he or she has no affiliation with a bank, but impersonates someone who does have an account at a specific bank, uses another’s debit card without authorization, or cashes stolen or counterfeit checks. Employees who use their access to customer accounts or their knowledge of a company’s policies to commit fraud can also be tried under FIRREA for internal financial institution fraud.

Call an Experienced White Collar Crime Attorney Today

Being convicted of committing fraud against a financial institution can have devastating consequences, which makes it especially important for those who have been accused of fraudulent activity to contact an experienced attorney as soon as possible. If you live in south Florida and are being investigated for a white collar crime, please call Jeffrey S. Weiner, P.A., Criminal Defense Attorneys at (305) 670-9919 today.




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