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Bank fraud is one of the most serious federal financial crimes. It carries a maximum of 30 years in federal prison and a $1,000,000 fine per count, and the government has 10 years to bring charges. If you are being investigated or have been charged, it is important to understand exactly what the government must prove.
Vikas Bajaj represents people under investigation or charged under 18 U.S.C. § 1344 and related statutes, and that work often begins before any charge is filed, when there may still be room to explain the documents to the agents and prosecutors.
Understanding Bank Fraud Charges
Legal Definition of Bank Fraud: 18 U.S.C. § 1344
Under 18 U.S.C. § 1344, it is a federal crime to knowingly execute, or attempt to execute, a scheme or artifice (1) to defraud a financial institution, or (2) to obtain any of the moneys, 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.
“Financial institution” is defined in 18 U.S.C. § 20. It includes FDIC-insured banks, federally insured credit unions, and several other categories, including mortgage lending businesses and persons or entities that make federally related mortgage loans.
Elements Prosecutors Must Prove
- A scheme to defraud a financial institution, or to obtain money or property owned by or in the custody or control of a financial institution through false or fraudulent pretenses, representations, or promises;
- That the person acted knowingly and with the required intent;
- That the false representations, if any, were material; and
- That the institution meets the federal definition of a financial institution.
Intent is frequently the central issue. Mistakes on paperwork, optimistic projections, and disputes about loan terms are not the same as a knowing scheme.
False Statements to Lenders: 18 U.S.C. § 1014
Bank fraud is often charged together with 18 U.S.C. § 1014, which makes it a crime to knowingly make any false statement or report, or to willfully overvalue land, property, or security, for the purpose of influencing the action of a listed lender or agency on an application, advance, loan, commitment, guarantee, or related request. The list includes FDIC-insured institutions, federally insured credit unions, Federal Reserve banks, the Small Business Administration, mortgage lending businesses, and others. The maximum penalty is also 30 years and $1,000,000.
In Thompson v. United States, 604 U.S. 408 (2025), the Supreme Court held that § 1014 does not criminalize statements that are misleading but not false. Whether a statement was actually false, as opposed to incomplete or open to interpretation, can therefore be decisive in a § 1014 case.
Common Types of Bank Fraud Cases
- Loan and credit applications: allegedly false income, asset, employment, or ownership information
- Mortgage transactions: occupancy, straw buyers, appraisals, and down payments (see mortgage fraud defense)
- Pandemic-relief loans: PPP loans were made through private lenders, many of them FDIC-insured, so § 1344 and § 1014 often appear in PPP loan fraud cases
- Check fraud and check kiting: deposits of altered, counterfeit, or unfunded checks
- Account takeover and identity misuse: often charged with identity theft or aggravated identity theft
- Insider cases: allegations against bank employees or officers
Penalties and Consequences of Bank Fraud
- Up to 30 years in federal prison per count under § 1344 or § 1014;
- Fines up to $1,000,000 per count;
- The same 30-year/$1,000,000 maximum for mail or wire fraud that affects a financial institution (mail and wire fraud);
- Restitution, forfeiture, and supervised release;
- Collateral consequences: licensing, employment in financial services, and immigration consequences for non-citizens.
These are statutory maximums. Actual sentences in federal court are usually driven by the Sentencing Guidelines, where loss amount under §2B1.1 plays a major role (U.S. Sentencing Commission).
Statute of Limitations
Under 18 U.S.C. § 3293, the government has 10 years to indict for violations of, or conspiracies to violate, § 1344 and § 1014, and for mail or wire fraud that affects a financial institution. For most other federal crimes the period is five years.
Bank Fraud Cases in the Southern District of California
In San Diego and Imperial Counties these cases are charged in federal court; see how federal cases move through the Southern District of California. Bank fraud investigations may begin with bank investigators who refer matters to law enforcement. In a pandemic-loan case that included bank fraud counts, the FBI, IRS Criminal Investigation and the SBA Office of Inspector General investigated, according to a Department of Justice release dated November 16, 2021 on the sentencing of Richard Ayvazyan and co-defendants in the Central District of California.
Federal Cases Nationwide
Bank fraud and false-statement-to-lender cases are investigated and charged in districts across the country, and the agents and Department of Justice prosecutors on a case may be far from where the borrower lives or the transactions took place. Early contact is the same work in any district: counsel can reach the case agents and the Department of Justice prosecutors handling the matter, learn what can be learned about the person’s status, and address subpoenas, lender inquiries, target letters, and interview requests before a charging decision is made.
Strategic Defense Against Bank Fraud Charges
Challenging Intent
The government must prove a knowing scheme. Reliance on accountants, brokers, or loan officers; unclear forms; and honest errors are common themes.
Was the Statement False and Material?
After Thompson, a § 1014 charge requires a false statement, not merely a misleading one. For bank fraud under § 1344, the government must also prove materiality (Neder v. United States, 1999); § 1014 has no materiality element (United States v. Wells, 1997).
Is the Lender a “Financial Institution”?
Not every lender meets the federal definition. The institution’s status at the time of the conduct must be proved.
Analyzing Financial Evidence and Loss
Bank records, loan files, and underwriting standards often tell a more complicated story than the government’s summary. Loss calculations, collateral, and repayments matter at sentencing.
Identity and Attribution
In account-takeover and identity cases, the defense may show that someone else was responsible for the transactions.
Procedural and Constitutional Issues
Search warrants, subpoenas, and statements are reviewed for legal defects that may support suppression.
Why Early Representation Matters
Bank fraud cases are often built quietly from bank records and loan files, then presented to a grand jury. If you receive a target letter or grand jury subpoena, or a bank or agent contacts you about a loan, counsel can often engage before charges are filed.
Frequently Asked Questions (FAQs)
Q: What is the penalty for federal bank fraud?
A: Up to 30 years in prison and a fine of up to $1,000,000 per count under 18 U.S.C. § 1344. Restitution and forfeiture may also apply. Actual sentences depend on the facts and the Sentencing Guidelines.
Q: What is 18 U.S.C. § 1014?
A: It prohibits knowingly making false statements, or willfully overvaluing property, to influence a listed lender or agency, including FDIC-insured banks and the SBA, on a loan or similar application. It also carries up to 30 years and $1,000,000.
Q: Is a misleading statement on a loan application a crime under § 1014?
A: Generally not, if the statement is actually true. In Thompson v. United States (2025), the Supreme Court held § 1014 does not criminalize statements that are misleading but not false, though context can bear on whether a statement was false. Other statutes may still be considered, so the facts matter.
Q: How long does the government have to bring bank fraud charges?
A: Ten years for bank fraud, § 1014 false statements, and mail or wire fraud affecting a financial institution, under 18 U.S.C. § 3293.
Q: Can PPP loan fraud be charged as bank fraud?
A: Yes. Because PPP loans were issued through private lenders, prosecutors have charged § 1344 and § 1014 along with wire fraud. Congress also set a 10-year limitation period for PPP borrower fraud.
Q: Are all bank fraud cases federal?
A: Section 1344 is federal. Similar conduct can also be charged under California law, and some cases are handled in state court. The forum affects procedure and sentencing.
Q: When should I contact a lawyer?
A: As soon as you learn of an investigation, ideally before speaking with agents or bank investigators.
Is credit or debit card fraud the same as bank fraud?
Not always. Using a stolen or counterfeit card is usually charged under California’s access card laws (Penal Code § 484g), or federally as access device fraud (18 U.S.C. § 1029). Bank fraud under § 1344 requires a scheme to defraud a financial institution or obtain its funds by false pretenses.
Can a Zelle or ATM transfer lead to bank fraud charges?
It can if prosecutors allege a scheme to take money held by a bank, for example through deposited fake checks followed by withdrawals. The questions are usually intent and who actually made the transactions.
Protect Your Future Today
If you are under investigation or facing bank fraud or loan fraud charges, contact the Law Office of Vikas Bajaj, APC. Call (619) 525-7005 or request a confidential consultation.
This page is attorney advertising and general information, not legal advice. Every case turns on its own facts.