What Is Bank Fraud, and How Harsh Is The Penalty?

Band fraud occurs when someone steals money from a bank or other financial institution using fake information, pretexts, and deception. The United States Code, Section 1344, has a definition of bank fraud. According to this law, someone commits bank fraud if they intentionally carry out or attempt to carry out a scam to rob a bank or other financial institution. 2 Use false pretences, promises, or representations to obtain money, credit, assets, or securities Because there is no threat of harm or physical violence involved, bank fraud differs from bank robbery. The US Secret Service looks into every instance of bank fraud. Not just banks and related financial entities are affected by bank fraud. Several additional organisations that may be engaged in a bank fraud investigation.

Types of Bank Fraud

• Accounting Fraud

Accounting fraud primarily affects business lending. Businesses that commit accounting fraud “cook the books,” so they look more profitable on paper than they really are. Based on these fraudulent statements, banks grant loans to these businesses. Still, ultimately, because the companies are less profitable than they’ve claimed – or sometimes even insolvent, they can’t repay the loans. Some may even declare bankruptcy, leaving the banks on the hook.

• Loan Fraud

Similar to accounting fraud is loan fraud. This fraud can be committed by both businesses and individuals, either of whom may lie on a credit application to receive a greater amount of money than they could ever possibly repay. Another type of loan fraud involves stealing someone’s identity to take out a loan and proceeding as if their financial information is the fraudster’s information.

• Wire Transfer Fraud

Wire fraud includes all cases of fraud involving wire transfers or the internet. In some cases, the scammers steal the username and password of a banking customer and then wire money to themselves. A more common method involves the scam artist convincing the victim to wire money to them by claiming to be someone in desperate need and then asking for money for a personal or business need.Visit https://www.glozmanlaw.com/2022/11/what-is-bank-fraud-and-how-severe-is-the-punishment/ for a consultation.