Bank Fraud

Southern Wesleyan University Business Law MGMT 3203Professor Patri CabeChad Stewart

Section 1344 of Title 18, United States Code

Section 1344 of Title 18, United States Code, covers any scheme to defraud occurring on or after October 12, 1984. The statutory language is modeled directly after the mail fraud statute. It proscribes 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 institutions protected by the 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 (826. Applicability of 18 U.S.C. § 1344, n.d.).

Federal Deposit Insurance Corporation (FDIC)18 USCS, § 1344

Whoever knowingly executes, or attempts 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 of fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both (FDIC Law, Regulations, Related Acts - 8000 - Miscellaneous Statutes and Regulations, 2014).

Bank Fraud, the Law, and Business Impacts

• Illegal because it is deceptive to others.

• The cost of bank fraud is passed to the consumer.

• Bank fraud is a billion dollar industry that affects every financial institution (Fraud against financial institutions, n.d.)

• Online attacks against business accounts are growing and there is no clear line for liability (Rajagopal, 2014).

• When problems arise businesses expect that their respective banks will resolve the issues, but this is often not the case leaving businesses with the burden (Rajagopal, 2014).

Biblical Perspective

“For the love of money is at the root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs” (1 Timothy 6:10, New International Version).

References

826. Applicability of 18 U.S.C. § 1344. (n.d.). Retrieved from https://www.justice.gov/usam/criminal-resource-manual-826- applicability-

18-usc-1344FDIC Law, Regulations, Related Acts - 8000 - Miscellaneous Statutes and

Regulations. (2014, April 20). Retrieved from https://www.fdic.gov/regulations/laws/rules/8000-1250.htmlFraud against financial institutions. (n.d.). Retrieved from http://www.criminalfraud.com/bank-fraud.phpRajagopal, R. (2014, July 15). Don't let your business pay the price for

bank fraud. Retrieved from http://www.forbes.com/sites/groupthink/2014/07/15/dont-let-your-business-pay-the-price-for-bank-fraud/#5c6fb78729b8