Why Is the Punishment for Bank Fraud So Harsh?

 Posted on August 06, 2021 in Fraud

The Justice Department recently indicted 10 men from the Chicago area on bank fraud charges. According to a press release issued by the department, the men allegedly deposited the counterfeit money orders, which were issued by the U.S. Postal Service, into bank accounts they had access to and then immediately withdrew the money. The indictments allege that the men committed fraud by altering the money orders, changing them from $10 to a higher sum, typically $800 or $1,000, and then depositing the fraudulent amounts. In all, the men allegedly defrauded more than $1 million from various banks.

For many, a couple of things might jump out in this case. First, the alleged crime was investigated by the U.S. Postal Inspection Service. Although you rarely hear about the Postal Inspectors, they are actually one of the oldest federal law enforcement agencies in the U.S. Like the FBI, they have the power to enforce a wide range of federal laws, but the crimes usually have to somehow involve the Postal Service.

The other part is the severity of the punishment. The defendants, in this case, are being accused of bank fraud and not a crime of violence, yet if they are convicted, each individual could face up to 30 years in prison and up to $1 million in fines. Now, you might be wondering: why is the punishment for bank fraud so harsh?

Bank Fraud in the U.S.

Under federal law, bank fraud has a very short yet very broad definition. You commit bank fraud when you try or actually do “defraud a financial institution,” and federal law lists multiple ways in which a bank can be defrauded. Many of the laws outline the misuse of checks or other payment options.

Additionally, the U.S. Supreme Court ruled in a 2014 case that the government does not need to prove intent in a bank fraud case. All prosecutors have to do is show that a crime involved a bank account. They do not have to show that the bank suffered a loss.

A partial explanation for the seriousness of bank fraud is that banks play a major role in the economy. Another factor is that banks are insured by the federal government. Additionally, some cases have resulted in serious financial harm to individuals.

Therefore, the United States Sentencing Guidelines, which were created to ensure equity in the justice system, permit such harsh punishments.

Contact a Chicago, IL Federal Criminal Defense Lawyer

Bank fraud carries harsh and sometimes extreme punishments, so if you are accused of bank fraud or other financial crimes, you should contact an experienced Chicago federal criminal defense attorney. Hal M. Garfinkel, of the Law Offices of Hal M. Garfinkel, has worked on both sides of the criminal legal system as a prosecutor and a defense attorney. Contact our office today at 312-629-0669 today for a free consultation.

Sources:

https://www.justice.gov/usao-ndil/pr/ten-chicago-area-residents-charged-bank-fraud-schemes-involving-counterfeit-postal

https://www.law.cornell.edu/uscode/text/18/1344

https://www.oyez.org/cases/2013/13-316

https://www.fdic.gov/regulations/laws/rules/8000-1250.html

https://www.ussc.gov/guidelines