Banks are an incredibly important part of our society. They help individuals and businesses make investments, provide a safe place to house their earnings, and keep their finances straight.
While most people only have one bank account, others have several bank accounts open at one time, and can even involve multiple banks. Regardless of whether it is a traditional bank or an online bank, both types are vulnerable to bank and check fraud schemes. When a bank is in the middle of a fraud case, everyone else who uses that bank suffers, as the trust in the institution begins to waiver.
However, innocent mistakes can make an individual appear to be guilty of bank or check fraud. If you find yourself being accused of committing bank or check fraud, then you will want to have an experienced white-collar criminal defense attorney on your side. The attorneys at Gebhardt & Eppes can help you build a strong defense to show your innocence and either get your case completely dismissed or have your charges lowered. Here is more information about our bank and check fraud defense services.
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What Is Bank Fraud?
Under the federal statute 18 U.S. Code Section 1344, bank fraud is when an individual knowingly executes, or attempts to execute, a scheme to do the following:
- To defraud a financial institution
- Obtain any of the money, funds, credits, assets, securities, or other property owned by, or that is under the custody/control of a financial institution. (This can be done by using false or fraudulent pretenses, representations, and/or promises.)
Does Texas Have a Statute Against Bank Fraud?
While Texas does not have a specific statute that targets bank fraud, it does have a statute against fraud in general, which includes bank fraud. Texas State Law under Penal Code 32.01 defines fraud as the purposeful deception of a financial institution for personal gain or profit.
What Are Common Examples of Bank Fraud?
Both federal and state bank fraud cases encompass a wide range of other criminal activities. Some of the most common examples include the following actions:
- Check Kiting: Also known as flagging, check kiting is a form of check fraud. It uses the float, which is the time it takes for a check to clear, to make use of non-existent money in a checking account.
- Check Forging: Check forging is when the drawer’s signature is forged or unauthorized. This causes the drawee bank to pay the forger and therefore makes them responsible for the resulting loss of the victim.
- The Use of Stolen Checks: While the individual who stole your check may not be the ones cashing in, they may sell your checks on the dark web marketplaces. These checks are considered “glass” and can go for as much as $250. Individuals buy these checks to learn personal information, such as bank account numbers and social security numbers.
- Credit Card Fraud: Credit card fraud is a form of identity theft in which an authorized person takes control of another’s credit card information to charge that account or remove funds from it.
- Diversion of Bank Funds By Bank Employees: Known as a revenue diversion scheme or embezzlement, this type of crime is considered theft. It involves an employee diverting some or all of the funds taken in by the bank to another personal account for them to then use the money for themselves.
- Making False Statements on Loan Applications: Making a false statement on a loan application can result in the bank handing out more money than an individual can pay back.
Oftentimes, these charges will also include additional charges for other crimes, such as embezzlement, identity theft, bribery, and mail or wire fraud.
What Are the Penalties for Bank Fraud?
If you are convicted of bank fraud in Texas, the penalties can be severe. Penalties for this crime are jail sentences of up to 30 years and fines of up to $1 million.
On top of these penalties, individuals who are convicted of bank fraud can also face restitution, in which they have to pay the victim of fraud the value of assets they lost due to the crime.
These penalties often follow individuals convicted of this crime for life. Not only does having a criminal record harm your chances of being able to find a job, but the financial penalties can cripple an individual for life. It is important to have an experienced bank fraud defense attorney on your side to help you navigate the legal system.
What Are the Possible Bank Fraud Defenses in Texas?
Many possible defenses can help you show your innocence in a bank fraud case. It is important to have a bank fraud defense attorney on your side who knows which defense works best for your case. Here are some of the common defenses that are used in these types of cases:
- There is a lack of intent: Honest mistakes happen, especially when filling out an application for a loan. These types of mistakes do not qualify as a crime and should not cause the accused to be punished. However, the prosecutors often don’t take the defense’s word for it, which is why a defense attorney is needed to provide evidence.
- There is a lack of evidence: If there is little to no evidence that points to the accused having committed the crime, then the case can get thrown out. The prosecution has the burden of proof to show that the accused truly did commit the crime.
- The accused was under duress: While it is rarer for this defense to stand up in financial crimes, such as bank fraud, it does happen. Duress defenses involve evidence that the crime the accused committed was due to threats of violence or harm from an outside party.
- Constitutional violations: The Fourth Amendment of the United States Constitution protects individuals from unlawful searches or seizures by the government. If the authorities seized your property or searched your home without a warrant, this is a blatant violation of these rights. Having a defense attorney on your side can ensure that any evidence they discover from this illegal procedure will get thrown out.
What Is Check Fraud?
Checks are a convenient method of payment that allows individuals to pay another person or entity for goods or services rendered without the use of cash. However, it is a serious crime when that check bounces or is found to be a part of a scheme to use the money on false pretenses or steal someone else’s personal information.
Examples of Check Fraud
Common examples of check fraud are as follows:
Insufficient Check Charges
Bounced checks are when an individual promises to pay someone or an entity for a good or service with a check but the funds are not actually in their account. Oftentimes, this is a simple mistake that comes from an improperly balanced checkbook. However, when an individual purposefully issues a bad check, knowing that the funds are not in their account, this is considered paper hanging.
Banks look out for the following scenarios to help them differentiate between an honest mistake and a crime.
- The defendant did not have an active bank account when the check was written.
- The banking institution denied the payment due to insufficient funds within 30 days and the account holder did not provide payment to the payee within 10 days of the denial.
As mentioned earlier, check kiting is when an individual indirectly steals from a bank, credit union, or other financial institution. This is done by an employee approving the payment of a check, even though there are no funds in the account to cover it. The check is deposited from one bank, where some or all of the funds are available to the account holder. The funds are then drawn back by the second bank, and the account no longer has the funds to cover the check. By the time the first bank realizes that there is a lack of funds in the account to cover the deposit, it is too late.
What Are the Possible Penalties for Check Fraud?
Depending on the severity of the check fraud, the penalties for a conviction will vary. It is based on the amount for which the check was written or the amount that it cost the victim.
- Check fraud that causes $20 or less of damage is considered a Class C misdemeanor and carries a fine of up to $500
- Check fraud that causes $500-$1,500 to a victim can be prosecuted as a Class A misdemeanor that can carry a penalty of a fine of up to $4,000 and a jail sentence for up to a year
- Check fraud that causes over $1,500 in damages to the victim is considered a felony and the jail sentence and fines will vary depending on which grade of felony it is prosecuted under.
Don’t Let an Honest Mistake Cost You Your Life
If you are facing a charge of bank or check fraud in Fort Worth, Texas, or the surrounding areas, then you will want the guidance of a white-collar criminal defense attorney. The defense attorneys at Gebhardt & Eppes, PLLC has years of experience successfully helping individuals either get their cases dismissed or their charges reduced. We work hard to ensure that our client’s voices are heard and that they are being treated with respect. Contact our team today for more information on our services or to schedule an appointment with our team to go over the facts of your case.
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Bank and Check Fraud FAQs
Depending on the type of fraud you have been charged with and who the victim was, bank fraud can either be a felony or a misdemeanor.
In most cases, check fraud is considered a Class A misdemeanor. This means that a conviction of this crime can lead to up to one year in jail and a maximum of $4,000 in fines.
A felony charge will increase these penalties. If the fraud resulted in a loss of over $2,500 but under $30,000 will be classified as a state jail felony.