18 U.S.C. § 1344 punishes schemes to defraud a federally insured financial institution OR to obtain money under false pretenses from such institution. Maximum: 30 years imprisonment, $1 million fine per count. The 30-year ceiling makes bank fraud one of the most severe federal economic crimes — paired with wire fraud, it produces some of the longest white-collar sentences.
Section 1344 is the federal government's heaviest white-collar fraud weapon. Any scheme that touches a federally insured bank — and almost every U.S. bank is FDIC insured — can be charged. The 30-year maximum and 10-year statute of limitations make these among the longest-exposure cases in federal criminal practice.
The Two Subsections
§ 1344 creates two related offenses:
- (1) Scheme to defraud a federally insured financial institution;
- (2) Scheme to obtain money or property from a federally insured financial institution by means of false pretenses.
The Supreme Court in Loughrin v. United States, 573 U.S. 351 (2014) clarified that § 1344(2) does not require proof of intent to defraud the bank itself — proof of intent to obtain bank property by false pretenses is enough.
Federally Insured Financial Institution
"Financial institution" under 18 U.S.C. § 20 includes:
- Banks, savings institutions, and credit unions insured by the FDIC or NCUA;
- Federal Reserve banks;
- Foreign banks operating in the United States;
- Mortgage lending businesses meeting the statutory definition.
Almost every U.S. retail bank is federally insured. The FDIC-insurance element is rarely a real defense — but it must be alleged in the indictment and proven at trial.
Common Charging Patterns
Loan Application Fraud
False statements on mortgage applications, business loans, or auto loans. Including PPP and EIDL loans processed through banks.
Check Kiting
Floating bad checks between accounts at different banks to artificially inflate balances.
Identity Theft Account Takeover
Using stolen identification to open accounts, transfer funds, or obtain credit.
Embezzlement by Bank Employees
Bank employees diverting funds — paired with 18 U.S.C. § 656 (theft by bank officer).
Business Email Compromise
Wire fraud schemes that ultimately move money through banks — both wire fraud (§ 1343) and bank fraud (§ 1344) charged.
Sentencing Under USSG § 2B1.1
Bank fraud is sentenced under USSG § 2B1.1 (fraud/theft guideline). Loss amount drives offense level:
- $50,000 = +6 levels;
- $250,000 = +12 levels;
- $1.5 million = +16 levels;
- $3.5 million = +18 levels;
- $9.5 million = +20 levels.
Plus enhancements:
- Sophisticated means: +2;
- 10+ victims: +2;
- Substantial financial hardship to one or more victims: +2;
- Role enhancement (organizer): +2 to +4.
A typical $1 million bank fraud case produces an offense level of 22-24 (41-63 months Zone D, custody-only).
Statute of Limitations: 10 Years
Under 18 U.S.C. § 3293, bank fraud has a 10-year statute of limitations — twice the standard 5-year limitations period for most federal crimes. This long window is one reason prosecutors prefer bank fraud charges when available.
Defenses
No Federally Insured Institution
The financial institution must be insured. Private finance companies, hard-money lenders, and uninsured entities are not covered. Charging documents must allege and prove insurance status.
Lack of Specific Intent
The government must prove intent to defraud or obtain money by false pretenses. Negligent misstatements, careless completion of forms, and good-faith errors do not satisfy the mens rea.
No Materiality
The false statement must have the natural tendency to influence the bank's decision. Some misstatements are immaterial — particularly when corrected before funding or when the bank had independent knowledge.
Loughrin Defense
For § 1344(2), Loughrin requires a "but-for" connection between the false pretenses and the bank's transfer of money. Some indictments fail this connection.
Statute of Limitations
Despite the 10-year window, older conduct can still be time-barred. Defense counsel should challenge the indictment's date assertions.
Federal Sentencing Strategies
- Acceptance of responsibility — 2-3 levels off when defendant pleads early and pays restitution;
- Substantial assistance under USSG § 5K1.1 — significant departures when defendant cooperates against co-conspirators;
- Variance arguments under 18 U.S.C. § 3553(a) — particularly effective when Guidelines overstate seriousness;
- Loss amount challenges — actual loss vs. intended loss; offsets for collateral; restitution credits;
- Departure for diminished capacity, family circumstances, and other Section 5K factors.
What to Do If You Are Under Investigation or Charged
- Do not speak with federal agents — FBI, DEA, ATF, IRS-CI, HSI, USPS — without an attorney. Even small lies can become independent § 1001 charges.
- Do not destroy or alter records — destruction is obstruction under 18 U.S.C. § 1519, a 20-year felony.
- Preserve all communications — emails, texts, messaging apps, financial records — but do not delete anything.
- Do not contact witnesses or co-defendants — even social contact can become witness tampering.
- Engage federal defense counsel immediately — call (214) 466-1398. We are admitted in TXND and TXED.
Frequently Asked Questions
What is the maximum sentence for federal bank fraud?
30 years per count. Multi-count indictments can produce aggregate exposure exceeding 100 years.
How is bank fraud different from wire fraud?
Wire fraud requires interstate wire communications; bank fraud requires a federally insured financial institution as victim. Most modern fraud schemes can be charged under both — and often are, with concurrent sentences.
What is the statute of limitations for bank fraud?
10 years under 18 U.S.C. § 3293 — double the standard 5-year limitations period for most federal crimes.
Can I be charged with bank fraud for false statements that didn't result in loss?
Yes. § 1344(1) requires only a scheme to defraud — not actual loss. The government can charge attempts and inchoate schemes.
What is the difference between § 1344(1) and § 1344(2)?
§ 1344(1) requires intent to defraud the bank; § 1344(2) requires intent to obtain money by false pretenses. Loughrin v. United States clarified that § 1344(2) does not require intent to defraud the bank specifically.
Speak With a Frisco Criminal Defense Attorney
If you or a loved one is facing federal defense charges in Frisco, Collin County, or anywhere in the Dallas-Fort Worth metroplex, the time to act is now. L and L Law Group attorneys are available 24 hours a day, 7 days a week. Call (214) 466-1398 for a free, confidential consultation, or submit your case online and a licensed attorney will contact you directly.
This article is general information, not legal advice. Texas and federal criminal law are complex and fact-specific — please consult a licensed attorney about your particular situation. Past results do not guarantee future outcomes.