Bank fraud is a serious offense with severe penalties. Both state and federal laws in the United States govern this crime.
It is important to understand when bank fraud escalates to a federal crime.
Elements of bank fraud
In 2022, 70% of financial institutions lost more than $500,000 due to fraud. Bank fraud involves the intentional deception or misrepresentation to obtain money, assets or other property from a financial institution. This can be in the form of check fraud, identity theft, loan fraud or embezzlement.
Jurisdictional thresholds
The impact and scope of the fraudulent activity determine whether it is a federal crime. Generally, if the fraud affects interstate commerce, authorities will consider it a federal crime. This is because the federal government has jurisdiction over interstate matters.
Monetary thresholds
The dollar amount involved in the fraudulent activity can also determine whether it becomes a federal offense. Cases involving substantial sums of money are more likely to attract federal attention. This is especially true if the fraud affects multiple individuals or entities across state lines.
Aggravating factors
Certain factors can also elevate bank fraud to a federal offense. If the fraud scheme involves sophisticated methods, organized crime syndicates or targets vulnerable populations such as the elderly, federal authorities are more likely to intervene.
Federal penalties
A federal bank fraud conviction can result in severe consequences, including lengthy prison sentences and hefty fines. Moreover, convicted parties may have to pay back victims and forfeit any assets obtained through fraudulent means.
Whether on the state or federal level, bank fraud is a serious crime, and federal prosecution generally results in more severe penalties.