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Financial Institutions Fraud

NCJ Number
American Criminal Law Review Volume: 47 Issue: 2 Dated: Spring 2010 Pages: 595-645
Sara A. Hallmark; Megan L. Wolf
Date Published
51 pages
This article reviews the development and application of three Federal criminal statutes that govern offenses by or against financial institutions.
One section analyzes the Bank Fraud Statute (BFS), which targets fraud against financial institutions. Specifically, it protects the interests of the Federal Government as an insurer of financial institutions. The legislation was occasioned by the U.S. Supreme Court's decision in Williams v. United States (1982), in which the Court held that the crime of making false statements to financial institutions did not encompass check-kiting schemes. Section 1344 of the BFS gives Federal prosecutors the ability to prosecute check-kiting. The BFS also criminalized a variety of other schemes intended to defraud federally insured financial institutions. In addition to explaining elements of offenses under the BFS, the article outlines defenses and penalties. Another section of the article reviews the features of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), which was enacted in the wake of the widespread savings and loan association failures of the 1980s. The FIRREA restructured the Federal depository insurance system, abolishing the insolvent Federal Saving and Loan Insurance Corporation and shifting its regulatory responsibilities to the Federal Deposit Insurance Corporation. In addition, FIRREA created the Office of Thrift Supervisions, which was assigned broad regulatory powers to provide for the examination, sound operation, and regulation of savings associations. Other topics discussed in relation to FIRREA are civil sanctions for insider fraud, criminal penalties under 12 U.S. C. section 1818(j), and double jeopardy. The article's concluding section reviews the features of the Bank Secrecy Act (BSA), which was enacted to counter the increasing use of financial institutions to launder unreported income and obtain funds illegally. This section examines the BSA's record-keeping requirements and explains its reporting requirements and structuring offenses. 398 notes


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