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Financial Institutions Fraud

NCJ Number
American Criminal Law Review Volume: 48 Issue: 2 Dated: Spring 2011 Pages: 697-748
Dan Fasanello; Lisa Umans; Tom White
Date Published
52 pages
This article reviews the development and application of three Federal criminal statutes that govern offenses by or against financial institutions.
One section of the article addresses the purpose and scope of the Bank Fraud Statute (BFS), which covers a variety of offenses against financial institutions, including check-kiting, check forging, false statements and nondisclosures on loan applications, stolen checks, unauthorized use of automated teller machines, credit card fraud, student loan fraud, bogus transactions between offshore "shell" banks and domestic banks, automobile title frauds, diversion of funds by bank employees, submission of fraudulent credit card receipts, false statements intended to induce check cashing, and mortgage fraud. Although broadly written, the BFS fails to reach all crimes relating to financial institutions; some examples of harmful actions related to financial institutions not covered by the BFS are listed. This section also outlines the elements of an offense and defenses against a charge under the BFS, as well as penalties. Another section of the article focuses on 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 in order to restructure the Federal depository insurance system while abolishing the insolvent Federal Savings and Loan Insurance Corporation (FSLIC) and shifting its regulatory responsibilities to the Federal Deposit Insurance Corporation (FDIC). This section also discusses civil sanctions for insider fraud, criminal penalties, and double jeopardy issues under FIRREA. The article's final section addresses the Federal Bank Secrecy Act's (BSA's) purpose, record-keeping requirements, and reporting requirements; and it analyzes BSA's method of structuring offenses. The BSA addresses tax evaders' and organized crime's increasing use of financial institutions to launder unreported income. 399 notes


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