Federal bank fraud under 18 U.S.C. § 1344 has two related but distinct theories. The statute allows a maximum of 30 years in prison, a fine of up to $1 million, or both. Those are statutory ceilings—not a minimum sentence or a prediction of what any person will receive. The statute sets no minimum term.
The exact subsection in the charging paper matters. Section 1344(1) addresses a scheme to defraud a financial institution. Section 1344(2) addresses obtaining property owned by or in a financial institution’s custody or control by means of false or fraudulent pretenses, representations, or promises. Both clauses cover a knowing execution or attempted execution of the specified scheme.
The two § 1344 theories
| Charging theory | What the allegation focuses on |
|---|---|
| Section 1344(1) | A scheme to defraud a financial institution. In Shaw v. United States, the Supreme Court explained that a bank can have a property interest in a customer’s deposit account, even when the customer is the more obvious immediate victim. A scheme targeting that account may therefore concern the bank’s property interest. |
| Section 1344(2) | A scheme to obtain bank property by means of a false or fraudulent pretense, representation, or promise. Loughrin v. United States explains that this clause does not add a requirement that the person intended to defraud the bank itself. The alleged false statement must, however, be the means of obtaining property in the financial institution’s custody or control; a merely incidental connection to a bank is not enough. |
The clauses can overlap, but they are not interchangeable. For example, paying for a purchase with an ordinary valid check does not automatically make the transaction federal bank fraud merely because a bank processes it. The account, representation, property, and alleged scheme still matter. Shaw v. United States; Loughrin v. United States.
The statute uses the defined term “financial institution.” Congress supplies that definition in 18 U.S.C. § 20. Whether a specific organization fits the definition depends on the facts and the applicable statutory category. Do not assume that every payment app, merchant, or private lender qualifies just because money moved through it.
What the maximum does—and does not—tell you
Section 1344 authorizes up to 30 years of imprisonment and a fine up to $1 million, or both. Those figures are maximums for the offense. They do not state a minimum, set a sentence for a particular count, or predict the result in an individual case. The charging subsection, alleged conduct, financial records, case posture, and other facts need separate review. The maximum alone cannot tell you what sentence a judge would impose.
Actual loss also needs careful treatment. Shaw does not make a completed loss to the bank or an intent to cause that loss a universal element of every § 1344 theory. The result can depend on which clause is charged and what the evidence shows. A missing loss allegation therefore does not, by itself, resolve whether the charged elements are met.
Records to review with counsel
If you are named in a federal bank-fraud investigation or charge, organize the documents around the actual allegation:
- The indictment or information, including the subsection charged and the description of the alleged scheme.
- The financial institution identified in the papers, and records showing its relationship to the account or property at issue.
- Relevant account statements, deposit records, canceled checks, loan applications, transaction records, and any authorization or account-access documents.
- The exact statement, representation, or promise the government says was false, who made or received it, and when.
- A timeline of the transfers, communications, account activity, and any alleged loss or attempted transaction.
Keep original records intact and let counsel assess how they relate to the charged clause. A check dispute, inaccurate application, or missing bank loss should not be evaluated in isolation from the count and the full transaction record.
For help reviewing federal charging papers and financial records, contact the Law Offices of David S. Chesley at (800) 755-5174.