“Bank Fraud” in loan applications

he's getting what he deserves


its been a pet peeve of mine since I picked up my law certifacatte over at boozie hall

The bank can’t bring charges because the loans are current and there hasn’t been any missed payments or anything like that.
What I don’t understand is for there to be fraud there has to be a loss of some kind to the bank. In these cases there is no loss. The banks have each made money and the loans are in good standing.

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What I don’t understand is for there to be fraud there has to be a loss of some kind to the bank. In these cases there is no loss. The banks have each made money and the loans are in good standing.

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This.

I am having a hard time understanding how a bank got fleeced in eithe if these instances to warrant fraud having been committed.

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I am having a hard time understanding how a bank got fleeced in eithe if these instances to warrant fraud having been committed.

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Manafort attempted to fleece them by submitting fraudulent documentation, allegedly

You probably applied for a mortgage - the doc process is far more regulated and the bank can be charged with fraud for not verifying the info on the application.

A business loan plays by different rules - but since the bank is federally insured, the gov can charge you with fraud regarless of whether or not there is default.

It falls under “obtaining funds by misleading”.

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But do you really have faith in banks after the complete financial meltdown and self dealing criminality of the 2000s?

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One could say

But do you really have faith in the government after the complete financial meltdown and self dealing criminality of the 2000s?

Bank fraud statutes are not intended primarily to protect the banks themselves ... thjough they do have that effect. They are intended to protect the federal government in its role as insurer of deposits with financial institutions.

False Statements (18 U.S.C. § 1014)

Section 1014 of Title 18, United States Code, covers the knowing making of false statements or willfully overvaluing any property or security for the purpose of influencing in any way the action of the enumerated agencies and organizations.

Generally, the making of a number of false statements to a lending institution in a single document constitutes only one criminal violation under section 1014. See United States v. Sue, 586 F.2d 70, 71 (8th Cir. 1978). See also United States v. Thibadeau, 671 F.2d 75, 79 (2d Cir. 1982). However, in Bins v. United States, 331 F.2d 390 (5th Cir.), cert. denied, 379 U.S. 880 (1964), the court of appeals found duplicity in an indictment that charged the defendant in each count with making false statements on two different FHA forms. In United States v. Canas, 595 F.2d 73, 78 (5th Cir. 1979), the United States Court of Appeals for the Fifth Circuit distinguished Bins and found that an indictment can properly charge in a single count false statements made on different documents as long as the documents are necessary parts of a loan package meant to obtain a single loan.

The elements of the offense of making a false statement are: (1) making a false statement or willfully overvaluing property or security knowing the same to be false, (2) for the purpose of influencing in any way the action, (3) of the enumerated agencies and organizations. Actual damage or reliance is not an essential element of the offense. See Kay v. United States, 303 U.S. 1 (1938); United States v. Sabatino, 495 F.2d 540 (2d Cir. 1973), cert. denied, 415 U.S. 948 (1974); United States v. Trexler, 474 F.2d 369 (5th Cir.), cert. denied, 412 U.S. 929 (1973). In the Kay case below, the United States Court of Appeals for the Second Circuit held that it was no defense that the false statements inflating the amount of the mortgage claim were not influential in securing favorable action; the important fact was that the false statements were made for the purpose of influencing action. United States v. Kay, 101 F.2d 270 (2d Cir. 1939), cert. denied, 306 U.S. 660 (1939).

Reliance on the false statements is not an element of a 18 U.S.C. § 1014 prosecution. See United States v. Tokoph, 514 F.2d 597, 604 (10th Cir. 1975). Furthermore, there need not be any actual defrauding of the bank. See United States v. Kennedy, 564 F.2d 1329 (9th Cir. 1977), cert. denied, 435 U.S. 944 (1978). The statute requires that all statements supplied to lending institutions that have the capacity to influence those institutions be accurate or at least not knowingly false. In this regard the false statement may have the requisite capacity to influence not only at inception but also over the life of the loan with respect to extending the loan, deferring action upon it or modifying it. The statute does not require that the information be furnished before the debt is incurred. See United States v. Gardner, 681 F.2d 733 (11th Cir. 1982). A false statement under Section 1014 includes a statement that the information be furnished before the debt is incurred. See United States v. Gardner, 681 F.2d 733 (11th Cir. 1982). A false statement under Section 1014 includes a statement that a particular party is to be a borrower on a loan when in fact that party is never intended to receive the loan proceeds or have any liability on the loan. United States v. Adamson, 665 F.2d 649, 659 (5th Cir. 1982), rev'd on other grounds, 700 F.2d 953 (5th Cir. 1983)(en banc), cert. denied, 464 U.S. 833 (1983).

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Manafort attempted to fleece them by submitting fraudulent documentation, allegedly

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If he's in default on the loan, then it's an easier case to prosecute. If he's current or has paid off a sizeable amount , it gets harder to prove

Fraud is common in loan applications, it's the level of fraud that raises red flags

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Fraud is common in loan applications, it's the level of fraud that raises red flags

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But rarely does it draw fire from a SC.