Bank Fraud

Bank FraudTax Law Term “Bank Fraud

Fraudulent checks result in an annual loss of more than $800 million, equal to over 12 times the loss from bank robberies each year. Bank and banking related fraud includes check fraud, kiting, credit card theft and fraud, booster checks, and falsification of loan applications. The Internal Revenue Code allows a deduction to banks and other taxpayers for fraud loss not compensated for by insurance or otherwise.

Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many instances, bank fraud is a criminal offence. Wikipedia

Whoever knowingly executes, or attempts to execute, a scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.  Cornell’s Legal Information Institute

Bank fraud can be defined as an unethical and/or criminal act by an individual or organization to illegally attempt to possess or receive money from a bank or financial institution. Let’s take a look at several types of bank fraud which exist, followed by how these types of activities can be prevented.

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