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Criminal Resource Manual

826. Applicability of 18 U.S.C. § 1344

Section 1344 of Title 18, United States Code, covers any scheme to defraud occurring on or after October 12, 1984. The statutory language is modeled directly after the mail fraud statute. It proscribes the use of a scheme or artifice either to defraud a Federally chartered or insured financial institution or to obtain any of the monies, funds, credits, assets, securities, or other property owned by, or under the control of, such an institution. The institutions protected by the statute are those chartered under the laws of the United States or insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation (now defunct), or the National Credit Union Administration.

The legislative history makes it clear that the bank fraud statute is intended to apply to check-kiting cases, see S.Rep. No. 98-225 at 378, as well as to supplement 18 U.S.C. § 2113 when financial institution property is obtained by false pretenses in the absence of common law "taking and carrying away" of the property. Id.

In cases involving the victimization of an insured financial institution by the use of a shell or "bogus" offshore bank, the legislative history again specifically asserts congressional intention that the bank fraud provision have extra-territorial reach and that the offender may be prosecuted if present within the United States, even if the fraudulent conduct took place outside the borders of the United States. Id. at 379.

The general bank fraud statute should be viewed as a supplement to, rather than a substitute for, other criminal provisions relating to fraud perpetrated on insured financial institutions. The choice of offenses charged should be based on the facts of the individual case.

Prosecutions under Section 1344 may be analogized to the traditional use of the mail fraud statute to prosecute fraudulent conduct not otherwise the subject of specific criminal statutes.

[cited in USAM 9-40.000]