financial institution fraud

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Financial Institution Fraud (FIF) is a wide category of fraud or embezzlement which occurs within or against financial institutions.

Under 18 U.S. Code § 1344, the bank fraud statute, it is a federal crime to defraud a financial institution. While the federal statute used to only cover financial institutions insured by the FDIC, it was amended in 1989 to cover financial institutions generally. Additionally, many states have their own statutes criminalizing FIF. For example, 720 ILCS 5/17-10.6 makes Financial Institution Fraud an Illinois state crime. 

Financial Institutions fraud can take a variety of forms including but not limited to, commercial loan fraud, check fraud, counterfeit negotiable instruments, mortgage fraud, check kiting, false applications, and faulty transactions to off-shore accounts. Federally prosecuted FIF can carry criminal penalties of up to 30 years in prison and a $1,000,000 fine. 

[Last updated in January of 2023 by the Wex Definitions Team]