Federal Sentencing Guidelines for Bank Fraud (18 USC 1344)

Bank fraud is wire fraud's evil twin. Same sentencing guidelines. Same loss calculations. Same enhancement math. But the 30-year maximum sentence that wire fraud only reaches when prosecutors prove the scheme "affected a financial institution" - bank fraud gets that automatically. Welcome to Spodek Law Group. Our goal is to explain why bank fraud puts defendants in a worse position from day one, and what that means for anyone facing these charges. The distinction matters. It can mean a decade of additional prison exposure.

Here's the structural problem you're facing. Wire fraud under 18 USC 1343 carries a 20-year maximum sentence. That jumps to 30 years only if the government proves the fraud "affected a financial institution." Bank fraud under 18 USC 1344 carries 30 years from the start. Why? Because bank fraud, by definition, always involves a financial institution. The element that wire fraud prosecutors have to prove as an extra step - bank fraud prosecutors get for free. The enhancement isn't something they add. It's the baseline. You're already starting in the hole.

This isn't an accident of legislative drafting. Congress created the bank fraud statute in 1984 specifically to protect federally insured institutions. Then they deliberately increased the maximum from 20 to 30 years. The federal government has a direct financial stake through FDIC insurance. When someone defrauds a bank, taxpayers are ultimately on the hook. So Congress made sure prosecutors would have maximum leverage. The statute was designed to be harsher than wire fraud. It's working exactly as intended.

The Enhancement That's Already Built In

OK so heres the thing most people miss about bank fraud prosecutions. Wire fraud and bank fraud both get sentenced under the same guidelines section - USSG 2B1.1. Same base offense level. Same loss amount tables. Same enhancement calculations for victim count, sophisticated means, and abuse of trust. The math is identical. So people assume the charges are basicly interchangeable. There wrong.

The difference is in the statutory maximum, and that difference matters more then most defendants realize. Wire fraud starts at 20 years per count. It only reaches 30 years if the prosecutor proves an additional element - that the scheme "affected a financial institution." Thats an extra burden of proof. Its something the defense can challenge. Bank fraud? That 30-year maximum applies automaticaly. The element is built into the statute. By charging bank fraud instead of wire fraud, prosecutors eliminate a potential defense argument and guarantee themselves access to the enhanced penalties.

Think about what this means practically. If your alleged scheme involved a bank, prosecutors have a choice. They can charge wire fraud and prove the financial institution element. Or they can charge bank fraud and skip that step entirely. Which do you think they choose? This is why bank fraud prosecutions have been increasing - especially since the PPP loan explosion gave federal prosecutors thousands of cases that perfectally fit the statute. The charging decision itself puts you at a disadvantage.

Todd Spodek tells clients this distinction matters most during plea negotiations. When prosecutors can point to 30 years of exposure per count without having to prove anything extra, their plea leverage is enormous. Wire fraud defendants at least have the argument that the government hasn't established the financial institution element. Bank fraud defendants dont have that card to play. Your negotiating position is weaker from the moment the indictment drops.

30 Years Is the Baseline, Not the Ceiling

Lets talk about what 30 years per count actualy means. The statutory maximum is the ceiling for any single count. Your guidelines range - calculated under USSG 2B1.1 - determines were within that ceiling your sentence will likely fall. But the statutory maximum matters for several reasons that effect your case.

First, count stacking. If your charged with five counts of bank fraud, your looking at a theoretical maximum of 150 years. Nobody expects to actualy serve 150 years. But that astronomical exposure creates overwhelming plea pressure. Prosecutors can offer to drop four counts if you plead to one. Suddenly a deal that would otherwise seem harsh looks like a gift. Thats the point. The 30-year maximum per count isnt about actualy sentencing anyone to 30 years - its about creating leverage.

Second, guideline calculations can exceed the statutory maximum. When your loss amount is high enough and enhancements stack up, the guidelines might calculate a range of 40-50 years. But the judge cant sentence above the statutory maximum. So for wire fraud defendants with massive loss amounts, the 20-year cap provides some protection. Bank fraud defendants dont get that same cushion. Their 30-year cap means more of the guideline range is actually reachable.

Heres something else practitioners know. Congress deliberately increased bank fraud from 20 to 30 years through Public Law 101-647. This wasnt an oversight or a technical amendment. It was a conscious policy decision to make bank fraud punishable more severely then other fraud offenses. The legislative history makes clear that Congress wanted enhanced deterrence for crimes against the banking system. When a judge reads your presentence report, they know Congress specificaly chose to treat bank fraud more harshly. That context shapes their thinking.

At Spodek Law Group, weve seen how this plays out. Defendants facing wire fraud charges have more room to maneuver. Defendants facing bank fraud charges are operating with less margin for error. The same underlying conduct - the same dollar amounts - produces different outcomes depending on which statute gets charged. Thats not fair, but its how the system works. Look, nobody said the federal system was designed to be fair to defendants. It was designed to give prosecutors tools. Bank fraud is one of the sharpest tools in the box.

The Decade-Long Prosecution Window

Bank fraud dosent just carry a higher maximum sentence. It also comes with a longer statute of limitations. And this is were the trap gets even worse.

Standard federal fraud offenses - wire fraud, mail fraud without the financial institution enhancement - have a five-year statute of limitations under 18 USC 3282. The government has to indict within five years of the offense. Bank fraud has a ten-year statute of limitations under 18 USC 3293. Prosecutors have twice as long to build their case against you.

Think about what a decade means practically. Documents dissapear. Witnesses move away or forget. Emails get deleted. Your own memory of events from ten years ago is fuzzy at best. But the goverment has been quietly building a file. They have your bank records, which banks are required to retain. They have your tax returns, which the IRS keeps indefinately. They have electronic records that dont fade the way human memory does. The asymmetry is brutal. Your defense gets harder as time passes. Their case dosent.

Heres the kicker. If bank fraud is charged as a conspiracy, the statute of limitations dosent even start running until the last overt act in furtherance of the conspiracy. That could extend the window even further. You might face charges for conduct you barely remember, from relationships that ended years ago, based on documents you havnt seen in a decade. And youll be expected to mount a defense against all of it.

This extended SOL is especialy dangerous for business owners and executives. Financial decisions you made in 2015 can still be charged in 2025. Loan applications from a decade ago are still within the prosecution window. The paper trail dosent dissapear just because you moved on with your life. Federal prosecutors know this. They use the extended timeline strategicaly, waiting until witnesses are scattered and memories are dim before bringing charges.

We've seen cases at Spodek Law Group where clients are shocked to learn they're being investigated for conduct they thought was ancient history. The ten-year SOL isn't just longer - it fundamentally changes the dynamics of how these cases get built and prosecuted. It's also worth noting that many bank fraud investigations start with suspicious activity reports filed by banks themselves. These SARs go into a federal database. Investigators can pull them years later when building a case. The bank that processed your loan might be the same bank that filed the report that eventually led to your indictment. Read that again. The institution you allegedly defrauded is often the institutions whose paperwork provides the evidence to convict you.

PPP Fraud Made Bank Fraud Prosecutors Very Busy

The Paycheck Protection Program was supposed to save small businesses during COVID. Instead, it became the largest bank fraud prosecution wave in American history. Heres why PPP fraud is automaticaly bank fraud: the loans were processed through SBA-approved lenders - federally insured banks. Every fraudulent PPP application went through a financial institution. Every case fits perfectaly under 18 USC 1344.

The numbers are staggering. Since the CARES Act passed, the DOJ Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases. Theyve seized over $78 million in cash proceeds and numerous properties and luxury items purchased with fraudulent PPP funds. And the sentences being handed down show exactaly how seriously judges are taking these cases.

Amir Aqeel led a $20 million PPP fraud conspiracy in Houston. He helped at least 14 other people submit more than 75 fraudulent loan applications. His sentence: 15 years in federal prison. Thats not a typo. Fifteen years for a first-time white collar offense. The 30-year maximum gave prosecutors the leverage to push for a sentence that would have been unusual for wire fraud.

Stephanie Hockridge co-founded Blueacorn, which was supposed to help small businesses get PPP loans. Instead, she and her co-conspirators fabricated payroll records, tax documents, and bank statements to fraudulently obtain over $63 million. Her sentence: 10 years. A company built specificaly to exploit pandemic relief programs, prosecuted under bank fraud, with a decade-long sentence.

Meelad Dezfooli in Nevada obtained more than $11 million in fraudulent PPP loans and then laundered the money through real estate - he bought approximately 25 properties. His sentence: over 15 years plus five years supervised release. Carl Delano Torjagbo in Georgia was convicted of a $9.6 million PPP fraud combined with $3.4 million in tax fraud. He faces up to 170 years of maximum exposure. These are real people serving real sentences in federal prison right now. The banks kept their records. The applications were timestamped. The wire transfers were tracked. There was no escape hatch once the investigation started.

These arnt outliers. Heres the reality - they're the new normal for bank fraud prosecutions. Federal prosecutors are treating PPP fraud as seriously as drug trafficking in terms of sentences sought. The combination of 30-year maximums, clear documentation (every PPP application created a paper trail), and massive loss amounts means defendants are facing consequences that would have seemed extreme five years ago.

Same Guidelines, Different Nightmare

Bank fraud and wire fraud both get sentenced under USSG 2B1.1. The guidelines calculation is identical. Base offense level 7. Then add levels based on loss amount - the same exponential scale that applies to all fraud:

• Loss between $6,500 and $15,000: add 2 levels
• Loss between $250,000 and $550,000: add 12 levels
• Loss over $550 million: add 30 levels

Then add enhancements for number of victims, sophisticated means, use of special skill, abuse of position of trust. The math dosent change based on wheather your charged under 1343 or 1344. So why does it matter?

Because the statutory maximum creates a ceiling, and bank fraud's ceiling is higher. When your guideline range exceeds the statutory maximum, the judge sentences at the cap. Wire fraud defendants with massive loss amounts sometimes benefit from the 20-year maximum serving as a brake. Bank fraud defendants dont get that same protection. The higher ceiling means more of your calculated range is actualy reachable.

There's also the psychological effect on plea negotiations. When a prosecutor can credibly threaten 30 years per count instead of 20, defendants calculate risk differantly. The expected value of going to trial changes. More defendants plead guilty earlier, accepting deals they might have fought if the maximum exposure were lower. This isn't hypothetical - it's how the system actually operates in federal courts across the country.

At Spodek Law Group, we explain to clients that the charge name matters less then the underlying math for sentencing purposes. A $500,000 bank fraud produces the same guideline range as a $500,000 wire fraud. But the strategic dynamics are different. The leverage is different. The negotiating position is different. You have to understand both the guidelines calculation AND the statutory framework to navigate these cases effectively.

Fighting a Statute Designed Against You

If bank fraud is structured to maximize prosecutor leverage, what defenses actualy work? This is were experienced federal defense counsel matters.

The first line of defense is challenging the financial institution element - even though it's built into the statute. Bank fraud requires proof that the scheme involved a "federally chartered or insured financial institution." Not every lender qualifies. Not every financial entity is FDIC insured. If the alleged victim isn't actually covered by the statute, the bank fraud charge dosent apply. We've seen cases where prosecutors charged bank fraud when the lender didn't qualify, and the charge had to be dismissed or reduced.

Second, attack the scheme to defraud element. Bank fraud requires a scheme or artifice to defraud. That's not the same as a bad business decision, a loan that went sideways, or even a misrepresentation that wasnt material. The government has to prove intentional deception, not just negligence or poor judgment. This is were the facts matter enormously. Did your client intend to deceive, or did they make mistakes? The line between fraud and failure isn't always clear.

Third, fight the loss calculation. The guidelines let the defense challenge how much loss is attributable to the conduct. Intended loss versus actual loss. Credits for money returned. Exclusions for interest and finance charges. The probation officer's initial calculation is a starting point, not a final answer. We've seen aggressive loss calculation challenges reduce guideline ranges by years. The judge has to find loss amount by a preponderance of evidence - it's not automatic. In one case, challenging the government's loss figure reduced the client's guideline range from 15-20 years to 8-10 years. The sentencing math matters enormously.

Fourth, variance arguments under Section 3553(a). After Booker, the guidelines are advisory. Judges can impose sentences below the range if circumstances warrant. History and characteristics. Nature of the offense. Need for just punishment. Sentencing disparity with similar defendants. Every variance argument is an opportunity to move away from the guideline range. Let that sink in - the same conduct that produces a 15-year guideline range might result in an 8-year sentence if the variance arguments are compelling enough. That's exactly why sentencing advocacy matters as much as trial prep in bank fraud cases.

Todd Spodek tells clients that bank fraud cases are winnable - not always at trial, but through strategic positioning and aggressive defense work. The statute is harsh, but it's not unlimited. The elements still have to be proven. The loss calculation can be challenged. The sentencing outcome can be influenced. The key is having counsel who understands how prosecutors weaponize this statute and how to fight back effectively.

What This Means for Your Case

Bank fraud sentencing follows the same guidelines as wire fraud sentencing, but with a critical structural disadvantage: the 30-year maximum and 10-year statute of limitations are built into the statute. Wire fraud prosecutors have to prove their scheme "affected a financial institution" to access enhanced penalties. Bank fraud prosecutors get those penalties automatically. The enhancement isn't an add-on. It's the baseline. This isn't a subtle distinction. It's the difference between facing 20 years or 30 years per count. It's the difference between a 5-year or 10-year prosecution window. The structural disadvantage shapes every decision you make from the moment charges are filed.

If you're facing bank fraud charges, understand that your starting position is worse than it would be for wire fraud. The plea leverage is higher. The negotiating dynamics are different. The prosecution window is longer. None of this means the case is hopeless - it means you need counsel who understands these structural disadvantages and knows how to work within them.

Call Spodek Law Group at 212-300-5196. We handle federal fraud cases from our office in the Woolworth Building in Manhattan, and we represent clients nationwide. The consultation is free. The mistake of assuming bank fraud is "just another fraud charge" - thats not free. Bank fraud was designed to be harsher then wire fraud. Congress chose that. The statute reflects that choice. Dont face these charges without counsel who understands what your actualy up against.