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FBI CASES OF FINANCIAL INSTITUTION FRAUD
An Accounting

01/20/04

Financial Institution GraphicThat old saw about Willie Sutton saying he robbed banks "because that's where the money is"? Turns out a reporter coined the phrase to round out a story about Sutton. But Willie, born in Brooklyn in 1901, stood by the quote... and the substance of it is just as true with today's 21st century bank frauds: our modern financial institutions are targeted by criminals and organized crime groups... because "that's where the money is."

Take the FBI's FY 2003 Financial Institution Fraud and Failure (FIF) Report, just made public on this site. It shows that the FBI had more than 6,000 cases open this year.

What kinds of FIF cases? All kinds. Identity theft. Check fraud. Counterfeit negotiable instruments. Check kiting. Mortgage and loan fraud. Insider fraud. Financial institution failures. And they are some of the most demanding, difficult, and time consuming cases in all of law enforcement. All those numbers. All those layers of accounting in accounts that aren't centralized. All those transactions that can be hidden against a backdrop of genuine transactions that give them an appearance of legitimacy. For example, in this year's line up:

  • One woman defrauded a bank of $1.3 million by submitting fraudulent invoices and other documents that let her deplete a million-dollar line of credit with non-existent assets. Guilty and sentenced.
  • One bank folded because its chairman and board of directors embezzled its money and falsified records to conceal it. This year the last director -- a fugitive from justice--was arrested upon re-entering the U.S. Guilty and sentenced.
  • One man was arrested after trying to withdraw 4 cashiers checks from a bank...and found to be part of an organized Vietnamese gang and involved in a wider scheme in other cities. Guilty and convicted, awaiting sentencing.
  • One man involved his company into so many layers of commercial loan fraud that when the company defaulted on its overstated line of credit, the loss was $15 million. Guilty and sentenced.

What does the future of FIF hold? Change -- and lots of it. Criminals interested in siphoning money out of our banks and other financial institutions famously adapt to the times. For example, in the 1980s, it was bank insider abuse. In the early 1990s, it was the savings & loan crisis. Now it is major fraud schemes launched by "outsider" criminals.

As for the future: As financial institutions become less regulated and provide more financial services to the public through the sale of insurance, securities, investment products, and on-line banking, you can bet our investigations will change accordingly.

Related Links: FY 2003 FIF Report | White Collar Crime page | Press Release