White-Collar Crime - Bank Fraud

The FBI investigates incidents of financial institution fraud (FIF), including insider fraud, check fraud, mortgage and loan fraud, and financial institution failures. According to the Financial Institution Fraud and Failure Report, Fiscal Year 2003 (U.S. Department of Justice, Federal Bureau of Investigation, Washington, DC, 2003), in the early 1990s the FBI was heavily involved in investigating savings and loan failures due to insider fraud. In 1992 there were 758 financial institution failure investigations, the highest recorded. This number dropped throughout the 1990s and in 2003 only 67 cases were under investigation.

According to U.S. Department of Justice figures, the number of convictions in FIF cases declined from 1999, when 2,878 convictions were reported, to 2002, with

TABLE 7.2
Financial institution fraud and failure matters handled by the U.S. Department of Justice, 1986–2002

	Cases pending		Convictions1			Dollar amounts (in millions)
	Total	Major cases2	Total	Major cases2	Indictments	Recovered	Restitution	Fine	Failed financial institutions under investigation at end of fiscal year
1986	7,286	2,948	1,957	533	X	X	X	X	202
1987	7,622	3,393	2,309	740	X	X	X	X	282
1988	7,385	3,446	2,197	851	X	X	X	X	357
1989	7,819	3,605	2,174	791	X	X	X	X	404
1990	7,613	3,672	2,461	1,043	X	X	X	X	530
1991	8,678	4,336	2,559	986	2,784	$59.4	$490.7	$7.8	670
1992	9,772	5,071	2,751	1,136	3,064	67.1	402.7	14.6	740
1993	10,088	5,405	3,233	1,407	3,446	89.6	1,333.5	10.5	651
1994	9,286	4,926	2,926	1,348	2,867	240.6	865.0	10.4	531
1995	8,641	4,413	2,616	1,298	2,880	185.1	1,139.9	16.8	395
1996	8,574	4,070	2,510	1,255	2,630	67.2	359.1	442.7	247
1997	8,512	3,859	2,551	1,342	2,437	41.2	537.1	25.7	200
1998	8,577	3,709	2,613	1,207	2,691	62.4	491.0	5.5	142
1999	8,799	3,855	2,878	1,488	2,869	114.5	834.3	77.8	129
2000	8,638	4,081	2,783	1,394	2,877	48.5	589.0	8.0	99
2001	8,184	4,383	2,702	1,363	2,738	45.8	754.2	15.2	97
2002	7,305	4,287	2,397	1,328	2,471	28.2	1,983.8	7.6	71
Note: Financial institutions include banks, savings and loans, and credit unions.
1Includes pre-trial diversions.
2A major case is defined as a case involving a failed financial institution, or where the amount of reported loss or exposure is $100,000 or more.
SOURCE: "Table 3.151: Financial Institution Fraud and Failure Matters Handled by the U.S. Department of Justice," in Sourcebook of Criminal Justice Statistics 2002, U.S. Department of Justice, Bureau of Justice Statistics, Washington, DC, 2003

2,397 convictions. Almost $2 billion in restitution was reported in 2002, more than double the amount for 2001. (See Table 7.2.)

With the decline of insider fraud cases, the FBI has turned its investigations to external fraud schemes involving criminals seeking to defraud financial institutions. In 2003 the FBI reported 5,869 FIF cases under investigation, some 4,000 of which were classified as major cases (loss exceeding $100,000).