The penalties for financial fraud

Individuals facing fraud-related charges may face lengthy jail sentences, steep fines and probationary periods. These hurdles can cause notable setbacks even for the most innovative and productive of professionals in the field. 

Financial fraud – an umbrella term covering numerous fraud-related circumstances – is important to understand in these cases. Understanding can mean the difference between a charge and a conviction. 

Types of financial fraud

USA.gov scrutinizes the most frequently-committed acts of fraud in the United States within a given period of time. Some specific examples include: 

  • Wire or radio fraud 
  • Bank fraud 
  • Mail fraud 
  • Ponzi and pyramid schemes 
  • Sweepstakes and lottery scams 

Penalties for financial fraud

The Federal Deposit Insurance Corporation lists the potential penalties for any party that involves itself in crimes of fraud. The severity of the crime influences the impact of the penalty. A number of concrete examples are as follows. 

Convictions related to wire or radio fraud result in up to 30 years in prison. The maximum fine is $1  million. Bank fraud convictions carry the same penalty. Bank fraud charges apply if an individual either defrauds a financial institution or falsely obtains the assets therein. Those who commit mail fraud face fines and up to 20 years in prison. This applies to anyone who knowingly causes a private or commercial interstate carrier to deliver any material intended to aid in the act of defrauding someone. Any fraudulent activity that coincides with presidentially declared emergencies or major disasters increases the penalty to a maximum 30-year prison sentence and a fine of up to $1 million. 

Some acts of fraud result in probation rather than incarceration, and the convicted person may have to pay restitution to the damaged party. This involves compensating any loss the party claims to have faced. Even aside from fines and prison, a fraud conviction can be a markedly costly ordeal that can permanently alter a professional’s career path. 

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