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The many facets of crime . . .
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 Financial Institution Fraud Video Text


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Bank robbery has been frequently portrayed in movies over the years, but did you know that each year the money stolen from financial institutions by fraud is over 100 times the amount stolen in robberies?  Thirty years ago, bank frauds were mostly simple cons, like check kiting and unsophisticated loan frauds, often done by a single con man.

The failure of the Penn Square Bank of Oklahoma City in 1982 marked the beginning of a new era in financial institution fraud. People like Charles Keating, Gabe Ferone, and David Paul used the institutions they controlled as their own personal treasure troves until they collapsed under the weight of massive bank fraud. Over 1,000 financial institutions have failed in this country, causing $200 billion in losses, more than was spent on the Vietnam War.

In the United States, today's biggest fraud problem is large-scale check fraud and counterfeiting operations, much of it controlled by organized groups who have come here from other countries. Nigerian and Russian criminals, particularly in the East, are involved in a myriad of bank fraud schemes. These include check washing, letter fraud investments, credit card and check theft, loan frauds and customer impersonation schemes.

The FBI's Operation CheckMaster focused on Vietnamese groups from California and who had mastered the art of counterfeiting. They produced large volumes of bogus credit cards, payroll checks, traveler's checks, bank drafts and software. With today's computer technology, these organizations can easily create authentic-looking documents.  While check fraud and counterfeiting are the most common bank frauds, loan frauds account for the largest dollar volume, almost 40 percent of all financial institution losses. 

Much of this fraud involves unscrupulous professionals acting in collusion: mortgage brokers, accountants, appraisers, realtors and bank loan officers, all of whom profit from bogus loan approvals through commissions, fees and fictitious sales. These crimes threaten the stability of our nation's banking system and challenge law enforcement to unravel their complex schemes.

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