Federal Sentencing Guidelines for Bank Fraud

Federal Sentencing Guidelines for Bank Fraud: The 30-Year Maximum That Changes Everything

Bank fraud carries the harshest penalty of any basic fraud statute in federal law – 30 years in prison and a $1 million fine per count. That’s not a typo. While wire fraud and mail fraud cap at 20 years, Congress decided that defrauding federally insured financial institutions deserves an extra decade of potential punishment. The statute has no mandatory minimum, which means a judge could theoretically give you probation for the same crime that could send someone else away for three decades. This range – from nothing to everything – is what makes bank fraud sentencing both unpredictable and terrifying.

Here’s what makes this worse: the statute of limitations for bank fraud is 10 years. Most federal crimes have a 5-year window. Bank fraud doubles it. Conduct from 2015 can still be prosecuted in 2025. If you committed PPP loan fraud in 2020, federal prosecutors have until 2030 to indict you. The window never seems to close, and prosecutors know exactly how to use that time to build overwhelming cases.

The bank fraud statute was enacted in 1984, modeled directly on the mail fraud statute that had been prosecuting con artists since 1872. But Congress added harsher penalties because banks are federally insured – when banks lose money to fraud, taxpayers ultimately bear the risk. That policy rationale translated into 30 years maximum imprisonment. Today, bank fraud is used to prosecute everything from check kiting schemes to sophisticated mortgage fraud to pandemic loan abuse. The statute is broad, the penalties are severe, and federal prosecutors love it for exactly those reasons.

The 30-Year Sentence That Sets Bank Fraud Apart

Heres the paradox that most defendants dont understand untill its to late. Bank fraud carries a 30-year maximum sentence but has absolutly no mandatory minimum. Zero floor. A judge can give you probation for a $500,000 fraud, or give someone else 20 years for the same amount. The sentencing guidelines provide structure, but judges have full discretion to depart from them. This creates a system were outcomes can vary wildly based on factors that have nothing to do with what you actualy did.

The 30-year maximum matters even if most defendants never recieve it. It creates leverage. When your facing 30 years per count across multiple counts, the theoretical exposure becomes staggering. A 10-count bank fraud indictment carries 300 years of theoretical maximum sentence. Nobody gets 300 years for bank fraud, but that number sits in the background of every plea negotiation, every decision about wheather to cooperate, every calculation about going to trial.

What determines your actual sentence? The federal sentencing guidelines. You start with a base offense level of 7. Then you add enhancements for loss amount, number of victims, sophisticated means, abuse of trust, and other factors. By the time the calculation is done, your looking at a guidelines range that tells the judge were most sentences for similar conduct fall. In 2025, federal judges follow that guidelines range about 50% of the time. The other half, they depart – sometimes lower, sometimes higher.

Heres what makes bank fraud different from other fraud statutes. The “knowingly” standard. For mail fraud and wire fraud, prosecutors have to prove you intended to defraud. For bank fraud, they only need to prove you “knowingly” executed a scheme. Thats a lower bar. You dont have to intend harm – you just have to know what your doing. Defense attorneys fight about this distinction constantly, but courts have consistantly held that bank fraud is easier to prove then its older siblings.

Why Loss Calculation Matters More Than What You Stole

OK so heres were bank fraud sentencing gets completly counterintuitive. The amount you actualy stole often matters less then how the government calculates “loss” under the sentencing guidelines. And loss dosent mean what you think it means.

Under Section 2B1.1, loss is defined as the greater of “actual loss” or “intended loss.” Actual loss is the reasonably foreseeable pecuniary harm that resulted from your offense. Intended loss is the harm you purposely sought to inflict – including harm that was impossible or unlikely to occur. Read that again. You can be sentenced based on what you intended to take, even if you took nothing, even if your scheme never could of worked.

The loss table in the guidelines adds offense levels based on the calculated amount:

• More then $6,500 adds 2 levels
• More then $15,000 adds 4 levels
• More then $40,000 adds 6 levels
• More then $100,000 adds 8 levels
• More then $400,000 adds 10 levels
• More then $1 million adds 12 levels
• More then $9.5 million adds 20 levels
• Over $550 million adds 30 levels

A standard bank fraud case involving $100,000 in calculated losses could have an offense level of 15 before other enhancements. At Criminal History Category I, thats a guidelines range of 18-24 months. Add sophisticated means (+2), abuse of trust (+2), and maybe a leadership role (+2-4), and your suddenly at offense level 21-23, with a guidelines range of 37-57 months. Thats 3-5 years for what started as a $100,000 case.

Heres the kicker. Loss calculations often include amounts you never touched – projected future losses, losses that would of occurred if the scheme continued, losses to co-conspirators you never met. The fight over loss amount is frequenly the most consequential part of a bank fraud case becuase it directly determines your guidelines range.

The 10-Year Window That Never Closes

Most federal crimes have a 5-year statute of limitations. Bank fraud gets 10. Congress decided that fraud against financial institutions deserves more time to investigate and prosecute. What that means for defendants is that your not safe just becuase years have passed.

Think about what this means practicaly. Bank fraud committed in 2015 can still be prosecuted in 2025. PPP loan fraud from 2020 can be prosecuted until 2030. The COVID-19 EIDL Fraud Statute of Limitations Act of 2022 specificaly extended the window for pandemic loan fraud to 10 years. Federal prosecutors are still building cases against people who thought they got away with PPP fraud five years ago. They didnt.

Heres an uncomfortable truth about the statute of limitations thats even worse. Its an affirmative defense. That means if you dont raise it, you waive it. The government can indict you, take you to trial, convict you, and sentence you to prison – even if the statute of limitations had expired – unless your defense attorney raises the issue and moves to dismiss. If the defense fails to raise it before or during trial, the defense is waived and a conviction stands.

The 10-year window also means that evidence degrades, witnesses forget, and proving your innocence becomes harder over time. Bank records might be destroyed after the normal retention period. Employees who could testify to your state of mind might of moved on. The longer prosecutors wait to charge, the harder it is to mount a defense – but there still within there window to prosecute.

How a Bank CEO Got 24 Years – The Shan Hanes Case

Shan Hanes was the CEO of Heartland Tri-State Bank in Elkhart, Kansas. Trusted by his community. Respected in his profession. He ended up sentenced to 293 months in federal prison – more then 24 years – for embezzling $47.1 million from his own bank in a cryptocurrency scheme that caused the bank to fail.

Heres the irony that should make you think. Hanes was the victim of a “pig butchering” scam – a sophisticated fraud were criminals build relationships with targets over time before convincing them to invest in fake crypto opportunities. He fell for it. Then he started stealing from his bank to keep feeding money into the scam, believing he would eventualy get his returns. He didnt. The bank collapsed. Depositors lost money. The FDIC had to step in.

The man who ran a bank – who understood financial crime better then most – fell for a scam and then committed massive bank fraud trying to chase his losses. His 24-year sentence reflects not just the amount stolen but the catastrophic consequences: a bank failure, destroyed trust, and community devastation.

Compare that to Matthew Thomas Onofrio, who orchestrated a $420 million bank fraud scheme in Minnesota. He coached novice investors to lie to banks to obtain loans they couldnt afford based on false information. His sentence? 36 months. Three years for a scheme ten times larger then what Hanes did.

How is that possible? The loss calculation. Hanes’s fraud caused actual, quantifiable losses – $47 million that the bank will never recover. Onofrios scheme involved $420 million in inflated property values and fraudulent loans, but the actual losses to banks may have been much lower. The sentencing guidelines care about calculated loss, not the headline number. And they care about aggravating factors like breach of trust, which Hanes’s position as CEO guarenteed.

Bank Fraud vs. Wire Fraud – Why Prosecutors Charge Both

If you applied for a PPP loan online and submitted false information, you commited both bank fraud AND wire fraud. The same conduct. The same application. But two seperate federal crimes. Prosecutors routinly charge both becuase it gives them maximum leverage.

Heres how it works. Wire fraud is any scheme to defraud using electronic communications – emails, online forms, electronic transfers. Bank fraud is any scheme to defraud a federally insured financial institution. When you submit a fraudulent loan application electronically to a bank, you’ve used wire communications (wire fraud) to defraud a financial institution (bank fraud). Same act, two crimes.

Why does this matter? Each statute is a seperate count. Each count carries its own maximum sentence. Wire fraud affecting a financial institution carries up to 30 years – the same as bank fraud. So now your facing 30 years for wire fraud AND 30 years for bank fraud for what was essentially one fraudulent application. Multiply that by however many applications or transactions were involved, and the theoretical exposure becomes overwhelming.

The practical effect is plea leverage. When your facing 60 years of theoretical exposure on two counts for submitting one fraudulent application, fighting the charges becomes mathmaticaly irrational. The system is designed to secure guilty pleas through overwhelming threat. Most defendants plead guilty becuase the alternative – going to trial and loosing on all counts – could mean decades in prison instead of years.

This isnt unique to bank fraud. Prosecutors stack wire fraud with mail fraud, conspiracy charges, and money laundering counts whenever possible. But bank fraud cases are particularly likely to see multiple statutes charged becuase bank transactions almost always involve both electronic communications and financial institutions.

The Sentencing Math That Determines Your Prison Time

Let me show you exactly how a bank fraud sentence is calculated. This is the math that determines wheather your doing 18 months or 18 years.

Start with base offense level: 7 (becuase bank fraud carries a 30-year maximum).

Add loss amount. Say prosecutors calculate $750,000 in losses. Thats +14 levels under the current guidelines. Your now at offense level 21.

Add 10 or more victims? Thats +2 levels. Offense level 23.

Used sophisticated means (shell companies, fake documents, complex schemes)? Another +2 levels. Offense level 25.

Did you abuse a position of trust (bank employee, loan officer, financial advisor)? Add +2 levels. Offense level 27.

Were you an organizer or leader of the scheme? Add +2 to +4 levels. Offense level 29-31.

At Criminal History Category I (no prior convictions) with offense level 29, your guidelines range is 87-108 months. Thats 7-9 years in federal prison. For someone with no criminal history.

Now consider what happens if you plead guilty. You get a 3-level reduction for acceptance of responsibility. Offense level drops to 26. Guidelines range: 63-78 months. Still 5-6.5 years, but significanly better then the trial scenario.

If you go to trial and loose? No acceptance reduction. Offense level stays at 29 or goes higher if the judge finds obstruction (lying on the stand adds 2 levels). Your looking at 7-9 years minimum, possibly more.

Thats the math. Thats the reality. Understanding these numbers is essential to making informed decisions about your case.

PPP Fraud in 2025 – Why Sentences Are 40% Longer Now

Heres something that should terrify anyone who commited PPP loan fraud and hasnt been caught yet. Defendants sentenced in 2024-2025 are recieving sentences aproximately 40% longer then defendants who commited identical conduct but were sentenced in 2021-2022. Same crime. Dramatically different outcomes.

Early in the pandemic, some federal judges showed leniency. The economy was in chaos. People were desperate. Some judges gave probation or minimal prison time for smaller PPP frauds. Those days are completly over. Federal judges in 2025 include prison time in nearly every PPP and EIDL fraud sentencing – regardless of the amount involved.

A Cincinnati defendant got 18 months for a $21,000 PPP loan fraud in March 2025. Thats almost $1,200 per month of prison time for every thousand dollars fraudulently obtained. A Nevada man got over 15 years for $11 million in PPP fraud. The message from federal courts is clear: pandemic relief fraud will be punished severely.

The statute of limitations means this isnt over. PPP loans were issued primarily in 2020 and 2021. With a 10-year prosecution window, federal prosecutors have until 2030 or 2031 to bring charges. The FBI, IRS Criminal Investigation, and SBA Office of Inspector General are still activly investigating. If you obtained a fraudulent PPP loan and havent been contacted by investigators yet, dont assume your in the clear.

The combination of longer sentences and extended statute of limitations creates a dangerous situation for anyone who commited PPP fraud. Waiting dosent help. Evidence dosent dissapear. And when prosecutors eventualy file charges, judges in 2027 or 2028 will likely be even less sympathetic then judges today.

Three Mistakes That Destroy Bank Fraud Defendants

After everything weve covered, here are the three mistakes that consistantly destroy defendants in bank fraud cases.

Mistake one: Assuming the amount determines the sentence. As we saw with the Hanes vs. Onofrio comparison, the headline fraud amount often has little relationship to the actual sentence. A $47 million fraud got 24 years while a $420 million fraud got 3 years. What matters is calculated loss under the guidelines, aggravating factors like breach of trust, and the specific circumstances of your case. Dont assume a “small” fraud means a small sentence.

Mistake two: Talking to investigators without counsel. Federal bank fraud cases are investigated by FBI, IRS Criminal Investigation, and bank regulatory agencies. These are professional interrogators who are legaly allowed to lie to you about the evidence they have. Anything you say will be used against you – and making false statements to federal agents is itself a federal crime. Defendants who try to explain there way out of investigations usualy talk there way into additional charges.

Mistake three: Waiting to hire an attorney. The 10-year statute of limitations means prosecutors can take there time building cases. But that dosent mean you should wait. Pre-indictment intervention can sometimes prevent charges or reduce them. Once your indicted, options narrow dramaticaly. If you have any reason to beleive your under investigation for bank fraud, getting experienced federal defense counsel involved immediatly is critical.

What To Do If Your Facing Bank Fraud Charges

If your facing bank fraud charges or beleive your under investigation, heres what you need to understand immediatly.

Stop all communication about the case. Dont talk to investigators without your attorney present. Dont discuss the case with friends, family, or former colleagues who might be witnesses. Dont post anything on social media. Every word you say can and will be used against you.

Get a federal criminal defense attorney now. Not a state court attorney who occasionaly handles federal cases. Someone who understands federal sentencing guidelines, loss calculations, and how to negotiate with federal prosecutors. The earlier you get counsel involved, the more options you have.

Have your attorney calculate your guidelines exposure. You cant make informed decisions without understanding the math. What loss amount will prosecutors seek? What enhancements might apply? What would your sentence look like if you plead versus if you go to trial? These numbers drive everything.

Dont destroy evidence. Obstruction of justice adds levels to your offense and destroys any credibility you might of had. If you have documents or communications related to the alleged fraud, preserve them and give them to your attorney. Trying to hide evidence almost always makes things worse.

Consider cooperation early. In multi-defendant cases, the first person to cooperate often gets the best deal. Waiting to see what happens while others negotiate with prosecutors can leave you holding the bag. This isnt always the right strategy, but its a conversation you need to have with your attorney before opportunities close.

Bank fraud carries 30 years maximum precisely becuase Congress wanted to deter fraud against the banking system. The penalties are severe, the statute of limitations is long, and federal prosecutors have every tool they need to secure convictions. Understanding how the system works is the first step toward protecting yourself within it.