White-Collar Crime

While armed robberies immediately catch the public's attention, the amount stolen is only a fraction of the total lost to financial institutional fraud on a yearly basis. In an attempt to protect U.S. banking, the FBI assists institutions in the identification of fraudulent schemes and aggressively pursues suspicious activity if it is reported to the agency.

Financial institution fraud, commonly called bank fraud, can range from a one-person operation at one local bank to criminal conspiracies defrauding large U.S. banking institutions. In the 1980s and early 1990s, the FBI reported that 60 percent of bank fraud involved "insider" abuse, from the bank's own employees who used institutional funds for their own use—sometimes to such an extent that the bank collapsed.

A prime example of widespread misuse of bank funds was the savings and loan industry collapse in the 1980s. Savings and loans primarily lent money to the construction and home-building industries, but bank officers at numerous institutions diverted millions of dollars, much of which was never recovered. By the time the savings and loans became aware of the missing funds, so much money had been taken the banks could no longer conduct business and were forced to closed. By the twenty-first century, financial failure cases from insider abuse had been almost entirely replaced by external or outside fraud—mostly check or loan fraud by bank customers, not employees.

Check fraud is the use of fake or doctored checks to illegally receive payment from financial institutions. Major types of check fraud include forgery and counterfeiting. Billions of dollars are lost to check fraud every year.

Check fraud generally begins with the theft of a real check—from a mailbox, the garbage, or from a home or vehicle burglary. After chemically washing out the recipient's name and the signature, the criminal signs the check and cashes it at a store or bank with false identification. This is an example of forgery. Counterfeiting means reproducing more checks to look like the original stolen check. Counterfeiting has become a criminal art that extends far beyond making fake checks.

Criminals use computer software to produce credit cards, travelers checks, payroll checks, U.S. Department of Agriculture food coupons, U.S. postage stamps, and of course, U.S. currency. Counterfeiting is easily accomplished using computers, copiers, scanners, and laser printers. Simply logging onto the Internet and entering the terms check fraud or counterfeiting into a search engine can lead to information on how to produce fraudulent documents.