A loan paperwork charge with a 30-year ceiling
If you just learned you are under investigation for lying to a bank, or you just read an indictment built on a loan application with your name on it, the shock is where you should start. People in this spot describe the same feeling. The application, the income figure, the property value were paperwork at the time. Now each line reads like evidence.
This charge is broader than its old nickname suggests. It is often called bank false statements, but the statute reaches far beyond banks, to mortgage lenders, credit unions, federal agencies that back or insure loans, and others. Start with our overview of federal fraud charges for the full family, then use this page for the charge itself.
Nothing below predicts what will happen in your case. The penalties described here are statutory maximums and guideline ranges, not forecasts. The facts of a case change everything.
The exact words of the law in § 1014
False statements to financial institutions are defined at 18 U.S.C. section 1014. The core of the statute reads:
"Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way the action of"
followed by a long list of covered institutions and agencies. That list includes federal agencies that lend or insure, such as the Federal Housing Administration and the Small Business Administration, Federal Reserve banks, federal and insured state-chartered credit unions, any institution with accounts insured by the Federal Deposit Insurance Corporation, the Federal Deposit Insurance Corporation itself, federal home loan banks, a mortgage lending business, and any person or entity that makes a federally related mortgage loan. A loan officer, a broker, and a private mortgage company can all sit inside this list, so the charge is not limited to federally chartered banks.
The statement must be made in connection with a covered transaction. The statute covers an application, advance, discount, purchase, commitment, loan, insurance agreement, or application for insurance or a guarantee, and it expressly reaches later dealings too, quoting here, "or any change or extension of any of the same, by renewal, deferment of action or otherwise". A lie told to renew a loan, defer a payment, or swap collateral can support a charge just as a lie on the original application can.
The penalty sentence is short and severe:
"shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."
Thirty years is the maximum on each count. There is no mandatory minimum under this section.
What the government must prove
A federal judge explains this charge to a jury as three elements, each of which the government must prove beyond a reasonable doubt. The Ninth Circuit pattern instruction, which collects how courts across the country state the charge, puts them this way.
First, the defendant made a false statement or report, or willfully overvalued land, property, or security, to a covered institution. Note the two paths. One is a spoken or written lie. The other is an overvaluation, such as stating property is worth far more than the defendant knows it to be. An honest estimate that turns out wrong is not the same as a willful overvaluation, and that difference is often the heart of the case.
Second, the defendant made the statement knowing it was false. A typo, a misunderstanding of a form, or reliance on figures someone else supplied can attack this element. The government must show the defendant knew the statement was untrue when it was made.
Third, the defendant did so for the purpose of influencing in any way the action of the institution. The phrase in any way is deliberately wide. The statement need not concern the central term of the loan. Anything said to nudge the lender's decision can satisfy this element, if purpose is proved.
One more element hides in the word covered. The institution must actually fall within the statute's list. The Ninth Circuit's model jury instructions state this plainly: "Federally insured status is an element of the crime." Where the lender is a private party outside the list, or where insurance lapsed, this element can be tested. Counsel should verify the lender's status rather than assume it.
What the government does not have to prove under § 1014
This section holds the surprises that make section 1014 different from its neighbors, and each surprise cuts against the defense. Read them carefully.
No materiality. In most fraud charges the lie must matter, meaning it must have a natural tendency to influence the victim. Not here. The Supreme Court held that section 1014 contains no materiality requirement, because as the Court put it in a later decision describing that holding, the statute does not "so much as mention materiality," while many other statutes do. The Ninth Circuit's model jury instructions repeat the rule for this charge: "Materiality is not an element of the crime of knowingly making a false statement to a federally insured bank in violation of 18 U.S.C. § 1014." A defense that the lender would have approved the loan anyway, or that the lie concerned a trivial line, does not defeat the charge. It can still matter at sentencing, but it is not an element.
No actual influence. The instruction states: "It is not necessary, however, to prove that the [specify institution] involved was, in fact, influenced or misled, or that [specify institution] was exposed to a risk of loss." The sentence that follows explains what must be proved instead: "What must be proved is that the defendant intended to influence the [specify institution] by the false statement." Purpose is enough. Success is not required. A loan that was denied, a statement the lender ignored, and a loan repaid in full can all still support a conviction.
No risk of loss. The Ninth Circuit's model jury instructions add: "Proof of a risk of loss to a financial institution is not an element of the crime." Where the lender was always fully secured, or where the borrower repaid every dollar, the charge survives. Loss goes to sentencing, not to guilt.
But there is a new limit on the government's side, and it is the most important development in this area in decades. In Thompson v. United States, decided in March 2025, the Supreme Court held unanimously: "Section 1014 does not criminalize statements that are misleading but true." The word false, the Court explained, means "not true", and a statute that punishes any false statement still demands a statement that is false. As the Court wrote, "it is not enough that a statement is misleading". The Ninth Circuit has since updated its model instruction to match: the term false "does not encompass misleading but true statements". An omission that makes a true statement misleading is outside the statute unless the statement, in context, can be called false rather than true. And context counts. The instruction notes that the surrounding circumstances are "is relevant to determining whether a statement is false under" section 1014. A literally true sentence that in context asserts something untrue can still be false, as when a borrower asked about the total balance names only the smallest loan to imply that is all that is owed.
False statements versus bank fraud under § 1344
False statements have a close neighbor, bank fraud, one chapter nearby in the code at 18 U.S.C. section 1344. Prosecutors often charge both together, and understanding the difference shows where each charge is vulnerable.
Bank fraud punishes a scheme. The government must prove the defendant knowingly carried out, or tried to carry out, a scheme to defraud a financial institution or to get its property by false pretenses. A scheme means a plan with moving parts, and the institution must meet the definition of financial institution in 18 U.S.C. section 20. Crucially, as the Ninth Circuit's model instructions explain, materiality is an element of bank fraud under section 1344, while it is not an element of false statements under section 1014.
False statements punish the lie. No scheme is needed. A single false figure on a single application can be enough, if knowledge and purpose to influence are proved. And the covered entities under section 1014 go beyond the section 20 definition, reaching agencies and mortgage businesses that bank fraud might not touch.
That difference decides strategy. Where the government alleges an elaborate plan against a bank, expect bank fraud, possibly alongside false statements for each document. Where the case is one application, one inflated appraisal, or one understated debt, expect section 1014 standing alone. If your paperwork cites section 1344 instead, read the bank fraud page, because the scheme element and the materiality requirement change the defense.
The penalties on paper
Take every number in this section as a ceiling, not as a sentence. No page can predict a sentence, because loss amounts, criminal history, and the judge all move the result.
Prison. The maximum is 30 years on each count, with a fine up to one million dollars. Counts add up. A case built on three loan applications can contain several counts, each carrying its own maximum, which is why multi-count indictments look so alarming on first reading.
Felony class and supervision. A 30-year maximum makes the offense a Class B felony, because the code classifies an offense carrying "twenty-five years or more, as a Class B felony". For a Class A or Class B felony, the supervised release term that can follow prison is "for a Class A or Class B felony, not more than five years". That supervision follows prison and carries conditions that can return a person to court if violated.
Restitution. Money is often the largest part of the punishment. Under the Mandatory Victims Restitution Act, courts must order restitution for offenses against property, a category the statute defines as "including any offense committed by fraud or deceit". A false statement conviction routinely brings an order to repay the lender's losses in full, on top of prison and fines.
Time limits. Most federal felonies carry a five-year deadline, but this charge carries a longer one. Under the financial institution offenses provision, no one may be prosecuted for a section 1014 violation "unless the indictment is returned or the information is filed within 10 years after the commission of the offense". Old loan files can come back. If agents are asking about an application signed years ago, do not assume time has run out.
How the guideline sentence is calculated
Prison time in federal court is guided by the United States Sentencing Guidelines. For false statements, the Statutory Index points the case to section 2B1.1, the general fraud and theft guideline. Our federal sentencing page walks through how judges use that range, and the site sentencing calculator models the fraud guideline for rough illustration. Neither replaces advice about a real case.
The starting point is level 7. Under section 2B1.1, the base offense level is 7 where the offense "has a statutory maximum term of imprisonment of 20 years or more". Section 1014 carries 30 years, so it qualifies. Almost everything after that turns on loss.
Loss means the greater of actual loss or intended loss. The guideline states it plainly: "Loss is the greater of actual loss or intended loss." Actual loss is the reasonably foreseeable money harm that resulted. Intended loss is the harm the defendant purposely sought to inflict, even if it was impossible, as in a sting where no loan could ever fund. Because intended loss counts, a denied application can sentence like a funded one.
The loss table at section 2B1.1(b)(1) then adds levels in steps. There is no increase for loss of 6,500 dollars or less. Above that the levels climb with the dollars. A loss over 150,000 dollars adds 10 levels. A loss over 550,000 dollars adds 14. A loss over 1,500,000 dollars adds 16. A loss over 9,500,000 dollars adds 20. The table runs all the way to 30 added levels for losses over 550,000,000 dollars. These are the current Manual's figures. For sentencings on or after November 1, 2026, Amendment 2 of the Sentencing Commission's 2026 amendments raises each threshold, unless Congress acts: no increase for 9,000 dollars or less, 10 levels over 200,000 dollars, 14 over 750,000, 16 over 2,000,000, 20 over 15,000,000, and 30 over 750,000,000 dollars. Each step up in loss is usually the single biggest driver of the final range, which is why the fight over the loss number is often the fight over the case.
Victim-related increases follow. Ten or more victims, mass marketing, or substantial hardship to even one victim adds 2 levels. Hardship to five or more victims adds 4. Hardship to 25 or more adds 6. Only the greatest of these applies.
Sophisticated conduct adds more. Relocating a scheme to dodge law enforcement, running a substantial part of it from outside the country, or using sophisticated means on purpose adds 2 levels, with a floor that raises the result to at least level 12.
Then come the increases written for cases like this one. Under section 2B1.1(b)(17), a defendant who "derived more than $1,000,000 in gross receipts from one or more financial institutions as a result of the offense" receives a 2-level increase. Where the offense "substantially jeopardized the safety and soundness of a financial institution", the increase is 4 levels, with a floor that raises the result to at least level 24. These provisions punish the institutional harm that section 1014 exists to prevent, and they can move a sentence more than any other single adjustment.
Criminal history then meets the offense level on the sentencing table to produce a range in months. The range advises the judge. It does not bind the judge, and the statutory maximum caps everything.
Defenses that actually arise
Every defense below flows from the elements above. None promises an outcome. Each depends on facts, documents, and the law of the circuit where the case sits.
Falsity after Thompson. The threshold question is now whether the statement was false, not whether it misled. Counsel examines each charged sentence in its full context, the question asked, the form used, the conversation around it. A true statement with an omitted detail is outside the statute. A statement that sounds true in isolation but asserts something untrue in context can still be false. This defense did not exist in usable form before 2025, and older advice that treats misleading as enough is out of date.
No knowledge. The government must prove what was in the defendant's mind. Errors on complex forms, figures supplied by a broker or preparer, and misunderstandings about what a question asked can rebut knowledge. A borrower who repeated numbers a professional provided, without reason to doubt them, attacks the second element directly.
No purpose to influence. Routine paperwork sent after approval, corrected statements volunteered before any decision, and documents the lender never saw can raise doubt about purpose. Remember the government's burden is purpose, not success, so this defense argues about intent, not about outcome.
Overvaluation versus opinion. The statute punishes one who willfully overvalues property. A stated opinion of value, a good faith estimate flagged as uncertain, and an appraisal that follows standard methods are different from a knowingly inflated figure. The word willfully does real work here, and valuation fights turn on documents and experts.
The lender was not covered. The institution must sit inside the statute's list. Where the lender is an unlisted private party, where federal insurance had lapsed, or where the transaction falls outside the covered categories, the charge fails on its own terms. Verify, do not assume.
The check rule. In an older case described in the Thompson opinion, the Supreme Court reversed a section 1014 conviction built on bad checks, reasoning that a check itself is not a factual assertion and so cannot be called true or false. Conduct that moves money without asserting facts may belong under a different statute, not this one.
The small-case policy. The Justice Department's own prosecution policy says fraud cases ordinarily should not be brought on minor private disputes: "Prosecutions of fraud ordinarily should not be undertaken if the scheme employed consists of some isolated transactions between individuals, involving minor loss to the victims, in which case the parties should be left to settle their differences by civil or criminal litigation in the state courts." The Department's general prosecution principles likewise demand that federal charges serve a substantial federal interest and that the evidence will probably sustain a conviction, quoting the standard as "the admissible evidence will probably be sufficient to obtain and sustain a conviction". Where the facts fit that description, counsel can and should put the policy on the table early.
What to do right now
If agents have contacted you, if you received a subpoena, or if your lender's files have been requested, take three steps before anything else. First, say nothing about the facts to agents, to coworkers, or in writing. You cannot talk the case away, and every explanation becomes material for knowledge and purpose. Second, preserve everything. Do not alter, delete, or backdate loan files, emails, or messages. Alteration creates an obstruction problem dwarfing the original charge. Third, get a federal criminal lawyer involved immediately, before any meeting or proffer. Early counsel can sometimes shape the scope of the investigation, negotiate the terms of any contact, and keep a bad situation from growing.
If charges are already filed, the same advice holds with more urgency. Read the indictment with counsel, count by count and statement by statement. For each charged statement, ask whether it was false in context, whether you knew it was false, and whether it was said to influence the lender. Find out the loss figure the government claims and how it got there, because in most section 1014 cases the loss fight is the sentencing fight.
One last plain statement. This page describes maximums and ranges set by law. It does not and cannot say what any person will receive. Judges weigh the guidelines, the history of the person before them, and the details of what happened. The facts of a case change everything, and the only sentence that matters is the one imposed in a real courtroom.