2

From what I gather people sometimes may devise fake proof of income to be granted loans -- loans they don't expect to pay back anytime soon or in some cases ever.

It's probably very easy to fake proof of income in digital documents. Lenders may only consider bank statements or taxes and that can all easily be faked as well. Given that you lied about income, when or why would it be a crime in the case of obtaining a loan vs. just lying about it in general?

I doubt there's a specific, particular law that states lying about income to obtain income is illegal.

Fraud is a very gray area kind of criminal act -- often it's excessively hard or impossible to define it.

In such an example, a person may get a $100,000.00 loan when they make $9,000/year through the deception. I assume, if you can pay any of it back at any rate, you'd have no reason to be in trouble.

But how might it really go down?

As an example, a friend needs some fast money to go to Canada, but he in no way can get $6,000 he needs for what he plans to do in just 5 days. His plan? Lie about income and obtain that amount from a lender, with intention to pay back -- just probably not within the means/rate/amount the lender may establish. So he does intend to pay back -- just wants to use deception to convince the lender that he has the capability/income to pay that amount back when he doesn't as of right now.

  • 1
    "Fraud is a very gray area kind of criminal act". Not really. Your example is going to be fraud in every jurisdiction I can think of. – Martin Bonner supports Monica Mar 3 '16 at 12:56
  • Complex cases may be hard to define, but falsifying documents and lying on application forms shows clear intent to deceive and almost all legal systems will have something in place to make that clearly illegal. In fact, you'd probably be contravening multiple laws. And that's just the bit where you apply for the money - if you get it and have trouble paying it back you could have some very serious problems. – Dan Mar 3 '16 at 18:04
6

18 USC §1344:

Whoever knowingly executes, or attempts to execute, a scheme or artifice

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representation, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

Here are some example prosecutions:

  • There are similar statutes in England and Wales. I would be very surprised to find a country with a legal system that didn't make such action criminal. – Martin Bonner supports Monica Mar 3 '16 at 12:54

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.