18 U.S.C. § 657 – Theft, embezzlement, or misapplication from lending, credit, or insurance institutions
§ 657 makes it a federal crime to steal, misuse, or intentionally misapply money or property belonging to federally connected lending, credit, or insurance institutions.
Section 657 applies to a wide range of financial institutions that are backed, regulated, or insured by the federal government. This includes credit unions, savings and loan associations, mortgage lenders, federal farm credit institutions, community development financial institutions, and other federally supported lending or insurance programs. The law targets employees, officers, agents, and anyone entrusted with these institutions’ funds.
What the law prohibits.
A person violates this statute if they knowingly:
- Embezzle, steal, or misapply money or property belonging to a covered lending, credit, or insurance institution.
- Convert or divert assets for personal use or someone else’s benefit without authorization.
- Cause the institution to suffer a financial loss through dishonest, improper, or unauthorized conduct.
- Attempt to commit any of these acts.
This law also applies to receivers and employees acting on behalf of institutions in liquidation or supervision. In short, anyone handling the institution’s money can be prosecuted if they misuse or divert those funds.
Penalties.
The severity of punishment depends on the amount taken or misapplied:
- If the amount exceeds $1,000: up to 30 years in federal prison and fines up to $1,000,000.
- If the amount is $1,000 or less: up to 1 year in prison and fines (misdemeanor-level penalties).
If you’re accused of embezzlement or misuse of institutional funds under § 657, call (314) 900-HELP or contact our federal criminal defense attorneys for guidance.
