§656. Theft, embezzlement, or misapplication by bank officer or employee

Whoever, being an officer, director, agent or employee of, or connected in any capacity with any Federal Reserve bank, member bank, depository institution holding company, national bank, insured bank, branch or agency of a foreign bank, or organization operating under section 25 or section 25(a) ¹ of the Federal Reserve Act, or a receiver of a national bank, insured bank, branch, agency, or organization or any agent or employee of the receiver, or a Federal Reserve Agent, or an agent or employee of a Federal Reserve Agent or of the Board of Governors of the Federal Reserve System, embezzles, abstracts, purloins or willfully misapplies any of the moneys, funds or credits of such bank, branch, agency, or organization or holding company or any moneys, funds, assets or securities intrusted to the custody or care of such bank, branch, agency, or organization, or holding company or to the custody or care of any such agent, officer, director, employee or receiver, shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both; but if the amount embezzled, abstracted, purloined or misapplied does not exceed $1,000, he shall be fined under this title or imprisoned not more than one year, or both.

As used in this section, the term "national bank" is synonymous with "national banking association"; "member bank" means and includes any national bank, state bank, or bank and trust company which has become a member of one of the Federal Reserve banks; "insured bank" includes any bank, banking association, trust company, savings bank, or other banking institution, the deposits of which are insured by the Federal Deposit Insurance Corporation; and the term "branch or agency of a foreign bank" means a branch or agency described in section 20(9) of this title. For purposes of this section, the term "depository institution holding company" has the meaning given such term in section 3 of the Federal Deposit Insurance Act.

(June 25, 1948, ch. 645, 62 Stat. 729 ; Pub. L. 101–73, title IX, §961(b), Aug. 9, 1989, 103 Stat. 499 ; Pub. L. 101–647, title XXV, §§2504(b), 2595(a)(1), 2597(f), Nov. 29, 1990, 104 Stat. 4861 , 4906, 4909; Pub. L. 103–322, title XXXIII, §330016(1)(H), Sept. 13, 1994, 108 Stat. 2147 ; Pub. L. 104–294, title VI, §§601(f)(1), 606(a), Oct. 11, 1996, 110 Stat. 3499 , 3511.)

Historical and Revision Notes

Based on sections 592, 597 of title 12, U.S.C., 1940 ed., Banks and Banking (R.S. 5209; Dec. 23, 1913, ch. 6, §22(i), as added June 19, 1934, ch. 653, §3, 48 Stat. 1107 ; Sept. 26, 1918, ch. 177, §7, 40 Stat. 972 ; Aug. 23, 1935, ch. 614, §316, 49 Stat. 712 ).

Section 592 of title 12, U.S.C., 1940 ed., Banks and Banking, was separated into three sections the first of which, embracing provisions relating to embezzlement, abstracting, purloining, or willfully misapplying moneys, funds, or credits, constitutes part of the basis for this section. Of the other two sections, one section, 334 of this title, relates only to the issuance and circulation of Federal Reserve notes and the other, section 1005 of this title, to false entries or the wrongful issue of bank obligations.

The original section, containing more than 500 words, was verbose, diffuse, redundant, and complicated. The enumeration of banks affected is repeated eight times. The revised section without changing in any way the meaning or substance of existing law, clarifies, condenses, and combines related provisions largely rewritten in matters of style.

The words "national bank" were substituted for "national banking association," the terms being synonymous by definition of section 221 of title 12, U.S.C., 1940 ed., Banks and Banking, written into the last paragraph of this section. This change made possible the use of the term "such bank" in substitution for the words "such Federal Reserve bank, member bank, or such national banking association, or insured bank," in each of seven instances.

The special and separate provisions of the original section relating to embezzlement by national bank receivers or Federal Reserve agents are readily combined in the revised section by including these officers in the initial enumeration of persons at whom the act is directed and by inserting the word "purloins" after "embezzles, abstracts," and the phrase "or any moneys, funds, assets, or securities intrusted to the custody or care," following the words "of such bank".

The last paragraph of the revised section includes the definitions of sections 221 and 264(c) of title 12, U.S.C., 1940 ed., Banks and Banking, made applicable by express provision of the original section. These were written in, with only such changes of phraseology as were necessary, in order to make the revised section complete and self-contained. For meaning of "bank," as used in bank robbery statute, see section 2113 of this title.

Section 597 of title 12, U.S.C., 1940 ed., Banks and Banking, likewise was separated into two parts, one of which was combined with the embezzlement provisions of said section 592 to form this section. The other part was combined with the related provisions of said section 592 to form section 1005 of this title.

It will be noted that section 597 of title 12, U.S.C., 1940 ed., Banks and Banking, was limited to "Whoever, being connected in any capacity with a Federal Reserve bank"; that it enumerated "note, debenture, bond, or other obligation, or draft, mortgage, judgment, or decree"; and that it stipulated punishment by fine of not more than $10,000 or imprisonment of not more than 5 years, or both.

In combining these provisions, the words "or connected in any capacity" were written into the new section after the words "employee of," thus making them applicable not only to Federal Reserve banks but to the other banks as well. The phrase of section 592 of title 12, U.S.C., 1940 ed., Banks and Banking, "or who, without such authority, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment, or decree," was modified to include the enumeration of like obligations in section 597 of title 12, U.S.C., 1940 ed., Banks and Banking, and to read as follows: "whoever without such authority makes, draws, issues, puts forth, or assigns any certificate of deposit, draft, order, bill of exchange, acceptance, note, debenture, bond, or other obligation or mortgage, judgment, or decree". (See section 1005 of this title.)

As thus changed the new section is clear, simple, and unambiguous. The very slight changes of substance that have been noted, were unavoidable if the two sections were to be combined. Without combination any constructive revision of these duplicitous and redundant provisions was impossible. It is believed that the revised sections adequately and correctly represent the intent of Congress as the same can be gathered from the overlapping and confusing enactments. At any rate, the severest criticism of the revised sections is that a person connected with a Federal Reserve bank who violates these sections can at most be punished by a fine of $5,000 or imprisonment of 5 years, or both, whereas under section 597 of title 12, U.S.C., 1940 ed., Banks and Banking, he might have been fined $10,000 or imprisoned 5 years, or both. Obviously an embezzler will rarely be financially able to pay even a $5,000 fine even where such fine is imposed. Certainly if it is an adequate fine for a national bank president it is not too disproportionate for a person "connected in any capacity with a Federal Reserve bank".

The smaller punishment for an offense involving $100 or less was added. (See reviser's notes under sections 641, 645 of this title.)

The words "shall be deemed guilty of a misdemeanor" were omitted as unnecessary in view of definitive section 1 of this title.

The words "upon conviction thereof" were omitted as unnecessary, since punishment cannot be imposed without conviction.

Words "In any district court of the United States" were omitted as unnecessary since section 3231 of this title gives the district courts jurisdiction of criminal prosecution.

Senate Revision Amendment

Certain words were stricken from the section as being unnecessary and inconsistent with other sections of this revision defining embezzlement and without changing existing law. See Senate Report No. 1620, amendment No. 6, 80th Cong.

Editorial Notes

References in Text

Section 25 of the Federal Reserve Act, referred to in text, is classified to subchapter I (§601 et seq.) of chapter 6 of Title 12, Banks and Banking. Section 25(a) of the Federal Reserve Act, which is classified to subchapter II (§611 et seq.) of chapter 6 of Title 12, was renumbered section 25A of that act by Pub. L. 102–242, title I, §142(e)(2), Dec. 19, 1991, 105 Stat. 2281 .

Section 3 of the Federal Deposit Insurance Act, referred to in text, is classified to section 1813 of Title 12.

Amendments

1996-Pub. L. 104–294, in first par., substituted "Federal Reserve Act," for "Federal Reserve Act,," and "$1,000" for "$100".

1994-Pub. L. 103–322, in first par., substituted "fined under this title" for "fined not more than $1,000" after "he shall be".

1990-Pub. L. 101–647, §2597(f)(1), in first par., directed substitution of "national bank, insured bank, branch or agency of a foreign bank, or organization operating under section 25 or section 25(a) of the Federal Reserve Act," for "national bank, or insured bank" which was executed by making the substitution for "national bank or insured bank" to reflect the probable intent of Congress, and inserted "insured bank, branch, agency, or organization" after "receiver of a national bank,", ", branch, agency, or organization" after "misapplies any of the moneys, funds or credits of such bank", and "branch, agency, or organization" after "custody or care of such bank,".

Pub. L. 101–647, §2595(a)(1)(A), (B), in first par., inserted "depository institution holding company," after "Federal Reserve Bank, member bank," and "or holding company" after "such bank" in two places.

Pub. L. 101–647, §2504(b), in first par., substituted "30 years" for "20 years".

Pub. L. 101–647, §2597(f)(2), in second par., struck out "and" after "one of the Federal Reserve Banks;" and directed insertion of "; and the term 'branch or agency of a foreign bank' means a branch or agency described in section 20(9) of this title" before the period which was executed by making the insertion before the period at end of first sentence to reflect the probable intent of Congress.

Pub. L. 101–647, §2595(a)(1)(C), in second par., inserted at end "For purposes of this section, the term 'depository institution holding company' has the meaning given such term in section 3 of the Federal Deposit Insurance Act."

1989-Pub. L. 101–73, in first par., substituted "$1,000,000" for "$5,000" and "20 years" for "five years".

¹ See References in Text note below.