The number of people convicted of fraud at financial institutions last year fell nearly 22%, to 864, according to the Justice Department.

Convictions peaked at 1,185 in 1992.

Declining rates could mean that Justice is doing a better job fighting bank fraud, or that fewer crimes are being perpetrated.

However, John Byrne, senior counsel at the American Bankers Association, said the drop might be a result of less financial crime enforcement by Justice.

Over the past year, money and employees dedicated to financial crime investigations have been transferred to health care and environmental issues, he said.

"This is not necessarily an indication of less fraud," said Mr. Byrne. "We are really concerned about a deemphasis on resource allocation."

Justice's annual "Attacking Financial Institution Fraud" report is limited to major financial fraud cases, which are defined as those where the amount of the loan or loss was more than $100,000. The department breaks down financial institution fraud by banks, thrifts, and credit unions.

Convictions for bank fraud in 1994 dropped 17.3%, to 626, while fraud convictions at S&Ls plunged 37%, to 192.

Though it was not enough to affect the total, convictions for credit union fraud actually rose in 1994, to 46 from 38 the previous year.

Justice also reported that "outsiders" - which include customers and employees of the financial institution other than directors or officers - committed most of the crimes.

From 1989 to 1994, 70% of the financial crimes were committed by outsiders, Justice reported.

Directors and officers made up 22% of the remaining criminals, while chief executive officers, chairmen of boards, and presidents accounted for 8%.

Once accused, most defendants in financial crimes are convicted. From 1989 to 1994, 96% of those charged in all three industries were found guilty.

Of those, 77% were sent to prison. Credit unions had the highest percentage of convictions, almost 100% of those charged. Credit union crime also drew the highest percentage of jail time - 81% of those convicted were put behind bars.

Although conviction rates are down, there are still a lot of crimes being committed against financial institutions.

The report noted, for example, that in July 1994 banks, S&Ls, and credit unions referred 4,000 potential cases to the Federal Bureau of Investigation.

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