Judge Andrew Goymer, said that the bank, along with Allied Irish, had acted "carelessly and imprudently" by lending money to Achilleas Kallakis and Alexander Williams, both 44, without making full inquiries about the pair.
Kallakis and Williams, from London, tried to defraud Allied Irish Banks (AIB) out of £740 million and Bank of Scotland (BoS), as it was known, of £22m between August 2003 and November 2008 in one of Britain's biggest property scams, with loans issued following the production of fake documents. The offences were carried out over five years and funded property and luxury yacht scams.
At Southwark Crown Court, Kallakis, the "prime mover", was jailed for seven years and Williams for five years on two counts of conspiring to defraud.
Judge Goymer said: "The two banks, Allied Irish and Bank of Scotland, have undoubtedly acted carelessly and imprudently by failing to make full enquiries before advancing the money."
The judge noted Bank of Scotland had been warned by its lawyers about the risks of accepting a letter of assurance from a Swiss lawyer backing up Kallakis's application for a loan.