JOEL - As far as I have been able to determine there was no intention of fraud by Joseph Smith in regards to the Kirtland Safety Society(Bank). It was something that he determined was desperately needed in order to stabilize the ecconomy of their society. Unfortunately, when church leaders tried to establish the bank, the Ohio legislature would not grant them a charter, so they set up a different kind of institution(much like today's credit unions) which did not need state approval. However this lack of chartering made it difficult for their bank notes to be honored at other banking institutions which lowered the value of the notes.
Because of some poor management, speculations, and other internal and external conditions, including the financial and socioeconomic factors relative to the United States at that time, the project was ultimately a failure. This was not uncommon with many of the banking institutions of that time. The decade of the 1830s was a period of great proliferation in the number of banks because of the demand for credit to finance Western expansion. The quick growth in the banking industry also created instability, particularly along the Western frontier, because few bank founders had the experience to expertly manage a bank, including Joseph Smith and his partners. Joseph made every effort to assure the success of the bank, and when failure seemed eminent, he attempted to minimize the cost to others, and made every effort to repay as much of his debts as he was able. The crash of 1837 brought a run on the banks, which caused many of them to fail, including the failure of the Kirtland Safety Society, which was initiated by the embezzlement of $25,000 by one of the bank's officers(Warren Parrish).
Critics of the church have made more of this than it deserves, claiming Joseph Smith was a fraud and swindler. There is an extensive article on this subject by Wade England, who responds to the accusations of the Tanners, called "The Kirtland Bank/Disaster?" It is at this site.