Check kiting is a form of federal bank fraud. It involves a circular cycle of writing checks and making deposits from accounts that lack sufficient funds. Because of the delay in clearing transactions, the perpetrator is able to withdraw funds that do not actually exist in the account.
When is the best time to act?:
Check kiting is a very serious white collar crime. The larger the scheme, the more complex the case and the more severe the potential penalty. Criminal Lawyer Group understands the complex nature of these cases because the attorneys have represented clients charged in large-scale financial institution frauds. We help put the defense on the right track from the start. That is why it is so critical for defendants and potential defendants in check kiting cases to seek our counsel as soon as possible.
Types of Crimes/ Charges:
The charge for check kiting is bank fraud under 18 U.S. Code section 1344. The law prohibits defrauding a financial institution or using false or fraudulent pretenses, representations or promises to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution.
A simple example of check kiting is to write a check from Bank A, where you have insufficient funds, and deposit that check into an account at Bank B, which also lacks funds. Before the check goes through, or is rejected for insufficient funds, you withdraw money from Bank B and disappear, leaving the bank with a loss Kiting can occur on a large scale, with many more banks, but quite often it occurs among individual depositors with relatively low-balance accounts. Sometimes, struggling businesses use check kiting to generate enough revenue to stay afloat.
Bank fraud, securities fraud, making false statements and conspiracy often accompany allegations of check kiting.
Penalties & Punishment:
The penalties are the same for a bank fraud conviction — up to a $1 million fine and/or up to 30 years in prison.
Criminal Lawyer Group regularly represents clients accused of bank fraud schemes such as check kiting. Our defense strategies include demonstrating that you did not knowingly execute the scheme, did not defraud the financial institution or did not make material misrepresentations. We have a successful track record in white collar crimes. Clients trust us to take care of every detail.
Differences Between State and Federal Charges:
New York does not have a bank fraud statute. Crimes like those under the federal law would be charged under the state’s bad check law.
High Profile/ Government Case:
In March 2014, the former Chief Executive Officer of food supplier Synergy Brands, Inc., was convicted by a federal jury in Brooklyn for defrauding Signature Bank out of $26 million through a massive check kiting scheme. Mair Faibish funnel approximately $ 1.3 billion worth of checks that were not backed by sufficient funds through Signature and other banks. Faibish and his co-conspirators used Synergy’s fraudulently inflated bank account balances to book millions in fictitious accounts receivable and revenue.