Check fraud is a crime that involves the deceptive or illegal use of checks. In most situations, check fraud involves a person attempting to make a purchase or transaction using a check that has been faked, stolen, altered, or is otherwise not valid. There are many ways to commit check fraud – it isn’t just about purchases.
Depending on the exact circumstances, as well as state law, check fraud may be classified as a misdemeanor or a felony crime.
Check fraud has evolved, and continues to evolve, as newer banking technologies arise.
Eligibility: Anyone with a bank account or who deals with checks, either as a payor or a recipient, could potentially become a victim of check fraud. An individual, business or any other type of organization could become a victim. The specific circumstances of the fraud, especially the amount of money involved, would determine the extent of the impact on the victim. Victims may experience financial losses and potentially identity theft.
What Are Fake Checks?
A “fake check” can involve many different ways that a check can be altered or falsified. Checks can be faked or made fraudulent through many methods, including:
- Altering or faking a signature on a check (forgery)
- Illegally reprinting or reproducing a check using computer technology or scanning technology (counterfeiting)
- Changing the information on a check, such as the banking account number or routing number (check alteration)
- Various other methods
Some other types of fraud schemes can be classified under check fraud. For instance, if a person issues a check to themselves without the other party’s permission or consent, it might be considered fraud (even if the check itself is real and valid). The common denominator in these cases is that some form of deceit is used to manipulate the situation.
Are There Different Types of Check Fraud?
As mentioned, a check can be falsified in many ways, including forgery, counterfeiting, check alteration, and other methods. Check fraud can also involve various ways of using checks that are not legal. These can include:
- Payroll Fraud: This happens when the criminal takes someone else’s paycheck or issues to themselves a paycheck they have not earned and is not authorized by management or the payroll department
- Paperhanging: This happens when the defendant writes a check to make a purchase or other transaction on an account that is closed
- Check Kiting: This is a more complex scheme. The defendant opens several checking accounts and then writes multiple checks from one account to another in amounts greater than the remaining balance in the checking account. They rely on the fact that it takes time for the bank to process a check, and while the bank is doing so, it will let the depositor have at least part of the check as cash.
Some check fraud crimes can involve many people and may occur over months or even years. Some of these types of fraud may be charged under federal law and tried in federal court. This is especially the case for check fraud crimes involving systematic abuses of bank accounts, multiple victims, mail system use, or identity theft.
What Are the Penalties for Committing Check Fraud?
Penalties for check fraud depend on whether the crime is classified as a misdemeanor or a felony. Misdemeanor check fraud is, by definition, punishable by less than one year in county jail as well as a relatively small fine. Felony check fraud is punishable by more than one year in prison and higher criminal fines.
The severity of the punishment typically depends on the amount of money involved in the fraudulent action: the more money involved, the greater the criminal consequences. Smaller amounts of money are usually charged as a misdemeanor. Misdemeanors are typically crimes involving less than $1000. Larger amounts of money can be charged as a felony. Because of this, check fraud may be considered a “wobbler” offense in many states, meaning it can be tried as either a misdemeanor or felony, depending on various elements.
State Variations: For example, in New York state, the punishment for criminal check fraud ranges from 1 year in jail if the defendant is convicted of a misdemeanor to 25 years in state prison for the most serious felony. Whether the crime is charged as a misdemeanor or felony is going to depend on the amount stolen and the number of victims.
In California, if charged as a misdemeanor, check fraud may be punished by a maximum of 1 year in a county jail and or the payment of a fine of up to $1,000. If a defendant is convicted of a felony, they may be punished by 16 months, 2 years, or 3 years in a county jail and/or payment of a fine of as much as $10,000. In addition, the judge may order the defendant to pay full restitution to their victims.
The same is true in other states as well. Check fraud can be charged as a misdemeanor or a felony. A misdemeanor conviction is punished less harshly, a felony conviction more harshly. The punishment is going to involve possible jail or prison time and/or payment of fine and possibly the payment of restitution.
Risks/Penalties: As noted, in California and other states as well, the sentencing judge may require the defendant to compensate the victim for their financial losses. In addition, a criminal conviction goes on a person’s permanent criminal record and can show up in background checks. This can make it difficult for the person to obtain employment, especially in jobs that involve financial responsibility.
A criminal record can also affect a person’s credit scores and make it more challenging to get a loan or rent housing. A criminal conviction can even make it impossible for a person to obtain certain professional licenses or government benefits. It is best not to have a criminal record.
Can You Go To Jail For Depositing a Fake Check?
This depends. If a person knowingly deposits a fake check with the intent to obtain money that is not theirs or to deceive a bank employee, they will usually be subject to criminal consequences. These consequences can include jail time and criminal fines.
However, if a person unknowingly deposits a check that has been faked or forged, their lack of knowledge might serve as a defense. This all depends on the circumstances and state criminal defense laws.
What are the Legal Defenses for Check Fraud?
As with any type of crime, various defenses may exist for check fraud. Some of them include:
- Lack of proof or evidence: If the prosecutor does not prove each element of the crime, or does not have enough evidence to support the charges, then lack of proof or evidence may be asserted as a defense
- Consent: If the victim provided valid and voluntary consent to the behavior that is being charged as check fraud, the defendant could raise consent as a complete defense against the charges
- Duress or coercion: A defendant may assert that they were under duress or were coerced to commit the act. While the defendant will admit that the assault did happen, the defendant has a strong defense if the defendant can prove that someone else forced them to choose between committing the check fraud or suffering serious harm.
What Should I Do If I Have Been Accused of Check Fraud?
Check fraud is a serious crime. If you have been accused of check fraud, you should do your best to collect various items that may help to support a defense. These include:
- Records that prove you have access to or are authorized to use company checks (such as an employee ID or other similar document)
- Statements from witnesses or other people who can verify your actions, and particularly those witnesses who can testify to your intentions when you wrote or cashed the check(s)
- Receipts and other proof of valid transactions.
The Importance of Hiring an Attorney: You want to talk to a criminal defense attorney as soon as possible if you have been charged with check fraud. If you think that you cannot afford to pay an attorney, the state is obligated to provide you with an attorney at its expense. When you are arraigned, you may tell the judge that you want an attorney to represent you, but cannot afford one. The judge should then appoint an attorney to represent you.
You may think you can handle the situation on your own, but you should note that even a misdemeanor conviction can lead to jail time and other negative consequences, such as a criminal record. You need the best possible representation to protect your interests.
It is best to consult with a criminal defense attorney if you have been accused. Your attorney can instruct you on how to prepare a defense and what you can do to make your case as strong as it can be.
What Can I Do if I Think I Have Been the Victim of Check Fraud?
If you believe you have been a victim of check fraud, then you should alert local police authorities. Try to explain what happened, how much was lost, and the possible manner in which the check fraud occurred. If you believe you know who committed check fraud on you, tell the police that.
Costs/Fees: If you are going to miss payments to creditors because you lost money due to check fraud, contact the creditors and explain what happened. Most companies may be willing to do what they can to work with you to solve the problem.
You should also alert your bank or financial institution. They will want to investigate the matter. They will also be able to close off your accounts, so that no further damage to or theft of your financial assets is possible. You may also consider consulting a lawyer for assistance with any legal questions or concerns you may have.
However, it is the case that you may have sustained a significant financial loss. You may have some kind of insurance that would cover the loss, e.g. identity theft insurance. Also, the law in your state may require the defendant who committed the check fraud to pay restitution to you. It is in your best interest to talk to an attorney to get advice about what remedies you might pursue to recover what you lost.
Timelines: There is no deadline for reporting a crime to law enforcement, but it is best to report the crime as soon as you know it has happened and are able to contact them. You might even call 911. In addition, you want to report the crime to your bank or financial institution as soon as you can, so it can take whatever steps are available to minimize harm to you.
Finally, you want to talk to a lawyer promptly also to find out what you can do to recover your loss. In addition, you do not want to miss any deadlines.
Do I Need a Lawyer for an Issue Involving Check Fraud?
For victims, check fraud can cause major financial losses, leading to larger issues like identity theft. You may need to hire a financial lawyer near you if you are involved in a check fraud crime.
Those accused of committing check fraud know that check fraud is a serious offense that can lead to severe penalties for people who commit such crimes. Your attorney can provide advice and represent you in court if you need legal assistance. Also, if you have any specific questions about the laws in your state, your attorney can assist with those as well.
