Check fraud is a type of financial crime that involves the illegal use of checks. Typically, check fraud occurs in situations when a person makes a purchase, opens a bank account or borrows money with a check that they know is fake, stolen or altered.

Depending on the details of the crime, the amount of money and victims involved, and the state where the fraud occurred, the check fraud may be punishable as a misdemeanor or a felony crime.

Are There Different Types of Check Fraud?

Yes, check fraud can be committed in a variety of different ways. The different types of check fraud are separated into multiple categories depending on the way that the check fraud was committed. In each scenario, the person who committed the check fraud must have done so intentionally to be convicted of the crime.

Here are some examples of the different types of check fraud:

  • Forgery: When a person steals another person’s valid checks, forges their signature on the checks, and then uses fake identification to cash the forged checks;
  • Payroll Fraud: When an employee takes another employee’s paycheck, or when an employee issues an unearned paycheck to themselves without authorization from their employer;
  • Paperhanging: When a person uses a closed bank account to write a check when making a purchase;
  • Check Kiting: When a person defrauds a bank by using several checking accounts to write checks for an amount greater than the balance in the checking account, and then transfers money between the checking accounts;
  • Check Counterfeiting: When a person illegally prints fake checks that have stolen names and bank account numbers; and
  • Check Alteration: When a person changes the account information on a check or modifies a signature by using chemicals or ink.

Some of these different types of check fraud are considered to be severe federal crimes. Federal check fraud crimes typically involve multiple victims, multiple bank accounts, and elaborate plans to steal the identities of victims. Federal check fraud schemes are often carried out over a period of years.     

What Can I Do if I Think that I Have Been the Victim of Check Fraud?

The victims of check fraud often suffer severe financial and emotional damages. If you think that you’ve been the victim of check fraud, you should contact your bank immediately. You should contact your local police department as well so that they can begin a fraud investigation.  

You may have the ability to sue the person who committed check fraud. Even though the convictions and punishments for check fraud are handled by a criminal court, you may be able to file a claim for your financial damages in civil court.

What are the Penalties for Committing Check Fraud?

The penalties for committing check fraud vary widely by state. The penalties also vary depending on the type of check fraud that was committed. A felony check fraud conviction is typically associated with a more severe punishment than a misdemeanor check fraud conviction.

The common penalties for a misdemeanor check fraud conviction include paying a fine. A short amount of jail time may also be required, along with community service or probation.

The penalties for a felony check fraud conviction are often more severe. Expensive fines, lengthy prison sentences, and suspension of professional licenses are common penalties. In addition to these penalties, a felony check fraud conviction will have a lasting impact on a person’s criminal record. Having a criminal record can make getting a job and finding housing difficult.

For both felony and misdemeanor check fraud convictions, restitution payments may be ordered by the court. These payments are made to compensate the victims of the check fraud for their financial losses. The amount of restitution ordered will vary depending on the amount of money that was stolen from the victims.

Federal check fraud crimes are punished by up to thirty years on a federal prison and by fines of no more than one million dollars.

What are the Legal Defenses for Check Fraud Charges?

There a number of different legal criminal defenses that may be used as a defense to check fraud. Common defenses often include an argument that the defendant lacked the knowledge that the check was fake or altered.

Lack of the intent to commit fraud is also a common defense. Lack of intent means that the defendant did not act on purpose to commit check fraud and that they were under the impression that they had the authority to make alterations to the checks or forge signatures.

What Should I Do If I Have Been Accused of Check Fraud?

You may be successful at defending yourself against check fraud charges. The criminal court system is complicated and requires a deep knowledge of the law. It’s best to contact a criminal lawyer if you have been charged with a check fraud crime. For the best outcome in your case, a lawyer will help you to better understand your rights and possible defenses.