Check Frauds: Defenses, Penalties and Punishments

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 What Is Check Fraud?

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.

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.

In both cases, the defendant may need to pay restitution to the victim (i.e., pay them back for the losses caused by the fraud).

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 persons 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

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.

If you are going to miss payments to creditors because of your loss of money due to check fraud, contact the creditors and explain what happened. Most companies will do what they can to accommodate 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 or theft can be done with your financial assets. You may also consider consulting a lawyer for assistance with any legal questions or concerns you may have.

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.

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