Check kiting is a common form of white collar crime and check fraud. It involves drawing a check for a greater amount than is contained in the account. The check is then deposited into a different account. Before the check clears with the first account, the funds are immediately withdrawn from the second account. The money is typically deposited back into the first account to conceal the transfer.
In this way, the first bank may not have time to trace the fraudulent transfer, since checks may take a few days to clear. Check kiting is based on the idea that a check that would otherwise have bounced is forced to clear through fraudulent means. The crime is also referred to as "check flashing."
Check kiting is a serious crime, and is one of the most strictly enforced types of white collar crimes. Even first time offenders can face stiff penalties, sometimes resulting in fines of greater than $500,000, and jail time of more than 20 years. In addition to criminal charges, the offender may also face civil charges if the bank or banks decide to sue for their losses.
Check kiting is usually thought of as a crime committed by individuals. However, large businesses and corporations can also be found guilty of check kiting on a larger scale, for example floating several different checks through many different bank accounts. In such cases, the legal penalties will be even greater.
Minor instances of check kiting may result in misdemeanor charges, depending on state laws. However, check kiting that involves large checks or multiple checks will usually result in felony criminal charges. Since check kiting is also regulated by the federal government, an offender can face both state and federal charges for check kiting.
Many instances of check kiting also involve other types of criminal activity, such as illegal overdraft or issuing bad checks.
Check kiting charges are somewhat difficult to defend against, as it’s usually difficult to “accidentally” engage in check kiting or similar conduct. In order for check kiting to occur, the person usually needs to be acting with some sort of intent to deceive the bank(s).
However, they may be some defenses to check kiting, such as coercion (someone forced you to do it under threat of harm). Another common defense is if the suspect was subject to fraud– for example, if someone forged your signature in order to gain access to your checking account.
As mentioned, check kiting charges are among the most serious types of criminal charges. If you need assistance with check kiting issues, you should contact a criminal defense lawyer immediately. An attorney will be able to provide you with legal advice and can assist you during court proceedings.