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CHECK KITING: DETECTION, PROSECUTION, AND PREVENTION

NCJ Number
145802
Journal
FBI Law Enforcement Bulletin Volume: 62 Issue: 11 Dated: (November 1993) Pages: 12-16
Author(s)
J S Turner Jr; W S Albrecht
Date Published
1993
Length
5 pages
Annotation
The authors discuss what can be done about check kiting--the fraudulent use of checks between two or more bank accounts to cover the fact of insufficient funds.
Abstract
Check kiting and the monetary damaged caused by them are on the rise. Banks will usually resolve issues of check swapping, or the exchange of checks between two bank accounts, without prosecuting the kiters. When the scheme involves payment to a third party, however, banks must prosecute. Signals that may indicate check kiting comprise the acronym SAFE BANK: Signature and payee on check are the same; Area abnormalities (many out-of-area checks); Frequent deposits, check writing, and balance inquiries; Escalating balances; Bank abnormalities (many deposited checks drawn on the same banks); Average time money remains in account is short; Nonsufficient funds (frequently); and Keep banks from recognizing frequency of transactions by using ATM, night drop, drive-up, and other branches for deposits and withdrawals. Ultimately, only banks themselves can prevent check kiting, but law enforcement officers can help by encouraging banks to place restrictions on deposits. 1 endnote