NCJ Number
66688
Journal
Law Enforcement Quarterly Volume: 8 Issue: 2-4 Dated: (1979) Pages: 8-12
Date Published
1979
Length
5 pages
Annotation
THE PRECONDITIONS AND TECHNIQUES OF CHECK KITING ARE DISCUSSED, AND SUGGESTIONS FOR PREVENTION ARE MADE.
Abstract
THE CHECK KITER DEPOSITS A SERIES OF WORTHLESS CHECKS IN THE BANK, ALL OF WHICH ACT TO SUPPORT WORTHLESS PAPER DEPOSITS MADE EARLIER. THE AIM IS TO AMASS A CONTINUALLY GROWING RESERVE OF CREDITS FROM CHECK DEPOSITS WHICH HAVE A POTENTIAL OF 10 DAYS BEFORE BOUNCING; THE 'CREDIT' IS EVENTUALLY CONVERTED INTO CASH. THE METHOD IS BASED ON THE STANDARD BANK PRACTICE OF CONVERTING A CUSTOMER'S DEPOSITED CHECK INTO MONEY WITHOUT HAVING RECEIVED CREDIT FROM THE ISSUING BANK. THE DISTANCE BETWEEN DEPOSITING AND ISSUING BANK IS AN IMPORTANT FACTOR IN DETERMINING THE TIME AVAILABLE BEFORE THE CHECK BOUNCES. ADDED VARIABLES FACILITATING KITING ARE (1) THE SHORT WAITING PERIODS BEFORE BANKS PERMIT NEW CUSTOMERS TO RECEIVE CREDITS ON UNCOLLECTED FUNDS, (2) THE OVERRELIANCE OF BANKS ON CUSTOMER IDENTIFICATION CARDS (E.G., DRIVERS' LICENSES) WHICH CAN EASILY BE FORGED, AND (3) THE AVAILABILITY OF TELEPHONE ANSWERING AND MAILDROP SERVICES WHICH THE KITER CAN USE AS PHONY ADDRESSES FOR EMPLOYMENT AND BANK REFERENCES. A DETAILED CHRONOLOGY OUTLINES A CHECK KITING SCHEME INVOLVING BANKS IN NEW YORK AND SAN DIEGO AND EARNING MORE THAN $35,000. SINCE CHECK KITING AS A WHITE-COLLAR CRIME WORKS WITHIN THE FRAMEWORK OF THE ECONOMIC SYSTEM, PREVENTION IS DIFFICULT. IMMEDIATE PREVENTIVE STEPS CALL FOR BANKS TO KEEP A RECORD OF EVERY TELEPHONE AND MAIL SERVICE IN THE AREA (FOR EASIER DETECTION OF THE USE OF FALSE ADDRESSES), TO RELY ON VERIFICATION TECHNIQUES WHICH CAN LESS EASILY BE FORGED, (E.G., FINGERPRINTS), TO VERIFY CUSTOMERS' CREDIT WITH THE BANK ISSUING THE CHECK, AND TO PROMOTE STRICTER PENALTIES FOR CHECK KITERS. (SAJ)