Check kiting - sustany/dvg GitHub Wiki

Kiting or check-kiting is defined as the practice of covering a bad�check�from one bank account to another. Persons with multiple bank accounts use this advantage because it takes multiple days to process checks. The check that has been deposited increases the fund available. The act of kiting is�illegal. To counter kiting activities, many�financial institutions�have a waiting period before checks are deposited.�In the�Sixth Circuit, the Court defined check-kiting as drawing checks on an account from one bank and depositing them in an account in the other bank when both bank accounts have insufficient money to cover the amounts drawn; see��U.S. v. Stone. The Court in�United States v. Flowers�decreed that kiting is an�offense�where the offender tricks two or more banks into inflating account balances by drawing money from insufficiently funded bank accounts. The Court stated that the�offender�in essence will be giving themselves their own unauthorized, unsecured, and interest-free�loans, put banks at risk for funds, and short the banks� assets. In�United States v. Norton, the Court stated that check kiting could violate the federal bank fraud statute,�18 U.S.C. �1344�if the victim is a federally insured financial institution.