Kiting

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Kiting

Used in banking to refer to the practice of depositing and drawing checks at two or more banks and taking advantage of the time it takes for the second bank to collect funds from the first bank.
Also refers to illegally increasing the face value of a check by changing the numbers on the check.
In the context of securities, refers to the manipulation and inflation of stock prices.

Kiting

1. The illegal practice of deliberately misrepresenting the value of a security or transaction in order to extract more funds from a counterparty.

2. The illegal practice of writing a bad check on an account at one bank, depositing it at a second bank, and withdrawing cash. Check holds have made kiting more difficult than it once was.

3. The illegal practice of defacing a check by increasing the amount of money written on it. One may take advantage of bad handwriting, for example, by changing "ten" to "twenty" on the check.

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References in periodicals archive ?

The insurer maintained that the check kiting losses were in the nature of an extension of credit by the bank to which the exclusion should apply.

Annual survey of fidelity and surety law, 1998 -- part II

The board should have known that the subsidiaries didn't have the money in their bank accounts to cover the checks to Affiliated, "but nevertheless close to half a billion dollars in insufficient checks were being written on these accounts to perpetrate this massive check kiting scheme," Cox said.

Trustees: leaders of affiliated kited $475m in checks

If the auditors had inquired, they would have learned that Minkow submitted phony tax returns and that banks closed his accounts for check kiting, writing excessive non-sufficient-fund checks, using fictitious checks, and conducting loan fraud.

Investigating assets: The CPA's role in detecting and preventing fraud

Difficult to detect and prosecute, check kiting schemes have gained popularity in recent years.

Check kiting: detection, prosecution and prevention

The Department of Justice will aggressively investigate and prosecute Ponzi schemes, bank fraud, check kiting, and other similar types of financial 'shell games' specifically designed to lull banks, investors, and employees into having a false sense of security."

Affiliated's Mills admits $11.5 million check kiting

Schick was sentenced in August 2004 to 97 months in federal prison for an unrelated scheme to defraud several banks through check kiting.

Beverly suitor faces lawsuit: nursing home company remains mum about bidders

District Court for being involved in a check kiting scheme, according to information sheet filed by the U.S.