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.
References in periodicals archive ?
This article defines check kiting, describes detection methods, and explains how the FBI uses the CKAS to prosecute kiters successfully.
Carruth maintained that all of Butler's allegations stating that Alabama One employees were aware of, and even assisted with, his check kiting activities were fabricated.
They knew what I was doing, that I was trying to keep these loans going and that I needed some help," Butler said, maintaining he really didn't understand what check kiting was until someone explained it to him later.
District Court for being involved in a check kiting scheme, according to information sheet filed by the U.
2 million after tax) representing the loss from a check kiting scheme by one of the Bank's commercial customers and a charge of approximately $2.
has asked the Alabama Credit Union Administration and the NCUA to approve another loan for Danny Butler, despite the fact he is serving a sentence for fraud and check kiting at the federal correctional facility in Talladega, Ala.
Madison also filed a counterclaim against Union Planters claiming the Tennessee bank knew about a check kiting scheme involving VSM Delivery and Freight Payment.
8 million charge from the check kiting scheme and was partially offset by the $428,000 increase in other operating expenses, $182,000 increase in salaries and employee benefits and the $60,000 increase in occupancy expenses.
Butler, who pleaded guilty to fraud and check kiting at the credit union in February 2014, is serving a 36-month sentence at the institution, although his fiancee, Paige Howard, has reported to the court that Butler has been told he will be released in December of this year.
The majority of this decrease can be attributed to a one time loss expense that was recorded in 2005 as a result of a check kiting matter.
Butler pleaded guilty in federal court to six counts of a 51-count indictment for check kiting between Alabama One and the West Alabama Bank and Trust in February 2014, and has been in the federal prison system since September 2014.
Excluding the check kiting charge, the prepayment penalty and the gain in the sale of equity securities, net income, (using a non-GAAP financial measure), for the first nine months of 2006 would have been $2.