![]() John then deposits that check into a different account he maintains at State Bank.He writes himself a check against that account for $100.John has $50 in his account at First National."Kiting," or "Flashing," is more sophisticated and involves the circular transfer of funds among multiple accounts. People get away with this on occasion, but most verification methods today can at least confirm the existence of an account, if not its balance. "Paperhanging" simply refers to issuing checks on a closed or non-existent account. While check alteration is very common, other forms include: Convictions for higher amounts result in harsher penalties in addition to restitution.Ĭheck alteration is one of several related financial crimes under the broader category of check fraud. Penalties will vary from one jurisdiction to another, and depend on factors such as recidivism and the exact amount involved. Otherwise, it is prosecuted as a misdemeanor. ![]() The answer is yes if the amount involved is $1,000 or more. In this case, the remitter would need to demonstrate to the court that the check had been altered in a way that any competent bank teller or another financial professional should have detected. However, the remitter could be held liable and forced to write a new check to the payee along with any penalties and fees. ![]() The thief ultimately faces criminal charges, when and if caught. Somehow, the check had been stolen and the name of the payee cleverly replaced with that of the thief. This did not come to the remitter's attention until he saw his monthly statement. There was a recent situation in which a remitter (the person writing the check) was held liable by the payee when they failed to receive payment. The real problem here is that, as discussed earlier, liability may rest with anyone along the chain of endorsements from drawee (the institution funding the check) to the payor (the institution who pays the bearer). However, with today's high-tech watermarks and other ways of authentication and fraud detection, it would be very difficult for a potential fraudster to cash an altered check. This does happen on rare occasions, most often with personal checks. Cashier's and teller checks and money orders are categorized as "drafts," or orders the person or institution that is authorized to pay is under an order (in this case, the person who originally purchased the check) to do so.
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