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Check Fraud

Check fraud is the unauthorized use or alteration of checks to illegally withdraw or acquire money. In New Jersey, check fraud can be prosecuted from a disorderly persons charge, up to a crime of the second degree, generally depending upon the dollar amount at issue.

Check fraud includes such offenses as passing a bad check, forging a check, check kiting or embezzlement. The following lists the elements involved in these particular offenses.

Bad Checks

Anyone who attempts to pass a check while knowing that there are insufficient or no funds to back it has committed a bad check offense.

The specific elements that constitute a bad check offense in New Jersey include:

The issuer had no account with the drawee (bank or other institution who pays the check when cashed) at the time the check was issued, or;

Payment was refused by the drawee for lack of funds, or due to a closed account, after a deposit by the payee into a bank for collection or after presentation to the drawee within 46 days after issue, and the issuer failed to make good on the check within 10 days afternotice of that refusal or after notice has been sent to the issuer’s last known address.

The penalties are the same as for theft:

If the check was under $200, it is considered a disorderly persons offense which carries a possible jail term of up to six months and a $1,000 fine.

If the check amount was over $200 and under $1,000 it constitutes a crime of the fourth degree and the jail term can be up to 18 months and a fine up to $10,000.

If the check amount is over $1,000 and less than $75,000, it is considered a crime of the third degree and carries a sentence of up to 5 years and a fine up to $15,000.

If the amount is over $75,000, then it is considered a crime of the second degree with a maximum jail term of 10 years and a fine up to $150,000.

Forged Checks

Forging a check can be a federal offense, as it is a form of counterfeiting. In New Jersey, for an offense to constitute forgery the following must have been part of the act:

  • Possessing the intent to defraud; and,
  • Without authorization, altering, changing, or forging a document in someone else’s name or a false name; or,

  • “Utters” such a document/check he or she knows to be forged. Uttering is the unlawful use of a check (or one that is forged) that is passed to a bank clerk or other persons for payment or deposit.

Forging a check is considered a third degree crime with a penalty of 5 years in prison and a fine of up to $15,000.

Check Kiting

This is a type of fraud that involves opening accounts at two separate banks. The offender writes a check from the first account, for a greater amount than the account balance with the intention of cashing this check. The offender will then write another bad check from the second account, also with insufficient funds, and deposit it into the first account. There is a lag time, called ‘float time,” between the check being deposited into the first account and the money being deducted from the second account. The float time allows the initial check from the first account to clear, against the amount “deposited” from the second account, before the bank realizes the second check will actually bounce.

Check kiting charges often include bank fraud, wire fraud, and money laundering.

In New Jersey, if the amount is over $500,000, money laundering can be charged as a crime of the first degree with a maximum of 20 years in prison and a fine up to $500,000.

Embezzlement

Writing yourself an unauthorized check from a valid account, (often an employer or company account) is better known as embezzling. This often includes the following:

  • A financial relationship existed between defendant and the victim.
  • As a result of the relationship, the defendant took possession of he victim's funds that were entrusted to him or her.
  • The taking was done illegally.
  • The taking of the assets or funds was done intentionally.

The penalties for embezzlement are as follows: (1) if the amount is over $75,000, it is a second degree crime with 5 to 10 years in jail; (2) if the amount is over $1,000 and under $75,000, it is a third degree crime and you can be sentenced to 5 years in jail; (3) if the amount is under $1,000, it is a fourth degree crime and you can be sentenced to 18 months in jail.

If Arrested

Check fraud or any of its companion offenses are serious charges and can be crimes of the second, third or fourth degree of a disorderly persons offense. If you are arrested, do not give any statements. Advise the law enforcement officer or investigator that you will not answer any questions and will only speak to your attorney.

Law enforcement officials must read you your “Miranda rights” and they may try to convince you to make a statement or to volunteer information. However, after you have requested legal counsel the law dictates that they must cease all questioning.

Defenses for Check Fraud

A good criminal defense lawyer can be invaluable for your case against unwarranted check fraud charges, and may be able to reduce the charges to a disorderly persons offense or another alternative resolution. Some defenses used in such cases argue there was no intent to commit fraud and may include:

  • A check was not properly filled out or was incomplete.
  • The check was not properly deposited within a certain time.
  • The check had been postdated.
  • The check’s recipient had agreed to hold the check for a time before depositing it.

Many other defenses exist that a criminal defense lawyer can discuss with you once he or she has investigated your case.

If you have been arrested for check fraud, we want to hear your story.

Contact the Law Offices of Stephen S. Weinstein, P.C.
for your free personal consultation today.

 
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