Prominent Roseburg Businessman Sentenced to 37 Months in Prison for $19 Million Check-Kiting Scheme
Eugene, Ore. - U.S. District Judge Ann Aiken sentenced David Gilbert, 65, of Roseburg, to 37 months in prison for conspiring to commit bank fraud. Court documents from the sentencing hearing on February 15, 2012, show that Gilbert admitted to kiting more than 500 checks, totaling more than $19 million, between his business bank accounts at PremierWest Bank and Northwest Community Credit.
Gilbert's scheme involved an elaborate plan. He met each workday morning with an employee to discuss the shortages in his bank accounts and to determine the amount by which to artificially inflate his bank accounts. After the meetings, checks were written for amounts consistent with prior legitimate deposits and were then deposited at specific times. These calculated steps were taken to keep the kited checks from being returned for insufficient funds and to keep the check-kiting scheme from being discovered. Gilbert took these actions on a daily basis for several months and, in doing so, created the facade of positive account balances, giving him access to millions in bank funds that did not exist.
In court documents, Gilbert admitted that he falsely but successfully inflated his business account balances, and, in effect, obtained a series of unauthorized, unsecured, and interest-free loans from PremierWest Bank and Northwest Community Credit Union. These actions put both banks at risk for the insufficient funds and deprived them of their assets. Through his scheme, defendant caused PremierWest Bank and Northwest Community Credit Union to lose approximately $3 million.
"By kiting checks, Gilbert stole almost $3 million to save his struggling businesses. Business owners need to understand that such conduct is a crime and will not be tolerated," said U.S. Attorney Amanda Marshall. "There are legitimate ways, like bankruptcy, to work through difficult financial times. Taking shortcuts such as check kiting puts individuals and communities at risk, is illegal, and will land you in jail."
This case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Scott E. Bradford.