Topeka Business Owner Sentenced in Check Kiting Scheme
TOPEKA, KAN. - A Topeka business owner who pleaded guilty to writing more than 5,000 insufficient fund checks in a check kiting scheme was sentenced Monday to 37 months in federal prison, U.S. Attorney Barry Grissom said. The defendant was ordered to pay more than $538,000 in restitution.
John Charles Humpage, III, 49, Topeka, Kan., pleaded guilty to one count of bank fraud. In his plea, he admitted that in 2008 he defrauded the Educational Credit Union, Kaw Valley State Bank and Alliance Bank. Humpage did business under various names including Humpco, Inc., Crescent Limousine, Yellow Cab of Topeka and Wire and Glass Lease, LLC. He carried out a scheme to defraud the banks by exchanging and cross-depositing insufficiently funded checks between two or more of his bank accounts. In that manner, he generated artificially inflated account balances. The check kiting scheme utilized bank system Afloat@ periods for purposes of creating artificially enhanced bank account balances.
From May through August 2008 he exchanged and cross deposited more than 5,000 insufficient checks and created in excess of $78 million in aggregate deposit amounts. Those deposits falsely inflated his bank account balances by more than $600,000.
Grissom commended the FBI and Assistant U.S. Attorney Richard Hathaway for his work on the case.