Dart Trucking Officials Guilty In $3.6 Million Check-Kiting Bank Fraud
Two officials with Dart Trucking were found guilty of bank fraud charges related to a $3.6 million check-kiting scheme against Huntington Bank, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Timothy Kephart, 54, of Morrisdale, Penn, the chief executive officer of Dart Trucking, and Mark Michael, age 55, of Clearfield, Penn., the chief financial officer of Dart Trucking, were both found guilty of one count of conspiracy to commit bank fraud and one count of bank fraud.
The men are scheduled to be sentenced by U.S. District Judge Dan Aaron Polster on September 4, 2013.
Kephart and Michael were charged with kiting checks, in conspiracy with Lee Stoneburner, the president of Dart Trucking, from October 2007 until February 2010, from various accounts of Dart Trucking at Huntington Bank, in Columbiana, Ohio.
Stoneburner, 44, from the Columbiana, Ohio area, previously pleaded guilty to conspiring to commit bank fraud and is awaiting sentencing.
A check kiting scheme involves writing a series of worthless, non-sufficient funds (NSF) checks where a NSF check from one bank account was deposited into another account; another NSF check would then be written to cover the previous NSF check, concealing the overdraft from the bank, such that a false balance, or “float,” was created in the accounts. The defendants would then use that falsely created “float” to pay their bills, expenses, and to pay their salaries.
The evidence at trial established that it was a complicated, daily task to compute the amount of NSF checks which had to be written and to track what accounts had to be “covered” and from which accounts a NSF check could be written to cover a particular account. These officers involved their clerical staff in tracking and covering these checks. The use of “controlled disbursement accounts” or “CDA’s,” which allowed the company an extra day to post its expenses before they paid them, gave the company a float it could draw upon over the course of this scheme.
This case was prosecuted by Assistant United States Attorney Christian H. Stickan and Assistant United States Attorney Perry D. Mastrocola, following an investigation by the Federal Bureau of Investigation, Youngstown, Ohio.