Marquette Woman Nets Prison Time For Check-Kiting Scheme
MARQUETTE, MICHIGAN —Acting U.S. Attorney Andrew Birge announced today that Brooke Ferns (formerly Brooke Vernier), age 30, of Marquette, was sentenced to 18 months in prison followed by two years of supervised for conspiring to commit bank fraud. Chief U.S. District Judge Robert Jonker also ordered Vernier to pay $1,780,232.10 in restitution.
The conviction and sentence stemmed from an investigation by the FBI that revealed Vernier had engaged in an extensive check-kiting scheme targeting three Upper Peninsula financial institutions: the Ishpeming Community Federal Credit Union (now known as the TruNorth Federal Credit Union), the Peninsula Bank and the River Valley Bank. Check-kiting is a form of bank fraud in which a person writes a series of checks transferring funds among several bank accounts in order to create artificially inflated balances in one or more bank accounts.
The investigation revealed that Vernier became the president and sole owner of Oasis Operating, Inc., Oasis Fuels, Inc. and Refresh and Refuel, Inc. in 2010. These corporations supplied gasoline to gas stations in the Upper Peninsula and also owned several gas stations. Vernier also opened seven corporate bank accounts for these businesses at the Ishpeming Community Federal Credit Union, the Peninsula Bank and the River Valley Bank. When her businesses encountered financial difficulty, Vernier began what the FBI refers to as a "circular check-kiting" scheme. From January 2012 through September 2012, Vernier wrote thousands of checks transferring and attempting to transfer a total of approximately $145,000,000 amongst the seven corporate bank accounts. The vast majority of these inter-account transfers were executed in order to further the circular kiting scheme. During this same time period, the total business activity of Oasis Fuels, Inc., Oasis Operating, Inc., and Refresh & Refuel, Inc. was approximately $15,000,000.
In September 2012, the three financial institution discovered the circular check-kiting scheme. At that time, Vernier had 124 bad checks totaling approximately $5,200,000 in circulation. When the three financial institutions finally settled and closed all of Vernier’s corporate bank accounts, they discovered that they had suffered a loss of about $1,800,000. During the sentencing hearing, the government noted that the checks written by Vernier in furtherance of this scheme were typically for about $40,000. To keep the scheme running, Vernier had to write about 15 checks per day, every single day, for a total of more than 3,000 checks.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Maarten Vermaat.