Former Dart Executives Guilty Of Check Writing Scheme

Missouri-Trucking-Company-Convicted-of-900K-Fraud-Scheme-Three former Dart employees have been found guilty of participating in a checking scheme to defraud a bank of $3.6 million.

According to WFMJ, Dart’s former Chief Financial Officer Mark Michael was sentenced to 30 months in prison for his part in the scheme.

In June, Michael was found guilty of conspiracy to commit bank fraud.

In addition, two other executives, former CEO Timothy Kephart and President Lee Stoneburner, have also been accused of taking part in the scheme.

The three allegedly cheated Huntington Bank out of more than $3.6 million.

Kephart was found guilty for his role in the scheme and is currently awaiting sentencing.

Stoneburner pleaded guilty to conspiring to commit bank from for his role in the scheme and also awaiting sentencing.

According to the FBI, from October 2007, through February 2010, Kephart, Stoneburner and Michael conspired to kite checks through five different Dart Trucking company accounts at the Huntington Bank in Columbiana, Ohio.

“All of these accounts were set up as Controlled Disbursement Accounts (CDA’s). These CDA’s were supposed to be a means of organizing and controlling the payment of expenses related to operation of the business. CDA’s have a separate routing number for checks that are to clear the account. Due to the checks bearing a separate routing number, it automatically created another day of “float” time for a check item to clear an account because of the bank’s internal processing procedures,” the FBI stated.

The three were accused of depositing money into one of the five accounts, with checks from another account which did not have sufficient funds to cover the check.  The deposited check would then inflate the account for one day to float that account.  The cycle was repeated nearly every day between the five bank accounts.

The practice of writing checks from insufficient accounts to temporarily inflate another account is what is known as check kiting.  In the end, the three former Dart employees kited $3.6 million in NSF checks.