Iowa man sentenced to federal prison for $247K ‘check-kiting’ scheme that put a trucking company out of business

This week, a Cedar Falls man was sentenced to prison for a bank fraud scheme that caused a trucking company to go bankrupt and close shop.

On January 24, Nolan Otto DeWall, 39, was sentenced to a year and a day in federal prison after he pleaded guilty to one count of bank fraud, according to the U.S. Attorney’s Office for the Northern District of Iowa.

The prison term is to be followed by two years of supervised release.

Authorities say that DeWall was a manager and shareholder at a Black Hawk County grain cooperative as well as a part owner of a trucking company based in Dike, Iowa.

The U.S. Attorney’s Office describes the scheme:

In May 2018, DeWall devised a so-called “check-kiting” scheme in which he transferred large amounts of funds by check during a short period of time between accounts of the grain cooperative and the trucking company, as well as other accounts.  The checks had no legitimate business purpose but were instead designed to falsely and temporarily inflate the balances of the accounts to benefit the grain cooperative, which was in financial distress.  DeWall also forged the signature of one of the partners in the trucking company on a check.  When the check-kiting scheme collapsed, the trucking company’s account was left with a negative $247,000 balance.

Due to the negative account balance, one of DeWall’s partners in the trucking business was forced to file for personal bankruptcy. Another partner had to use personal funds and a loan to pay the negative bank balance.

Ultimately, the trucking company was forced to sell off its assets and became defunct, authorities say.

DeWall has also been ordered to pay $217,441.96 in restitution to his partners in the trucking business.