Check Fraud Jail Time

In 2021, financial institutions in the United States filed more than 350,000 suspicious activity reports (SARs) to the Financial Crimes Enforcement Network (FinCEN) regarding potential check fraud. This figure represents a 23% increase in SARs filed in 2020.

Such numbers show that check fraud is still a widespread crime. It is among the largest sources of illicit proceeds in the U.S. and one of the country’s most significant money laundering threats.

What is check fraud, and what are its laws and penalties? What are the different types of check fraud? Can you defend yourself against this crime?

This article explains check fraud and the various criminal charges that could be filed against you when you commit this crime in the United States. This article also discusses what you can do if someone accuses you of check fraud or if you’re a victim of this crime.

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Check Fraud Criminal Charges, Laws, Defenses, and Penalties in the U.S.

Check fraud is a crime involving deceptive or illegal use of checks. In many situations, check fraud happens when you attempt to buy or make a transaction using a stolen, falsified, altered, or invalid check.

As newer banking methods and technologies arise, check fraud can evolve, and laws defining and penalizing check fraud can also change.

Depending on state law and the exact circumstances surrounding the crime, check fraud can be a misdemeanor or a felony crime.

Misdemeanors are usually punishable by fines or short-term imprisonment. On the other hand, felonies are punishable by long-term imprisonment of one or more years.

The following sections further discuss the various laws, charges, penalties, and defenses regarding check fraud in the United States.

Fraudulent Checks

Written checks are a form of payment that you and some establishments can readily accept. However, getting checks as payment can sometimes be risky because you won’t know whether or not the funds promised on the check are available until the check has cleared.

When a check bounces (has not enough funds to cover the payment), it’s possible that the check issuer made an honest mistake. But there are times when the person writing the check knows the check is bad. In this case, there’s a possibility that it is fraudulent.

What Is Check Fraud and Check Kiting?

Check fraud is the unlawful use of checks to obtain or borrow funds illegally. Meanwhile, check kiting is a fraud that a criminal commits against a bank to access funds deposited in one account before being transferred to another account where those funds are drawn.

Defining Check Fraud Charges

Suppose you write multiple bad checks or intentionally write such checks knowing your account has insufficient funds. In that case, you may be found guilty of check fraud and face criminal charges.

Depending on state law, penalties for check fraud convictions can include restitution, jail time, or both.

For example, criminal penalties in Alabama for bad checks of $500 or more include fines of not less than $500 and not more than $5,000 or imprisonment of up to three years, or both. In Arizona, bad checks over $100 are punishable by up to five years in prison.

Examples of Check Fraud in the U.S.

Examples of check fraud include the following circumstances:

• Bank check fraud: Ordering or writing checks from a closed account.
• Cashier’s check fraud: Using a bad cashier’s check to purchase a product, then returning the item for cash.
• Check cashing fraud: Cashing checks you know are fraudulent due to identity theft or other criminal activity.
• Check deposit scheme: Depositing a check for someone else and then giving that person cash and taking a commission.
• Electronic check fraud: Creating fraudulent checks from electronically stolen account information.
• Fake check fraud: Involving the illegal manufacturing of checks.
• Forging checks: Signing or endorsing someone else’s name on a check.
• Payroll check fraud: Creating or cashing fake payroll checks that may result in embezzlement (misappropriation or theft of funds).

Where the Problem Starts

The lag between when a check gets deposited and when the funds get paid often creates an opportunity for check fraud. This time lag is called the float, which some individuals exploit to commit crimes.

Fraudulent checks can have a significant effect on victims. Depending on the defrauded amount, such checks can halt business operations or leave an individual’s family in a financial crisis.

Are There Different Types of Check Fraud?

You can falsify checks in various ways, like counterfeiting, forgery, and check alteration.

Check fraud also includes using checks illegally, such as check kiting, bank check fraud, payroll check fraud, and other fraud types discussed earlier in this article.

These types of fraud can lead to severe crimes often handled in federal court. These check fraud crimes can involve identity theft or systematic abuses of bank accounts and multiple victims.

Proving Intent in Check Fraud Cases

Prosecutors will often have direct evidence of the defendant’s intent to defraud. For example, the defendant may have told someone about planning to trick a victim. In this case, the person whom the defendant has spoken to can testify as a witness at trial.

If the prosecutor has no direct evidence, they can resort to circumstantial evidence.

In some cases, prosecutors can use the presumption of intent as evidence if they can meet certain conditions. For example, a defendant without an account with the bank in question when the check was written can be a potential presumption of intent.

Penalties for Check Fraud

Check fraud can have civil and criminal penalties, and a judge can require the defendant to pay restitution to the victim to compensate for the value of the services or goods bought with the bad check.

The defendant may also receive probation, meaning they may need to complete specific requirements the judge imposes while refraining from committing other crimes like writing more bad checks.

Penalties and Collateral Consequences

If you commit check fraud, the severity of charges against you usually depends on how much money the check falsely represents.

For example, Florida law classifies giving a worthless check as a first-degree misdemeanor unless the check’s value is $150 or more, making the crime a third-degree felony. Criminal sentences include the following:

• First-degree misdemeanor: This charge imposes a fine of $1,000 and imprisonment not exceeding one year.
• Third-degree felony: This charge imposes a fine of $5,000 and imprisonment of no more than five years.

You can also suffer collateral consequences from a check fraud conviction. For example, starting a career upon release can become challenging since only a few employers risk hiring someone with a criminal record.

Criminal Charges for Check Fraud

The criminal charges for writing fraudulent checks vary by state or jurisdiction. In Texas, check fraud is generally a misdemeanor with the following potential penalties:

• Value is less than $100: Class C misdemeanor punishable with fines up to $500.
• Value is between $100 and $750: Class B misdemeanor with prison time of up to 180 days and fines of up to $2,000.
• Value is between $750 and $2,500: Class A misdemeanor with up to one year in jail and up to $4,000 in fines.

If you have a loved one imprisoned for check fraud or other crimes, LookUpInmate.org’s user-friendly online search tool can help you find their location.

Defenses to Check Fraud

Not all cases of a bad check result from an intent to defraud others. The intent is a required element of the charge, and prosecutors must prove that intent exists at the time of the check’s issuance and when the check payment stops.

Thus, one potential defense against check fraud charges is the lack of intent to defraud. For example, you may have stopped payment on a check due to a dispute with a seller because you’re dissatisfied with the quality of their goods or services and not because you want to scam them.

U.S. Law Governing a Fraudulent Check Offense

Laws governing fraudulent check offenses vary by state. In Florida, rules on violations involving checks mention that you can be guilty of a third-degree felony if you make, draw, deliver, utter, or give a check worth $150 or more to pay for goods or services but with the intent to defraud by stopping payment on such a check.

Meanwhile, in Hawaii, bad checks of any amount can result in up to one year in jail, $1,000 in fines, or both.

Criminal Aspects of a Worthless Check

States have varying descriptions of what makes issuing worthless checks a criminal offense. Courts can assume you intend to defraud or have the requisite knowledge of insufficient funds unless you compensate the payee with the face amount of the check plus other fees.

Civil Aspects of a Worthless Check

In some states like Florida, a person receiving a bad check can sue for treble damages (compensation amounting to three times the check’s value). In this case, the payee or the check’s holder has to pay a service charge based on the amount on the check, court costs, and attorneys’ fees.

Restitution for Writing a Worthless Check

If you’re the defendant in a worthless check case, the prosecution’s concern is the restitution you must pay the victim.

Consider working with a well-versed criminal defense attorney, such as one specializing in check fraud, to help you avoid or minimize the consequences of a worthless check charge.

A check fraud attorney can help you work out a restitution plan that may help you avoid a criminal record and pay the fines, court costs, probation supervision fees, and other costs associated with the case.

Felony Check Fraud in the U.S.

One of the essential elements to convict you in a felony check fraud case in the U.S. is the intent. The prosecution must show that you had intended to deceive others by writing a bad check to convict you of fraud.

When Is Check Fraud a Felony?

The conditions for check fraud to become a felony varies by state. For example, Indiana categorizes check fraud as a felony based on the following conditions:

• Level six felony: The check’s amount is over $750 and below $50,000
• Level five felony: The check is over $50,000

The check’s value can determine the punishment severity and restitution requirements for felony check fraud. The following sections discuss these elements.

The Value of the Check Matters

A level six felony conviction for check fraud in Indiana is punishable by imprisonment of up to two and a half years, while a level five felony is punishable by up to six years. Both levels have fines amounting to $10,000.

Meanwhile, in Georgia, check fraud qualifies as a felony if the check’s value exceeds $500.

Restitution and Living With a Fraud Conviction

Depending on the amount you’re guilty of taking, restitution and other fees can add up quickly and take years to repay. But even after serving your sentence and paying any costs, living with a fraud conviction can make your life challenging.

For example, a criminal record can make it difficult to find a good job, especially if you’re looking for work involving handling money.

How to Defend Against Felony Check Fraud

Every check fraud case can be different. But some defenses can help prevent your conviction or lower your sentence. These successful defenses include:

• You lack intent: Prosecutors must prove your intent to commit fraud before a conviction occurs. For example, an accidental miscalculation shouldn’t count as intent to defraud the recipient.
• Someone else wrote the check: Some people use someone else’s checking account without the account owner’s permission.
• You are forced to write a bad check: When someone forces you to write checks, such a case doesn’t constitute intent. You can’t show intent when writing a check under force or threat of force.

What Constitutes Check Forgery?

You commit a check forgery when you falsely make, alter, counterfeit, or forge a document with legal standing. The following sections discuss what check forgery is in detail.

What Is Check Forgery?

A forged check is a check on which you place a forged or unauthorized signature. Check forgery has three categories:

• A forged signature on a real check: This act often occurs with stolen blank checks on which you forge the account holder’s name to acquire goods or cash the check.
• Check washing: This type of forgery involves stealing a check in transit from one party to another, such as through the mail. You erase the inked information except for the signature and change the payee’s name to your own.
• Fake checks: This check forgery is the least common but the most difficult to detect. You create a check with a fake account and routing numbers and pass off the check as legitimate in exchange for cash or goods.

With the Intent to Defraud

Check forgery is a crime of dishonesty since it involves presenting a forged check to defraud an individual, store, or bank. As discussed earlier, intent is a crucial element in proving your guilt.

Penalties for Check Forgery

The amount of money involved usually determines the offense level and penalties.

Felony penalties for forgery can include steep fines and imprisonment ranging from a few years to a few decades. Meanwhile, misdemeanors in most states carry fines and jail time of a year or less.

Stopping Payment on a Check in the U.S.

The crime of stopping a check payment happens when you intentionally cancel a check to defraud the payee. Check fraud offenses can carry misdemeanor or felony penalties depending on the value of the received services or goods.

Definition of Stopping Payment on a Check

Stopping payment on a check or other written payment orders can be a criminal offense if you intend to defraud the other party by issuing a check and stopping the payment.

Penalties for Stopping Payment

Penalties for stopping check payments can fall under a misdemeanor or felony depending on the goods’ or services’ value secured by such checks.

Worthless Check or Bad Check in the U.S.

When you issue a check knowing your account has insufficient funds to cover the transaction, you’re committing a crime involving worthless or bad checks. Such a crime can incur misdemeanor or felony penalties based on the value endorsed on the check.

Definition of Worthless Check

Writing a worthless check is a criminal offense involving obtaining goods or services using a check while knowing during the time of issuance that the check has insufficient funds to cover the transaction.

Required Proof

The proof required to prove the worthless check crime depends on the state. For example, Florida requires the prosecution to prove you committed the following elements beyond a reasonable doubt:

• You drew, uttered, issued, or delivered a check to obtain valuable goods, services, and wares.
• The goods, wares, and services had monetary value.
• When you issued the check, the bank deposit needed more funds to pay the amount on the check.
• You knew the bank account had insufficient funds when you wrote the check.
• You were aware there was no understanding or arrangement with the bank to pay for the check.

When Is Worthless Check a Crime?

Writing a check despite having inadequate funds in your bank account doesn’t immediately constitute a crime.

However, having the knowledge that you do not have sufficient funds is something the prosecution must prove to charge you with the crime.

However, in prosecutions for bounced or bad check violations, the making, uttering, drawing, or delivery of a check that the bank later refuses due to lack of funds in your account is prima facie (sufficient) evidence of knowledge of inadequate funds or intent to defraud.

Penalties for Worthless Checks

The penalties for a worthless or bad check case depend on the state and amount involved in the transaction.

In Ford County, Kansas, making and passing a worthless check whose value is under $500 is a misdemeanor. But if the value of the check is $1,000 or higher, the crime is considered a felony.

The penalties include up to $2,500 in fines, up to one year in jail, or both, or up to $5,000 in fines, one to five years in prison, or both.

Defenses to Worthless Check

Defenses to contest a worthless, bad, or bounced check charge can vary, so ask your criminal defense lawyer for legal advice on the best defense for your case. Some of these defenses are as follows:

• Can the prosecution prove that you obtained something of value from the transaction?
• Did you know that the check’s account had insufficient funds, or did you make a simple mistake?
• Did you sign in an individual capacity or as an agent of a company or another entity?
• Did the prosecution bring the case within the statute of limitations period (the time a civil or criminal case is allowed to be brought to legal proceedings)?

Worthless Check Charges in the U.S.

You’re not necessarily guilty of a crime if someone accuses you of writing a worthless check. The prosecution must prove you wrote the check despite knowing it was worthless before you get convicted.

If you’re guilty, you can be charged with a misdemeanor or felony, depending on the check’s amount and the state where you committed the crime.

To know more about other types of fraud and their penalties, check LookUpInmate.org’s blog page. You can also read about various topics related to prisons and crimes in the U.S. to help you become a more informed, law-abiding citizen.

FAQs

1. What happens if you fraudulently cash a check?

If your bank credits your account, it can reverse the funds later if it discovers that the check is fraudulent. Check your deposit account agreement for essential information about your bank’s fraudulent check policies.

2. Is check fraud a misdemeanor or felony in the U.S.?

Check fraud can be a felony or misdemeanor, depending on the crime’s circumstances.

For example, in Colorado, bad checks can be a misdemeanor punishable by imprisonment of 3 to 12 months, fines of $250 to $1,000, or both.

The crime can also be a felony if the amount involved is more than $400. In this case, the act is punishable by one to five years of jail time, $1,000 to $15,000 in fines, or both.

3. How long is a sentence in jail for scamming?

Scams are acts to deceive or defraud someone to obtain something, usually money. The sentence length depends on how a state defines or categorizes a scam.

In Maryland, a scam involving bad checks can be a felony charge punishable by up to 15 years in prison.

4. What do I do if a check I receive bounces?

A bounced check is a check that the bank can’t process because the account holder has insufficient funds to fulfill the payment amount on the check.

When your check bounces, you must contact the issuer and request payment. You can send a demand letter through certified mail if you can’t resolve the issue through conversation.

Documenting the events and sending a payment request letter may help your case if you take the matter to court.

5. What are fake checks?

Fake checks are fraudulent or counterfeit checks that can appear like legitimate checks to deceive consumers and bank employees.

6. Can I go to jail because of depositing a fake check?

Suppose you deposit a fake check to obtain money that isn’t yours or deceive a bank employee. You can be subject to criminal consequences such as fines, jail time, or both.

7. Is writing a postdated check illegal in the U.S.?

Writing postdated checks isn’t illegal, and changing the date on the check doesn’t change its status as a legal tender (accepted as a payment form). Postdated checks help ensure the recipient won’t deposit or cash that check until a specific date.

8. Is writing a postdated check illegal in Connecticut?

Many courts across the U.S. believe postdated checks don’t fall under criminal check fraud laws. For instance, Connecticut state law doesn’t cover postdated checks because they only cover future payments.

Still, writing a check despite knowing you need more funds to cover the amount is against the law.

9. What can I do if I think I have been the victim of check fraud?

If you believe you’re a check fraud victim, alert your local police authorities first. Provide essential details, like how much you lost and the possible manner that the fraud happened.

Also, notify your bank or financial institution so it can investigate the matter and, if necessary, close your accounts to prevent further theft or damage to your financial assets.

Furthermore, consult a check fraud lawyer for legal questions or concerns.

10. What should I do if I am accused of check fraud?

If someone accuses you of check fraud, try to collect the following pieces of evidence that may help support your innocence:

• Things proving your authority, such as an employee identification card (I.D.) or similar documents, to access or use checks
• Receipts and other proof of transactions
• Statements from witnesses or other individuals who can verify your actions

Also, consult a fraud defense attorney to help you make your case stronger.

11. Do I need a lawyer if I am charged with check fraud?

If you’re a check fraud victim, such a crime can cause significant financial loss and even lead to more serious offenses like identity theft. Consider hiring a financial or check fraud lawyer, as they’re well-versed in the legal aspects of such cases.

A lawyer can also advise and represent you in court if you need legal assistance. If you have specific questions about check fraud laws in your state, your attorney can address those questions.

References

1. FinCEN Alert on Nationwide Surge in Mail Theft-Related Check Fraud Schemes Targeting the U.S. Mail
https://www.fincen.gov/sites/default/files/shared/FinCEN%20Alert%20Mail%20Theft-Related%20Check%20Fraud%20FINAL%20508.pdf
2. Felony and misdemeanour
https://www.britannica.com/topic/felony
3. Check kiting
https://www.britannica.com/topic/check-kiting
4. The 2022 Florida Statutes (including 2022 Special Session A and 2023 Special Session B)
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0800-0899/0832/Sections/0832.05.html
5. GENERAL PENALTIES; REGISTRATION OF CRIMINALS
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0775/Sections/0775.082.html
6. VIOLATIONS INVOLVING CHECKS AND DRAFTS
http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0800-0899/0832/Sections/0832.041.html
7. Bad Checks
https://www.fordcounty.net/347/Bad-Checks
8. Bounced Check: Definition, What Happens Next, Fees & Penalties
https://www.investopedia.com/terms/b/bouncedcheck.asp
9. FDIC Consumer News: Beware of Fake Checks
https://www.fdic.gov/consumers/consumer/news/august2019.html