I have discovered an employee is getting cash from our ATM at 3:00 and depositing it into his account the same day in order to keep his account positive. (The withdrawal posts the next day.) This tends to begin a few days before payday and grows each day until the payday. In March, $1600 was deposited.

Is this kiting or does kiting require two bank accounts?

Is this a criminal activity requiring a SAR and notification to the bonding company?

Another issue to consider is that as an employee, he has $700 ODP available, but is not using it, I'm assuming to avoid the $22 NSF fee. So this could possibly be prevented.

It sounds like a cash kite to me. To break it down a little further, the employee's activities create an artificial balance which he can access with his ATM card. All it takes is one instance of 'forgetting' to make a deposit, and he's got extra cash in hand - at your expense.

I would suggest, at minimum, revoking his ATM card. If that doesn't prompt him to handle his account responsibly, I'd follow with revocations of his account and his job.

Ditto, he is kiting. This would be a one chance and next time you are out situation.

According to other threads it is the general consensus that kiting by an employee requires a SAR. Do you think this is "SAR-able" as being a criminal activity?

We terminate on the 1st offense, due to bonding..And I always file a SAR on these, just to be on the safe side..

As the mandatory reporting threshold for insider abuse is $0, a SAR is required.

This type of activity is grounds for termination in my opinion. Obviously there are money problems with this employee and this activity could possibly escalate into something more severe. You may chose to give a warning, but I know that here it would likely be immediate termination, in fact 2 persons were left go here for this same thing many years ago.

Jac, you seem to be sitting on the same fence I am. Doing as you stated in your first post and counsel/warn/monitor would allow him to keep his job. On the other hand, filing a SAR would require notifiying the bonding company, which will probably say the employee has to go.

Back to my original question: Is this really a kite? All definitions I find say that two bank accounts are required.

It's not necessisarily a 'kite' in the strictest definition (it doesn't even involve checks.) But it is activity that has the same effect as a kite- creating an artificial balance in the account. As such, it opens the bank up to the same risks as a kite.

Regarding your first point, filing a SAR does not mean the employee must be terminated, nor does it mean that the bonding company must be notified. Doing one or both may be your best course of action in this case, it may not. Personally, I would be inclined to notify the bonding company and terminate, simply because of the loss exposure involved. I left my response open ended to emphasize that ultimately, these decisions are a matter of bank policy and the requirements of your bonding company, as opposed to regulatory requirements.

One other suggestion I can add is, if you are considering retaining this employee, place him on mandatory leave while you complete an audit/review of his area of responsiblity (whether it is a teller drawer or some back office function) and his account(s.)