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#161520 - 02/18/04 09:25 PM
Cash Kite
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Anonymous
Unregistered
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How do other Security Officers handle this situation: A customer has a checking account that they know will be going NSF. So they take a check drawn on our bank, cash it another bank, and then run over and deposit the cash here. Then they do the same thing tomorrow...then the next day, etc...until they get funds to cover the original shortfall. Our risk is minimal, as the deposit here is cash, but we view this type of activity as unfavorable, to the point that once it gets over $ 5,000, a SAR is filed. I am curious how other banks view this activity, and how they respond...also, we give the customer 10 days notice and close the account.
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#161521 - 02/20/04 04:00 PM
Re: Cash Kite
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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It sounds to me like you are on top of all things concerned.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#161522 - 02/23/04 09:54 PM
Re: Cash Kite
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100 Club
Joined: Feb 2003
Posts: 138
Iowa
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I find myself with the same dilemma. Our customer only does it once or twice a month. I have called him on it, and he was supposed to stop. I don't think he thought I would continue to watch, so he has continued the activity. I will probably give him 10 days and close the account.
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Opinions are my own, not those of my employer, and should not be construed as legal advice.
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#161523 - 09/07/04 12:45 PM
Re: Cash Kite
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Anonymous
Unregistered
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Where is the cash kite explanation ???
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#161524 - 09/07/04 01:18 PM
Re: Cash Kite
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10K Club
Joined: Jul 2001
Posts: 85,170
Galveston, TX
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Quote:
Where is the cash kite explanation ???
I think the original poster did a fine job in defining a "cash kite".
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#161529 - 01/07/05 04:06 PM
Re: Cash Kite
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Anonymous
Unregistered
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So your answer on how to handle a cash kite
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#161530 - 01/07/05 04:09 PM
Re: Cash Kite
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Anonymous
Unregistered
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Once again how does the Security Officer handle a cash kite,i.e., what is said to the customer?
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#161531 - 01/07/05 11:43 PM
Re: Cash Kite
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10K Club
Joined: Nov 2003
Posts: 12,846
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Quote:
what is said to the customer?
we usually say "stop" the first time. the second time, we say "goodbye".
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#161533 - 01/19/05 01:34 AM
Re: Cash Kite
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Anonymous
Unregistered
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Security Guy-
Regarding the Cash kiting issue you may want to check out (Ad removed) they have a video on that subject that can be helpful. If you have questions on this subject chances are your tellers do to. Check them out.
Last edited by Andy Z; 02/06/05 08:59 PM.
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#161534 - 01/20/05 02:50 PM
Re: Cash Kite
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Member
Joined: Nov 2004
Posts: 76
Massachusetts
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Although this is not true Check kiting and the risk is really on the other party cashing the checks, if I knew this was happening I would treat it as a check kiting.
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Learning Banker
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#161535 - 02/07/05 02:15 PM
Re: Cash Kite
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Anonymous
Unregistered
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Are you all saying you'll close the account even though you don't see where your institution is at risk of losing money? I'm watching an account right now that deposits over $2000.00 cash everyday and then about ten checks to tow different parties clear his account. This happens everyday. I advised closing the account, but our Security Dept. says they won't do anyting until he goes overdrawn. I think the money is lost then. What do you all think?
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#161536 - 02/07/05 05:00 PM
Re: Cash Kite
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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IMO, if a bank detects activity in an account that is likely to evolve into a loss for the bank, the bank should act to close the account.
If this were a true check kite, with other banks involved, I'd imagine your security officer would "pull the plug" before incurring losses, if possible.
Cash kites are a little tricker to keep aloft, but they have some of the same characteristics as a check kite -- larger and larger amounts are involved over time, and eventually the customer pulls out more in one day than gets deposited, and the bank loses.
Depositing cash and immediately issuing checks as decribed in post #315776 (Anonymous, above) can also be a handy way to launder money. Your security officer should be concerned about that aspect of the account, if nothing else.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#161538 - 02/08/05 01:17 PM
Re: Cash Kite
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Consider the time involved in researching the cash kite described by Fraudman, and double it because of the two banks involved. Figure the cost of that effort, and balance it against the minimal "real" balance in the two accounts, and the risk of the kite falling apart, leaving your bank holding a loss.
Now think about whether your bank would want to keep such accounts open, waiting for an overdraft.
_________________________
John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#161539 - 02/27/06 11:28 PM
Re: Cash Kite
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Diamond Poster
Joined: Jun 2002
Posts: 1,044
The banana bin
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You guys totally jinxed me!
I stumbled across one and you're right: it's a hard concept to visualize.
I've got someone that makes cash deposits and in the same day writes checks to the casino's for cash. I've made a spreadsheet showing the days she makes deposits vs. the days the checks are written (not cleared). They pretty much broke even. Should I go back farther to see what "triggered" it....because right now, she's doing enough to keep it afloat. Something had to have snowballed it.
I also did a comparison of activity from last year at this time. While she was doing it, to a tune of about $1,500.00 a month, she's now evolved to $28,000.00 in a month.
Where would she have benefitted from it?
Thanks for everyone's help and experience? (oh and yes, I'll be closing her and SAR filed but I want to learn the WHY's of it all!)
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.
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#161541 - 02/28/06 02:18 AM
Re: Cash Kite
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Diamond Poster
Joined: Jun 2002
Posts: 1,044
The banana bin
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I guess where I'm having a hard time is trying to pin down where she benefited from it. If she's writing checks for $1,000.00 and depositing cash of $1,000.00, where's the profit? I'm assuming the more I dig, I'll find something. But I don't get it. Sometimes: I'm kinda dense.  (But sshhh don't tell my coworkers!)
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.
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#161542 - 02/28/06 05:38 PM
Re: Cash Kite
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Power Poster
Joined: Jul 2003
Posts: 2,675
Austin Texas
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Likely wherever she is cashing the checks has a couple of days in processing before their clearing her account, so as long as she stays a couple of days ahead, she's ok - if they presented the checks as soon as they were cashed would probably be a different story. By building in a couple (or more)days of float, she probably has given herself a few $1000 to play with.
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My comments are absolutely no reflection of, nor influenced by, my employer - take them at your own risk.
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#161543 - 03/01/06 02:20 PM
Re: Cash Kite
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Gold Star
Joined: Nov 2004
Posts: 349
Cheeseland
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Look at the dates written on the checks, not necessarily the dates paid; granted this is not always correct but as TexTrainer said, it may show the processing time between the two.....
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#161544 - 03/01/06 06:14 PM
Re: Cash Kite
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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And if you are concerned the check dates might be manipulated, look at the dates the checks were deposited. Casinos don't hold checks for deposit any longer than absolutely necessary.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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