I hope someone can help me with this situation. In reviewing employee statements, I noticed that an employee makes a cash deposit several times a week. It appears that the employee is cashing a check somewhere else and depositing the cash. The check does not clear our bank for 1 - 2 days. We cannot prove this just a gut feeling. What can I, what should I do next? Thanks for your assistance.

I have seen a lot of check kiting cases, thankfully none involving employees. At first I was very trusting of people and always gave the benefit of the doubt, but I have come to realize that if it looks like kiting it probably is. The best thing to do is to sit down and take a good hard look at the statements. Look at when the checks were cashed and what the balance was in the account at that time without the cash deposit. Chances are that there wasn't enough to cover the check without the cash deposit. Often the amounts of the check and the deposit will be exactly the same amount which kind of supports the kiting theory even more.

Employees know how to kite and "play the float". When I was a teller many years ago, I saw this quite often with fellow tellers the week before payday. They would go to the grocery store and cash a check and bring the cash in and deposit it to cover checks that were going to clear before payday. In fact, a couple of tellers were left go for kiting with our own ATM. The ATM was not online so after it was balanced, withdrawals would not post until the next day. They would take the money out of the machine after it was balanced and deposit it on that days business through the teller line.

I think it is very important that if it appears that the employee is kiting that you bring it to the attention of their supervisor. Kiting is a sign that they are having financial trouble and could lead to something much worse if the situation is not addressed. They are already commiting a crime by kiting, and unlike most customers, the employee knows it is a crime. They probably do not realize that their statements are being monitored.

Kiting is hard enough to deal with when it is a customer, good luck with this one.

This sounds like it could be kiting, and employees are not immune to financial difficulties and temptations to try and "play the system". Sounds like you definitely need to do some further digging - your internal audit department should definitely be involved. Also, keep in mind that SAR regulations give you no leeway in filing a SAR for criminal activity involving an employee. There is no dollar threshhold. Even if they are only kiting $20 a day, it is still kiting and still requires SAR filing. Now I would not say that I would advocate a SAR filing anytime an employee floats a check, but if you've got a pattern of activity, the dollar amount is not relevant if it is an employee for SAR purposes.

For the record- I concur with Tom and Jim on this one. But I'd like to ask about your statement that you cannot prove this. I woudl guess that you are closer to proof (or at least strong evidence) than you think. Are you only reviewing the statement, or are you reviewing the actual checks as well? I would suggest taking a look at the checks, and looking for patterns in the payee name, the bank of deposit, and the time between when the checks are cashed/deposited at the depositing bank vs. when the cash is deposited at your bank.

If it proves to be true that the teller is kiting checks as suggested, you should consider prohibiting your tellers from processing their own transactions, if you do not already do so. Employees are mor reticent to take those kinds of transactions to another teller.

It will give you another stick to use against those employees, and cut down the occurrences.

I, too, agree with what everyone else has told you. I do realize how you feel about wanting to be more certain before you do anything. What I usually do is set up a spreadsheet. This helps me see the flow closer then I compare it to each item. You can see the net affect on the spreadsheet day by day. Then you will feel confident about completing a SAR, reporting to your superiors, etc.

Also keep in mind, some employees actually know the system better than you.

Good Luck.

Opinions are mine not my employer