Moms, Children and Check Kiting

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Question:

Two questions regarding kiting.1) We have an account for an individual who writes a check from bank A (us) to her daughter. This item is deposited into Bank B. Then daughter writes check from Bank B (same amount) for our customer to deposit into Bank A (us, again) either same day or next. Does this fall under 'kiting'? 2) Also, we have a mother who monthly writes out 4 checks to her children (1 per child) and then re-deposits into the same account the checks are written from. Is this an issue? We aren't sure that the children are endorsing the checks sometimes they are endorsed For Deposit Only. Please advise on both of these issues.

Answer:

Both of these scenarios sound like kiting. I can't think of any other reason for conducting this type of activity. However, before I file a SAR, I would try to address these issues with the individuals to determine if there is a reasonable explanation. If you don't get a reasonable explanation, I believe a SAR is warranted (assuming that the dollar threshold of $5,000 is met).

First published on BankersOnline.com 07/04/05