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#502279 - 02/22/06 03:42 PM
is this kiting???
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Diamond Poster
Joined: Feb 2004
Posts: 1,110
South
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We have an employee who has been going to Wal Mart and writing checks for small dollar items and then writing an over-amount for cash back. She is doing this sometimes in excess of 20 times a day. She will then bring the cash back to the bank and make a cash deposit.
Is this kiting?
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#502280 - 02/22/06 04:00 PM
Re: is this kiting???
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New Poster
Joined: Feb 2006
Posts: 10
South East US
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This is certainly a form a kiting. If she is depositing cash to the bank from an item that is not good with out that cash deposit then she is using the banks money to inflate her balance and buy time. If this were my employee, I would want to question him/her right away to get their explanation on the activity. Unless there was some real explanation that made sence, and I can't think of one, this would be grounds for termination here.
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#502281 - 02/22/06 04:06 PM
Re: is this kiting???
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10K Club
Joined: Jul 2001
Posts: 83,371
Galveston, TX
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If she is an employee - how does she get to go to Wal-Mart 20 times a day? Fire her.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#502282 - 02/22/06 04:18 PM
Re: is this kiting???
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100 Club
Joined: May 2005
Posts: 116
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I agree, she should be fired. I would also do some investigation into any cash handling activities that she is or has been involved in. It has been my experience that it is usually only a matter of time before those that are in need of extra money will give in to the temptation of taking it from the bank.
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#502285 - 02/22/06 05:21 PM
Re: is this kiting???
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Power Poster
Joined: Jul 2003
Posts: 2,675
Austin Texas
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Make sure that you check your employee handbook - we had this issue, and believe it or not, it wasn't covered. So we counseled the employee and updated our employee handbook - I think we did ask the employee to close their checking account.
_________________________
My comments are absolutely no reflection of, nor influenced by, my employer - take them at your own risk.
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#502286 - 02/23/06 04:56 PM
Re: is this kiting???
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Diamond Poster
Joined: Feb 2004
Posts: 1,110
South
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Is a SAR required? The amount is less than $5000 but this is an employee.
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#502288 - 02/23/06 09:24 PM
Re: is this kiting???
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100 Club
Joined: Nov 2005
Posts: 198
Indiana
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And I would suggest that it is best to include a generic ethics clause in any employee contract or handbook, because you'll never think of every possible form of unacceptable, firing-worthy behavior which employees may devise. Bankers, as professional handlers of other people's money, must be above ethical and legal reproach. Kiting is a crime. If you can't fire a banker for committing a financial crime, let alone for using an account at your bank to commit it, well, I don't know who can ever be fired.
_________________________
Opinions expressed do not necessarily reflect those of my employer or of my cats.
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#502290 - 02/23/06 11:49 PM
Re: is this kiting???
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Diamond Poster
Joined: Jun 2002
Posts: 1,044
The banana bin
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I agree with Whodunit. I think someone needs to sit down with her and ask her the reason for doing it.
But with it being cash, what is the fraudulent intent, here? She's using available funds for when the check posts to the account so it's not like a check kite (where the true danger lies). I don't get it.
But I wouldn't fire her. Counsel her, ask questions, monitor...but fire?!
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.
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#502291 - 02/24/06 03:22 PM
Re: is this kiting???
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Diamond Poster
Joined: Feb 2004
Posts: 1,110
South
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This has been going on for about a month with literally 20+ checks each day. How she has time I do not know. The float time is about 4-5 days. If she is not able to do this for a couple days then it craters and we have hot checks out there.
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#502293 - 02/24/06 05:44 PM
Re: is this kiting???
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100 Club
Joined: Nov 2005
Posts: 198
Indiana
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Don't feel bad if it took a minute, Whodunit. This kind of kite (often known as a "cash kite") throws a lot of bankers. We have an assistant VP who often says, "Well, this customer isn't kiting; he's just . . . " and then describes a textbook cash kite.
That's why when I define kiting, I prefer to leave the word "check" out of it. What really matters isn't the exact vehicle. It's that money is moved between two or more places in a pattern that consistently inflates the apparent total of all balances (including cash in the pocket, bank accounts, money orders, etc) above the true total. Normal activity causes the apparent total to fluctuate above and below the true balance, not be consistently high, like what this employee is achieving.
_________________________
Opinions expressed do not necessarily reflect those of my employer or of my cats.
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#502294 - 02/24/06 06:52 PM
Re: is this kiting???
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Diamond Poster
Joined: Jun 2002
Posts: 1,044
The banana bin
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AhHa! The lightbulb flashed on. Can her. Just kidding. Maybe.
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.
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#502295 - 02/24/06 07:04 PM
Re: is this kiting???
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100 Club
Joined: Jul 2005
Posts: 191
Kentucky
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If it's been going on for that long, with that volume, is this the first time it has been noticed? If not, has someone tried to talk to her about this? Depending on her reaction to the talk, or her explanation, it may be grounds to terminate on violation of your ethics policy.
If you had a customer doing this, would you keep the account? More importantly, would you then offer them a job handling money? If the answer is no to both, then firing doesn't seem as extreme an option. How will an examiner react if they find out that an employee has been doing this and was allowed to continue?
Of course, she may then try to empty her account and leave the bank holding the bag for all those floating checks. That's what, 80-100 checks over that time?
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The above is my opinion, and is frequently valued at USD 2ยข or less.
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#502297 - 02/24/06 07:54 PM
Re: is this kiting???
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10K Club
Joined: Nov 2003
Posts: 12,846
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What is the impact on your bond coverage due to your knowledge of illegal activity by an employee in a position of trust?
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#502298 - 02/24/06 10:08 PM
Re: is this kiting???
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Most bonds include a deductible that would greatly exceed whatever this meager (I trust) loss might become.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#502299 - 02/24/06 10:08 PM
Re: is this kiting???
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100 Club
Joined: May 2005
Posts: 145
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I agree with the others that feel this is a kite and you need to get to the bottom of this quickly. Unless this employee can convince you this is not a kite you are required to file a SAR. Refer to the SAR instructions for Insider abuse involving any amount.
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#502300 - 02/24/06 10:14 PM
Re: is this kiting???
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10K Club
Joined: Nov 2003
Posts: 12,846
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Quote:
Most bonds include a deductible that would greatly exceed whatever this meager (I trust) loss might become.
I wasn't concerned about their coverage for this potential loss.
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#502301 - 02/24/06 10:28 PM
Re: is this kiting???
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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True. Failure to prevent this sort of fraud could affect the bank's ability to keep its coverage, or raise its premium.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#502302 - 02/27/06 02:48 PM
Re: is this kiting???
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10K Club
Joined: Nov 2003
Posts: 12,846
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I also think that if this employee was to later engage in fraudulent activity, the bank's coverage for those acts could be problematic.
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