We have a business customer that we need to file a SAR on for check kiting. The issue is they have had their account for years and we are not sure when the kiting started. It looks like it may have been really small amounts(under $100) until 2 months ago when that amount jumped into the thousands daily. We are having a hard time nail down a number for 2 reasons:

1. We are not sure when it started. If it started at account opening then we will have to dig through archives because the account is decades old. We believe that they tested small amounts for the past 6 months though.

2. Debits and credits include actual money from income made from their business that is hard to separate.

We can see checks deposited from customers to the business and the checks from their account at the other bank. We have all checks written off the account to the other business account.

How would everyone go about calculating what the actual check kite is?

Well, I would think if it is an actual kite, then it would not be too hard to add up the checks being deposited that you suspect were involved. I would not sweat the small dollars if you think it may have started just six months ago.

With the rapidity of check clearing today, kiting has almost become impossible if you only have two endpoints.

You are sure it is kiting? Have you asked the customer for an explanation of the business transactions?

We are very sure that this kiting because the checks are starting to come back insufficient.

I hope you have closed the account, because the last account open is the one that the bank takes the biggest losses.

as far as calculating an amount, go to the point you feel you can determine it

There is no official guidance on "how far back should we go" on any SAR subject. Go back as far as you need to to support your suspicions, but there is no point in attempting to locate the source of the Mississippi.

Search on the term "kiting;" there have been prior discussions about how to calculate the amount. Personally:

1) I agree with rlcarey, your concern is about checks deposited, not checks written, but
2) the right or wrong of the calcuation makes little or no practical difference.

The aggregate dollar amount of a kite is more theoretical than practical if your bank has yet to lose any money.

What Happy said:

1) close account
2) worry about SAR.

Closing the account is what's important. Filing the SAR is nothing but the details.

Unfortunately it is not within my power to close accounts but the account is locked so absolutely no activity can happen on the account until it is closed.

We have seen a spike of Kiting in our local area which is a rural area. We have had a few instances over the past month of kiting.

Kiting = Checks in + Checks out.

And shut it down ASAP,no exceptions.

Not necessarily, I have seen wires in and checks out and other varieties. It really depends on which bank is holding the bag of air or who is doing something stupid.