Editing Cheque fraud (section)

==Types of cheque fraud==

===Cheque kiting===
{{Main|Cheque kiting}}
Cheque kiting full refers to use of the [[float (money supply)|float]] to take advantage and delay the notice of non-existent funds.

=== Embezzlement ===
While some cheque kiters fully intend to bring their accounts into good standing, others, often known as ''paper hangers'', have pure fraud in mind, attempting to "take the money and run."

==== Bad cheque writing ====
A cheque is written to a merchant or other recipient, hoping the recipient will not suspect that the cheque will not clear. The buyer will then take possession of the cash, goods, or services purchased with the cheque, and will hope the recipient will not take action or will do so in vain.

==== Cheque conversion ====
A cheque is endorsed by a non-payee of the cheque and then cashed or deposited fraudulently. The non-payee will then have cash free and clear, and will hope the true recipient will not find out until much later.

==== Abandonment ====
The paper hanger deposits a cheque one time that they know is bad or fictitious into their account. When the bank considers the funds available (usually on the next business day), but before the bank is informed the cheque is bad, the paper hanger then withdraws the funds in cash. The offender knows the cheque will bounce, and the resulting account will be in debt, but the offender will abandon the account and take the cash.

Such crimes are often used by petty criminals to obtain funds through a quick [[embezzlement]], and are frequently conducted using a fictitious or stolen identity in order to hide that of the real offender.

This form of fraud is the basis for the [[Advance-fee scam#Fake cheque and cheque cashing scams|Nigerian cheque scam]] and other similar schemes; however, in these cases, the victim will be the one accused of committing such crimes, and will be left to prove their innocence.

=== Forgery ===
Sometimes, [[forgery]] is the method of choice in defrauding a bank. There are three main types of cheque forgery:<ref name=":0">{{Cite web|url=https://www.chequeandcredit.co.uk/information-hub/cheque-fraud-advice/types-cheque-fraud|title=Types of cheque fraud &#124; Cheque & Credit Clearing Company|access-date=2019-07-29|archive-date=2019-07-29|archive-url=https://web.archive.org/web/20190729103923/https://www.chequeandcredit.co.uk/information-hub/cheque-fraud-advice/types-cheque-fraud|url-status=live}}</ref> (a) Counterfeit. This is a cheque that has been created on non-bank paper to look genuine. It relates to a genuine account. (b) Forged signature. The cheque is genuine, but the signature is not that of the account holder. (c) Fraudulently altered. In this case a genuine cheque has been made out by the genuine customer but it has been altered by a fraudster, typically by altering the recipient’s name or by adding words and/or digits in order to inflate the amount. In England and Wales, section 64 of the Bills of Exchange Act of 1882 provides that where a bill or an acceptance is materially altered without the assent of all parties liable on the bill, the bill is made void except when used against a party who has himself made, authorised or assented to the alteration, and subsequent endorsers.<ref name=":1">{{Cite journal|url = https://heinonline.org/HOL/LandingPage?handle=hein.journals/intfinr5&div=218&id=&page=|title = Banks and the Fraudulent Alteration of Cheques|journal = International Financial Law Review|year = 1986|volume = 5|page = 29|last1 = Fidler|first1 = P. J. M.|access-date = 2019-07-29|archive-date = 2020-10-31|archive-url = https://web.archive.org/web/20201031135823/https://heinonline.org/HOL/LandingPage?handle=hein.journals/intfinr5&div=218&id=&page=|url-status = live}}</ref>

Other cases include that of [[Frank Abagnale]], where the perpetrator passes or attempts to pass a cheque that has been manufactured by him/herself, but which represents a non-existent account.

=== Unusual cases ===
[[Cheque washing]] involves the theft of a cheque in transit between the writer and recipient, followed by the use of chemicals to remove the ink representing all parts other than the signature.<ref>{{cite web |author=Charles Bruce |url=http://www.ckfraud.org/washing.html |title=Check Washing - WHAT IS IT? |publisher=Ckfraud.org |access-date=2012-09-02 |archive-date=2013-07-03 |archive-url=https://web.archive.org/web/20130703181503/http://www.ckfraud.org/washing.html |url-status=dead }}</ref> The perpetrator then fills in the blanks to his or her advantage.

Sometimes the cheque fraud comes from an employee of the bank itself, as was the case with Suzette A. Brock, who was convicted of theft for writing five corporate cheques to her own birth name from her desk as a loan servicing agent for Banner Bank of Walla Walla, WA.<ref>{{cite web|url=http://www.union-bulletin.com/articles/2009/04/08/local_news/090408local06theftsentence.txt |archive-url=https://web.archive.org/web/20090419183216/http://www.union-bulletin.com/articles/2009/04/08/local_news/090408local06theftsentence.txt |url-status=dead |archive-date=April 19, 2009 |access-date=December 17, 2008 |title=Walla Walla Union-Bulletin: Local News }}</ref>

The most notorious "bad cheque artist" of the 20th century, [[Frank Abagnale]], devised a scheme to put incorrect [[MICR]] numbers at the bottom of the cheque he wrote, so that they would be routed to the incorrect [[Federal Reserve Bank]] for clearing. This allowed him to work longer in one area before his criminal activity was detected.<ref>{{cite book |last=Abagnale Jr. |first=Frank |author-link=Frank Abagnale Jr. |title=Catch Me If You Can: The True Story of a Real Fake |year=1980 |publisher=Grosset & Dunlap |location=New York |isbn=0-448-16538-4 }}</ref><ref>{{cite video |people=Leonardo DiCaprio, Steven Spielberg (director) |date=2002 |title=[[Catch Me If You Can]] |medium=motion picture |publisher=DreamWorks |location=USA
}}</ref> In the movie ''[[Catch Me If You Can]]'', which outlines Abagnale's crime spree, it shows Abagnale soaking plastic [[Pan American World Airways|Pan Am]] airplanes in his bathtub and removing the Pan Am insignia on the toys. He would then place the decals on the bad cheques he was writing while pretending to be a Pan Am pilot. The film depicts Abagnale amassing over $2.5 million, while in reality he collected just under $1,500.<ref name="Logan2020">{{cite book|author=Alan C. Logan|url=https://books.google.com/books?id=WIHdzQEACAAJ|title=The Greatest Hoax on Earth: Catching Truth, While We Can|date=December 2020|publisher=Indiana Landmarks|isbn=978-1-73555-722-9}}</ref>