CLEVELAND, Ohio – Mark Michael, 55, of Clearfield and the chief financial officer of Dart Trucking, was sentenced today to 2.5 years in prison by U.S. District Judge Dan Aaron Polster in relation to a $3.6 million check-kiting scheme against Huntington Bank, according to Michael Tobin, public information officer for the U.S. Attorney’s Office for the Northern District of Ohio.
However, the sentencing was continued for Timothy Kephart, 54, of Morrisdale and the chief executive officer of Dart Trucking, said Tobin. He didn’t indicate as to when Kephart would appear for sentencing in relation to the case. Michael and Kephart were both found guilty of one count of conspiracy to commit bank fraud and one count of bank fraud in June.
Kephart and Michael were charged with kiting checks, in conspiracy with Lee Stoneburner, the president of Dart Trucking, from October of 2007 until February of 2010, from various accounts of Dart Trucking at Huntington Bank, in Columbiana, Ohio, according to a previously published press release from the U.S. Attorney’s Office. Stoneburner, 44, from the Columbiana, Ohio area, previously pleaded guilty to conspiring to commit bank fraud.
A check kiting scheme involves writing a series of worthless, non-sufficient funds (NSF) checks, where a NSF check from one bank account was deposited into another account; another NSF check would then be written to cover the previous NSF check, concealing the overdraft from the bank, such that a false balance, or “float,” was created in the accounts. The defendants would then use that falsely created “float” to pay their bills, expenses and to pay their salaries.
The evidence at trial established that it was a complicated, daily task to compute the amount of NSF checks, which had to be written and to track what accounts had to be “covered” and from which accounts a NSF check could be written to cover a particular account. These officers involved their clerical staff in tracking and covering these checks. The use of “controlled disbursement accounts” or “CDA’s,” which allowed the company an extra day to post its expenses, before they paid them, gave the company a float it could draw upon over the course of this scheme.
This case was prosecuted by Assistant U.S. Attorney Christian H. Stickan and Assistant U.S. Attorney Perry D. Mastrocola, following an investigation by the Federal Bureau of Investigation, Youngstown, Ohio.