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Check fraud is a criminal act in which a perpetrator deliberately uses checks to partake in deceptive banking practices for personal gain. As of 2013, checks are the most misused form of payment in businesses, despite an overall decline in use. In 2014, paper checks represented only about 10% of all U.S. payments.

Fraudsters use a variety of methods to commit check fraud, including forging, altering, counterfeiting or consciously misrepresenting a check using a bank account that has been closed, has insufficient funds, is fictitious, or has not been authorized for use by that individual. Of these, counterfeiting or altering the MICR line of the check is the most common method.

Types of Check Fraud
Forgery
 * Main article: Forgery

The process of manipulating objects, statistics or documents. Criminals committing check fraud through forgery will typically impersonate a payer by fraudulently signing their signature or by changing the amount payable.

Alteration

Chemicals and solvents are used to remove or modify handwriting on a check to assist in forgery. This process is also known as “check washing.”

Counterfeiting
 * Main Article: Counterfeiting

Perpetrators of counterfeit check schemes either use fraudulent identification or fake checks that are drawn on valid accounts. Advances in printing and computer technology have made it easier to create a fraudulent check.

Check Kiting
 * Main article: Check kiting

Depositing a check from a bank account that contains insufficient funds to cover the transaction. Criminals take advantage of the float period (the number of days in between when a check is deposited and when it clears) in hopes that they will be able to replenish the account before the float period ends and the check bounces.

Paper Hanging

A form of embezzlement that is similar to check kiting. A perpetrator will knowingly deposit a bad check into their account but, unlike check kiting, they will disregard the float period and abandon the account.

Notable Cases
In 2013, Saquib Khan, the owner of Deli King in Staten Island, N.Y. was arrested after attempting to execute a $82 million check kiting scheme. After Hurricane Sandy devastated his business, Mr. Khan wrote himself hundreds of fraudulent checks and deposited them at various banks around the city.

The Felony Lane Gang is an organized burglary and identity theft ring that originated out of Florida and has been in operation since 2004. The crooks use smash-and-grab tactics to break into cars and steal personal and financial information including IDs, checkbooks and credit cards. The gang, made up of hundreds of individuals, has made off with millions of dollars over the past decade.

Frank Abagnale is one of the most notorious fraudsters. He would put incorrect MICR numbers at the bottom of a check so it would be routed to the incorrect Federal Reserve Bank.