The act of writing a check on a bank account in an amount in excess of actual funds on deposit in the account and then depositing that check in a second account at a different bank to create a spurious deposit there, allowing checks to be drawn, or credit secured, based on the second account, until the fraud is discovered.
check kiting - Investment & Finance Definition
a check on an account without sufficient funds to cover the amount of the
check, then depositing a check from a second account to cover the first check,
and leaving the second account short of funds to cover its obligations. The
process repeats itself, resulting in little more than a share game. Check
kiting is illegal.
check kiting - Legal Definition
To write a check while
knowing that there are insufficient funds in one’s account to cover it.
Depending on the circumstances, check kiting is often a crime, especially if
the drawer or maker has previously deposited a check from another bank into his
account and hopes that the funds from that check will reach his account before
the outgoing check is paid. Also called kite
and kiting. See also check.