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This article may be too long to read and navigate comfortably. The readable prose size is 21 kilobytes. The examples and perspective in this article may not represent a worldwide view of the subject. This article needs attention from an expert in Law. Please add a reason or a talk parameter to this template to explain the issue with the article. Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution.
A scan of a counterfeit cashier’s check that is made to appear to be issued by Wells Fargo Bank. Fraudsters may seek access to facilities such as mailrooms, post offices, offices of a tax authority, a corporate payroll or a social or veterans’ benefit office, which process cheques in large numbers. The fraudsters then may open bank accounts under assumed names and deposit the cheques, which they may first alter in order to appear legitimate, so that they can subsequently withdraw unauthorised funds. Alternatively, forgers gain unauthorised access to blank chequebooks, and forge seemingly legitimate signatures on the cheques, also in order to illegally gain access to unauthorized funds. Cheque kiting exploits a banking system known as “the float” wherein money is temporarily counted twice.
When a cheque is deposited to an account at Bank X, the money is made available immediately in that account even though the corresponding amount of money is not immediately removed from the account at Bank Y at which the cheque is drawn. However, transactions for such large values are routinely investigated as a matter of policy to prevent fraud. Instead of tampering with a real cheque, fraudsters may alternatively attempt to forge a depositor’s signature on a blank cheque or even print their own cheques drawn on accounts owned by others, non-existent accounts, etc. They would subsequently cash the fraudulent cheque through another bank and withdraw the money before the banks realise that the cheque was a fraud.
In order to hide serious financial problems, some businesses have been known to use fraudulent bookkeeping to overstate sales and income, inflate the worth of the company’s assets, or state a profit when the company is operating at a loss. These tampered records are then used to seek investment in the company’s bond or security issues or to make fraudulent loan applications in a final attempt to obtain more money to delay the inevitable collapse of an unprofitable or mismanaged firm. A bank soliciting public deposits may be uninsured or not licensed to operate at all. The objective is usually to solicit for deposits to this uninsured “bank”, although some may also sell stock representing ownership of the “bank”. Sometimes the names appear very official or very similar to those of legitimate banks. For instance, the unlicensed “Chase Trust Bank” of Washington D.