Roseburg Businessman Pleads Guilty to $19 Million Check-Kiting Scheme
|U.S. Attorney’s Office November 09, 2011|
EUGENE, OR—On November 9, 2011, David Gilbert, 64, of Roseburg, pleaded guilty to conspiracy to commit bank fraud. According to court documents, between December 1, 2008, and December 9, 2008, Gilbert admitted to kiting more than 500 checks, totaling more than $19 million, between his business bank accounts at PremierWest Bank and Northwest Community Credit because his car dealership, Horizon Honda Mazda, was experiencing cash flow and other financial problems. A check kiting scheme involves a transfer of funds between two or more banks to obtain unauthorized credit from a bank during the time it takes checks to clear. To cover the shortages, Gilbert admitted that he created and executed a check-kiting scheme that artificially inflated the account balances in his business checking accounts at PremierWest Bank and Northwest Community Credit Union.
By doing so, Gilbert admitted that he, in effect, was able to obtain a series of unauthorized, unsecured, and interest-free loans from PremierWest Bank and Northwest Community Credit Union, which put them at risk for the insufficient funds and deprived them of their assets. To conceal his check-kiting scheme, Gilbert further admitted that he caused the kited checks to be written for amounts that were consistent with prior legitimate deposits, to be bundled or grouped when deposited, and to be deposited at certain times to keep the kited checks from being returned for insufficient funds. Through his scheme, defendant caused PremierWest Bank and Northwest Community Credit Union to lose approximately $3 million.
The maximum penalty is five years in prison and a $250,000 million fine. Gilbert is scheduled to be sentenced in Eugene, Oregon, on January 18, 2012, at 11:00 a.m. before the Honorable Ann Aiken.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Scott E. Bradford.