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Michael gets prison for fraud scheme
Friday, September 6, 2013
By Jeff Corcino Staff Writer
U.S. District Judge Dan Aaron Polster, U.S. District Court Judge for the Northern District of Ohio, sentenced Mark Michael, 55, of Clearfield to 30 months in federal prison by for his role in a check-kiting scheme, according to Mike Tobin, public information officer of the U.S. Attorney General's Office of the Northern District of Ohio.
Last June, Michael, and Timothy Kephart, 54, of Morrisdale were found guilty at a trial before Polster on the charges of one count of conspiracy to commit bank fraud and bank fraud related to a $3.6 million check-kiting scheme against Huntington Bank.
Michael was the chief financial officer and Kephart was the chief operating officer of Columbiana, Ohio-based Dart Trucking, which had offices in Clearfield.
Kephart and Michael were charged with kiting checks in conspiracy with Lee Stoneburner, president of Dart Trucking, from October 2007 until February 2010, from various accounts of Dart Trucking at Huntington Bank, in Columbiana, Ohio.
Stoneburner, 44, from the Columbiana area, pleaded guilty to conspiring to commit bank fraud by engaging in a check kiting scheme with Kephart and Michael, and is awaiting sentencing.
The check-kiting scheme involved writing a series of worthless, non-sufficient funds 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 "CDAs," 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.
Kephart, who was also scheduled to be sentenced Monday, had his sentencing continued until a later date.
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