Michigan Check Fraud Law
Michigan Check Crime Defense Attorneys
At Kronzek and Cronkright, PLLC, our trial lawyers have helped countless clients avoid jail and prison for financial crimes. In Michigan, there are numerous reasons why check writing results in criminal charges. In each instance, the charges are serious and require the assistance of an experienced financial transaction attorney.
A bank might return a check unpaid as “uncollected funds” if the funds used to base the check on have not cleared the bank yet. For example, if an individual deposits a check and immediately writes a check for that exact amount, the bank wants to make sure that the original deposited check clears first.
“Check kiting,” is a form of check fraud where an individual intentionally inflates the balance of a bank account by depositing a check from an account with nonsufficient funds to cover a check written on the deposit account. The individual then deposits money before the fraud is discovered, or replaces the monies with other NSF checks. If the person has no intention of replenishing the missing funds, then this is known as “paper hanging.” Although, modern security measures make instances of check kiting and paper hanging far less common than they previously were.
Nonsufficient Funds / Bounced Checks
Banks will often return checks marked “NSF” which means nonsufficient funds, if a check is written on an account with insufficient funds to cover that check. An inadvertent overdraft is not generally prosecuted. Normally, the individual is given a five day notice to rectify the bad check. After that, Michigan law allows the lack of payment to be considered as evidence of intent to defraud.
To prove an insufficient funds charge at trial, the following must be proven beyond a reasonable doubt: (1) intent to defraud; (2) the drawing of a check upon a bank; and (3) knowledge by the check writer that the bank account has insufficient funds or credit to cover the check.
If an individual no longer holds a checking account and writes a check against that account, this is called a “no-account” check. To prove a felony writing of a no-account check, the following must be proven at trial beyond a reasonable doubt: (1) defendant signed a check for a specific amount to a specific person on a specific date; (2) the check was drawn on a specific bank; (3) on that date, the defendant had no account or credit with the specific bank; (4) the check in question was presented for payment; and (5) at the time of check writing and delivery the defendant intended to defraud.
Penalties for Violations
The person who wrote the dishonored check is liable to the payee. Within 7 business days excluding holidays after receiving a written demand for the amount, the individual must pay the full amount of the check plus a processing fee of $25.00. Within 30 days after receiving the demand notice, the individual must pay the full amount of the check plus a processing fee of $35.00.
If found liable in a civil action, the person must pay:
- The full amount of the check, draft, or order;
- Civil damages of twice the amount of the check, or $100.00, whichever is greater;
- Costs of $250.00.
The penalty for a no-account check is up to 2 years in prison, or by a fine up to $500.00, or both. Also, a person writing 3 or more nonsufficient funds checks in a 10 day period will be subject to the same penalty.
For insufficient funds checks with the intent to defraud, the penalties are as follows. If the check amount is less than $100.00 and a first offense, then this is a misdemeanor with a penalty up to 93 days in jail, a fine up to $500.00, or both. If the check amount is less than $100.00 but the individual has 1 or more prior convictions, then this is misdemeanor with a penalty up to a year imprisonment, a fine up to $1,000.00, or both.
If the check amount is $100.00 to $500.00 and this is a first or second offense, then this is a misdemeanor with a penalty up to 1 year imprisonment, a fine up to $1,000.00 or 3 times the amount payable, whichever is greater, or both. If the check amount is $100.00 to $500.00 plus two or more prior convictions, then this is a felony with a maximum penalty up to 2 years in prison, up to a $2,000.00 fine, or both.
If the check amount is $500.00 or more, then this is a felony with a maximum penalty up to 2 years in prison, up to a $2,000.00 fine, or 3 times the amount payable, whichever is greater, or both.
Check forgery is a felony punishable up to 7 years in prison.
We Assist Individuals and Businesses Alike
All check related crimes subject the accused to the possibility of jail and prison. Over the years, we have developed strategies that help keep our client from being unnecessarily incarcerated. We offer free initial consultations to clients seeking to retain one of our premium Michigan financial transaction attorneys.