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To: long-gone who wrote (63787)	2/15/2001 3:42:37 PM
From: long-gone	Read Replies (1) \| Respond to of 116770

But when the bankers do it it is called "fractional banking"? Wednesday February 14, 3:43 pm Eastern Time Press Release SOURCE: U.S. Attorney Former Nantucket Couple Pleads Guilty to Bank Fraud, Reports U.S. Attorney BOSTON, Feb. 14 /PRNewswire/ -- A Cushing, Maine couple, formerly of Nantucket, MA, plead guilty yesterday in federal court to bank fraud for engaging in a check kiting scheme. United States Attorney Donald K. Stern announced today that FREDERICK J. O'NEAL, III, 48, and his wife, LYNN M. O'NEAL, 38, of 104 Raccoon Road, Cushing, Maine, formerly of Nantucket, Massachusetts, plead guilty yesterday before U.S. District Court Judge George O'Toole to charges of bank fraud. Both defendants plead guilty to charges that they defrauded Nantucket Bank by operating a check kite. FREDERICK O'NEAL also plead guilty to a second count of bank fraud for engaging in an earlier check kiting scheme which defrauded Cape Cod Bank & Trust. The prosecutor stated at yesterday's plea hearing that if the case had gone to trial the government would have proven that the O'NEALs operated a check kiting scheme for a 15 month period, from December, 1996 to March, 1998, which defrauded Nantucket Bank out of more than a half million dollars. To carry out the scheme, the O'NEALs wrote, signed, and deposited hundreds of checks, kiting the checks between LYNN O'NEALs personal checking account held at Nantucket Bank and a business account held in the name of First Nantucket Funding, Inc. (FNFI) held at Citizens Bank. Check kiting is a scheme in which an individual writes checks on one bank account knowing that there are insufficient funds in the account to cover the check. To conceal this fact, the individual make check deposits into the first bank account drawn on a second bank account which also has no money in it. The last of the two banks to catch on to the fraud will suffer the entire loss of the fraud. Toward the end of their check kiting scheme, in order to perpetuate the float and assure checks would clear, FREDERICK and LYNN O'NEAL wrote 9-10 checks a week on each account involved. This continual flow of checks concealed the fact the at the O'NEALs had taken money from the banks. The money taken was used for personal expenses, including the renovation of a house the O'NEALs owned in Cape Propoise, Maine, and other living expenses. As a result of their fraud, Nantucket Bank suffered a loss of $518,000. With regard to the second count of bank fraud, FREDERICK O'NEAL operated a similar check kiting scheme for a month long period in the late summer of 1995. In that scheme, FREDERICK O'NEAL defrauded Cape Cod Bank & Trust out of approximately $60,000 in less than a month. The maximum penalty for each count of bank fraud is 30 years' imprisonment, a $1 million fine, and restitution. Judge O'Toole scheduled sentencing in this matter on May 17, 2001. The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Diane Freniere and Carmen Ortiz of Stern's Economic Crimes Unit. SOURCE: U.S. Attorney biz.yahoo.com