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Ansuz07 t1_iyegisl wrote

It's very common for banks to make a portion of a deposit available immediately as a courtesy for its customers. While it may take several days for the checks to clear and the customer to access all of the deposit, it does tend to keep them happy if the bank floats a portion of the difference for a couple of days.

Sorokin took advantage of this fact, depositing hundreds of thousands of dollars in bad checks, while only withdrawing tens of thousands against them.


teethalarm t1_iyepvho wrote

Bank teller here. The kind of check fraud that I see the most often is that someone will steal account information, usually a business account, and then make fake checks using that account info. They will then deposit these checks. If it looks legitimate and the account has funds, bank tellers won't always look deep into the checks. Then the check clears and the person depositing it can withdraw it.


mcgato t1_iyf9l40 wrote

I was on grand jury duty and had a case like this presented. A smallish business used a courier to take checks to accounts. The courier used the account and routing info from those checks to get checks for himself. He would then pay his bills with those checks, except he would overpay. So bill for $120 would get a check for $1120. He would contact the company about the overpayment, and get a refund check from the company. We voted to indict.


WildlifePolicyChick t1_iyehee2 wrote

It's called check kiting. There's a 'float' between depositing a check and the actual funds appearing in the bank. During the float, banks will allow withdrawals against the deposit.

Obviously if the funds do not come through, it's fraud.


gribson t1_iyemi2f wrote

Supposedly, there used to be a way to doctor cheques in a way that would keep them in transit perpetually. The fake cheques never cleared; but also never bounced, so the bank wouldn't try to reclaim that float.


rsclient t1_iyevk72 wrote

Yes, I know how it's done! Every check has written on it the bank (routing number) and the bank's account number. The numbers are written in magnetic ink and read with a magnetic check reader.

However, not all banks use the fancy magnetic equipment. In the very old days, there would literally be bank courriers with bags of checks who would meet at a "clearing house" to swap all their checks around. Big banks with lots of volume really wanted to automate the process; small banks were happier with just a manual process.

To make a "perpetually routed" check, print a routing number (bank number) using magnetic ink that points to a small, manually-sorting bank. Then cover that over with a non-magnetic ink routing number of a big bank.

Deposit the check into the big bank, and they will read the magnetic routing number and send it to the small bank. At the small bank, they will see that the check isn't really for them, and they will send it back to the big bank. And then the big bank read the magnetic routing number, and sends it back to the small bank...

Nowadays it seems like most banks work with the check optically, so the magnetic routing number isn't really needed any more.


Digital_loop t1_iyf9p19 wrote


And countdown until someone posts this in the til subreddit.


zvii t1_iyfbrjy wrote

Good movie on this with Leonardo DiCaprio called Catch Me if You Can


LetMeBe_Frank t1_iyfegrg wrote

Now that we've learned the truth about the actual person it's based on, the real con is the friends we made along the way


zvii t1_iyfbmic wrote

Good movie on this with Leonardo DiCaprio called Catch Me if You Can


TehWildMan_ t1_iyehk9w wrote

Banks will often immediately make available part of the value of the check immediately as a courtesy.


6horrigoth OP t1_iyefga2 wrote

Coming from a country where we don’t really use checks, it seems absolutely ludicrous to me that banks would allow this kind of loopholes in their systems in the US. Shouldn’t it be mandatory that the bank can verify the existence of the funds before allowing withdrawals?


homeboi808 t1_iyeged5 wrote

This is why most places don’t take checks, only cash or card. Usually only if you really trust the person do you accept checks; and that was her whole scam, to make people think she was trustworthy.


Malkiot t1_iyeixy6 wrote

But why even use checks in the first place? Seems like a weird thing to hold onto.


Ansuz07 t1_iyekaan wrote

They are still the easiest way to move moderate amounts of money at low cost. I'm not going to show up and pay my $2k HOA dues in cash, nor am I going to bother with trying to set up a wire transfer. I'm just going to cut them a check and move on.


Malkiot t1_iyemrmt wrote

Does the US not have really easy wire transfers as we do in the EU? I can literally transfer money from an account at any bank to any other bank within the EU from my phone. I only need the recipient's account number. Hell, for 2€ (BS fee) I can do an instant transfer which credits the recipient's account immediately.


OneMoreTallDude t1_iyeniwi wrote

Can't speak for all banks, but I bank with a credit union and they offer something similar. I can send money to any other credit union checking or savings account instantly, for free. They charge me to send money to federal banks though or internationally.


modern_aftermath t1_iyfa5b7 wrote

Yes, it’s practically the exact same system, with the same function and features and similar small fees for instant transfer, in the US.


[deleted] t1_iyencht wrote

How the is it easiest? A bank transfer is much easier. Takes like 2 min to type the info online. Or how backwards is the American banking system then?


freddy_guy t1_iyeu8mp wrote

>Takes like 2 min to type the info online.

You know that not everyone banks online, right?



Godzarius t1_iyewhk6 wrote

all of sweden does.


homeboi808 t1_iyf81er wrote

Sadly, we have elderly people who don’t even know how to power off their phones. Add onto the fact of all the people afraid of scams. I have an uncle who Carrie’s around his money in a ziploc bag so he can see if he is missing any cards.

I’m a high school teacher, I have students who don’t even know how to use a laptop. I had a student bring in her own MacBook and I surprise her by being able to right click.

But, we do have bank-to-bank transfers which are free & instant, but only if the receiver & sender banks support that platform. Zelle is the platform most used in the US (vast list of supported banks), but there are of course some that have their own platform they made and aren’t willing to ditch it.

You do have wire transfers, but they take longer to setup (verification), it takes a few days to go thru, and it has a small fee.

This is why Venmo, Square/CashApp, etc. are still around.


phdoofus t1_iyejauy wrote

A lot of people get paid by paper checks still, esp manual laborers. They're going to need to get groceries and pay the rent. They can't really wait several days for their pay to show up in their accounts


[deleted] t1_iyen66a wrote

Huh? You really still get paid with fucking checks in the USA? Why not just transfer the money to bank account? Would be easier for everyone.


Ocean_Hair t1_iyerz3z wrote

Direct deposit is definitely an option for most American office jobs. You have to opt into it.

Not everyone has a bank account, though, and poorer people are less likely to have one.


Terrafire123 t1_iyf7slo wrote

> Not everyone has a bank account, though.

....What? Why? Bank accounts don't exactly cost money... And don't you need a bank account to get a credit/debit card?


freddy_guy t1_iyeudjn wrote

>Would be easier for everyone.

Many small employers disagree. They believe that writing a few cheques each week is actually easier than having to deal with online payments.


mlm01c t1_iyesxjk wrote

Undocumented workers rarely have bank accounts so being paid by check and then getting it cashed at a place that cashes checks, and charges a fee, is common.


Isak531 t1_iyes1ac wrote

Perhaps having a bank account costs as much as receiving healthcare in the US lol


TheVermonster t1_iyeu254 wrote

Prior to overdraft "reform". I deposited a check then went shopping a few weeks later with no issues. The next Monday I stop to grab a coffee and my debit card declined. I ran to the ATM only to find that I had -$700 in my account. The check had bounced, leaving all those previously ok transactions to suddenly incur a $35 overdraft fee.


drafterman t1_iyegbl1 wrote

Because that process takes time, up to several days. And if it took several days for people to get money from their check no one would use it. So instead they give you the money immediately while the transaction is verified.

Yes, it allows for these loopholes, but people exploiting this in this manner are far and few between. It'd be more harmful getting rid of this loophole then allowing it.


Common_Technologies t1_iyehvef wrote

>It'd be more harmful getting rid of this loophole then allowing it.

What is the gain in allowing it?

According to Wikipedia, she started in 2013 - so everyone in New York, USA had a card, so allowing oneself to get scammed by a check was a choice.

PS: I'll mail you a check for 3 milliard EUR, just send 1 milliard EUR to my bank account.


Ansuz07 t1_iyek07t wrote

> What is the gain in allowing it?

People tend to get upset when the bank doesn't let them access their money. Telling a client - particularly a wealthy one - that they can't have their money for several days may lead to them moving to another bank.

Since the vast majority of people deposit valid checks, there is little risk to the bank allowing them access to funds before those checks have cleared.


Cetun t1_iyesgt8 wrote

I understand having a wealthy client, but how do they know she's wealthy, All they have was a brand new bank account and a check for $100,000. For that amount of money couldn't you just have a bank manager Make a quick phone call to see if she even has $100,000 in her account? If shes kiting then the other bank will tell them that she has a balance that hasn't cleared yet.


freddy_guy t1_iyeu31u wrote

>couldn't you just have a bank manager Make a quick phone call to see if she even has $100,000 in her account?

That would not be a "quick phone call", and you would need to make large numbers of such calls each and every day.


Cetun t1_iyeulyf wrote

That sounds like a problem with the banking system that they can't do that. They don't keep $50,000 in their drawer, while they're going to check out 5 stacks and the bank manager is going to have to authorize that anyways. You won't have to do that A lot of times it would only be under the circumstances where someone is coming in to the bank who has a relatively new account, whose first or second deposit is $100,000 check.


grimgaw t1_iyf0qmi wrote

If only one could devise a computer system which does that automatically...

In the UK you can check your account balance on any bank's ATM. Clearly they share that information here. Why not in the mighty USA?


nowayjose081 t1_iyeptn1 wrote

>Because that process takes time, up to several days. And if it took several days for people to get money from their check no one would use it. So instead they give you the money immediately while the transaction is verified.


drafterman t1_iyeuidw wrote

The gain is people do business with you versus another bank.


AskMeAboutMyStalker t1_iyevh6q wrote

if the nextflix series about Sorokin is accurate, she was able to do alot of what she did b/c of greed on the part of the bankers & various businesses she promised business to.

she convinced them that she's extremely wealthy, her money is just tied up in (insert some foreign exchange excuse) & that once it all clears, they stand to make a lot of money from doing business with her, but if they're gonna be sticklers about it now, she'll just take her business elsewhere.

she was able to skate on that for a couple years stringing along hotels, caterers, nightclubs, bank executives, etc before it all fell apart.


TehWildMan_ t1_iyehodu wrote

Checks can't be verified in real time. That's a huge underlying issue: it can sometimes take days or weeks to realize a check is bad.


WritingTheRongs t1_iyejb8l wrote

It depends on the amount. Do you want $100, or $1000? They are much more likely to give you $100. And she was friendly and "normal" looking and was very good at not setting off people's radar apparently. But yes, you would think in the modern age the banks would have figured out a way to verify funds.


dudefranger t1_iyf6ma3 wrote

What's a check? - all over the world except the USA


Mdly68 t1_iyeqe37 wrote

Just to respond to other comments - most people rarely use checks for day to day expenses. Our paychecks are direct deposited, and we pay our bills online or though our banking app.

Checks have their weaknesses, but at least your credit card number isn't being saved or harvested online. And you can be sure banks will call out a bad check. Credit card companies won't catch fraud for you and may not believe you if you claim unauthorized charges.

Yes, in America we often have to wait 2 days for checks to clear. It's because a lot of that processing and consolidation doesn't happen until banks are closed for the day. It's a system designed before the internet existed.