Check Fraud

Check fraud is a common criminal offense in California.  It involves using a check unlawfully to obtain or borrow funds illegally that are not available in your account. Check fraud is a big challenge facing businesses and financial institutions today as well as individuals. An individual can also have his checkbook stolen and used to draw out funds or borrow funds illegally. The owner of the stolen checkbook is accused of check fraud while in essence, they are also victims of fraud. If an individual is found guilty of check fraud, you are likely to face jail time, among other penalties. If you find yourself or a friend facing check fraud charges, consult The Los Angeles Criminal Defense Attorney, and we will tirelessly work to defend you.

Various Ways Check Fraud is Committed

• Check Kiting – this is an illegal practice where an individual benefits from afloat by making a deposit and drawing a check between various accounts at different banks.
• Paper Hanging – this occurs when an individual intentionally writes checks against a closed account that may belong to them or not. Ordering for new checkbooks against closed accounts is also categorized as a form of check fraud.
• Forgery – this, in most cases, happens when an individual in some cases, an employee gives out a check without the authorization of their boss. A criminal can also steal a check, sign it, and take it for payment or use it to pay for items while using bogus credentials.
• Counterfeiting – this happens when an individual wholly fabricates a check by use of advanced desktop publishing software or making a copy by the use of color copiers.
• Alterations – This is done by the use of solvents and chemicals like brake fluid, acetone, or bleach to erase and modify information written on the check or handwriting.

Check Fraud Laws in the State of California

Check fraud laws in California fall under PEN 476. In California, an individual commits fraud when they:

• Give out or try to give out
• Make or try to make
• Have in their possession
• Write or try to write

a forged, fake, or altered check to get cash, paying for goods or services fraudulently.

When an individual commits a check fraud, they violate the more extensive fraud offenses in California, and he or she faces punishment on forgery charges.

For the court to find you guilty of a check fraud crime, a prosecutor should prove the following truths that are also referred to as the elements of check fraud crime:

1. A person made, gave or tried to give or owned a fake or forged check
2. That the check is fictitious or is altered
3. That the defendant was aware, the check was changed or fictitious
4. The defendant had the intention to defraud another person or entity by use of the check
5. That the defendant presented the check as a genuine check

Below, we discuss the various elements of check fraud in detail.

Fictitious checks

A fraudulent or fake check is simply a check that is not authentic; it is fake. For instance, a check that is written out of an account that no longer exists or never existed in the first place is fictitious. A fraudulent check can also be drawn out of a bank that is not in existence, or the person that is deemed to have endorsed the check does not exist.

This can be done when a person comes up with checks that are computer generated and uses them to buy goods. When the shop supervisor runs the issued check, it indicates the account is closed. The manager would inform the person that drew the check and also report the matter to the police.

It is also possible the individual owned that particular account at some time, but it later got closed, and he continued to use checks from that account. This is illegal and amounts to criminal prosecutions.

Altered Checks

A check is altered when an individual adds or erases or changes part of the check that:

• Makes it seem different from the check’s original look
• The defendant changes the legal status of the check and its effect.
• A person alters a check in various ways. Some of these include:
  • Adjusting the amount. For instance, if you are issued with a $100 and you change by adding an extra zero for the check to read $1,000
  • Altering the date. If a person is issued with a post-dated check, they may decide they don’t want to wait until the appointed time. They may instead change the date to access the funds sooner.
  • Altering the payee’s name on the check
  • Altering the check number or the routing number

Intention to Defraud

Intention to defraud is when an individual purposely plans to defraud another individual of their property or money.  The law states that it does not matter if the person was defrauded or not.  However, as long as there was an intention to deceive, then that’s illegal. You would be prosecuted with check fraud if you had such plans against someone or an entity.

Presenting the Check as a Genuine one

At the center of fraud, is presenting the check as an authentic one. If as an individual, you try to use or make an altered or fake check and present it as valid, you might be convicted of a check fraud offense. Your words and actions, whether directly or indirectly mentioning a check to be genuine, is what the prosecutor will use.

Legal Defenses for Check Fraud

If you face prosecution on check fraud, there are various defenses that your lawyer will use to defend you.  A few of the commonly used legal defenses include:

The Defendant Had No Fraudulent Intention

Just like any other fraud case in California, if there was no intention to fraud, then the defendant is not guilty of fraud. For instance, if you wrote out a check to yourself of $100,000 and you were not planning to cash it, then you cannot be found guilty of a check fraud offense.

In some cases, a defendant may have passed an altered check that would be considered fake, but he or she did not know it was fake. For instance, if a person that has your money issues you a check as payment, and then you go to obtain cash against it, you can get arrested for passing a fraudulent check.

Supposing you were not responsible for making the check and did not know that it was fake, then you cannot be found guilty of check fraud.

Consent

It is also possible that the defendant did alter the check. Probably you signed another person’s name or changed the figures. However, it is likely you did this through authorization from the person with legal authority over the check. If this is the case, you cannot be guilty of check fraud.

Mistakenly Accused

This can happen when the defendant tried to give out an altered or forged check that another person had altered. If the defendant did not know that the check they tried to pass on was fake, your defense attorney would use this defense.

The individual that created and forged or changed the check is the real culprit while the holder is facing check fraud charges. With a good defense attorney, your case can be dismissed on these grounds and the right person prosecuted.

Penalties for Check Fraud Offenses

Check fraud in California is a special kind of forgery and is punishable under the California laws on forgery. Check fraud or forgery in California is a wobbler offense. The prosecutor, in this case, can opt to prosecute the case as a felony or a misdemeanor. This is dependent on the evidence and circumstances of the case and the criminal background of the defendant.

A check fraud offense is charged as a misdemeanor when these are true:

• Value of the fake check is not exceeding $950
• The defendant in the same case is not convicted of identity theft found under PEN 530

However, if this is true, considerations are made if you hold a prior conviction record for various felonies that are violent, or you are a sex offender. This is despite the defendant meeting the conditions of being prosecuted for misdemeanor charges.

Penalties for a Misdemeanor Conviction

When you are charged on a misdemeanor, and you get convicted, you might face one or both of the following:

• Expected to pay a fine not exceeding $1,000
• Can be jailed in the county jail for a period not exceeding a year

A prosecutor can also decide to charge you with a felony if:

• You have three previous forgery convictions
• The defendant has three previous petty theft convictions or bad check convictions
• If the defendant has a previous conviction for a felony that was of a violent nature

Penalties for a Felony Conviction

• You can be sentenced to 16 months, or 24 months or 36 months in a county jail
• Serve a probation term of up to three years in addition to a year in prison
• Paying of a fine not exceeding $10,000
• If the defendant only attempted and was unable to obtain any goods or money, the defendant can be sentenced to half of the full penalty. This is in accordance with PEN 664
• The defendant can be charged to attend a check diversion program instead of jail time. This is only if it is available. Where the defendant makes full restitution and completes the program, charges may be dismissed.

Can a Person be Sued in a Civil Court in Regards to Check Fraud?

According to California law, there is a provision for a civil penalty with regards to PEN 476. This is when the defendant is convicted, and it is prosecuted under the Civil Code Section 1719. However, if the payee allows the defendant to make complete restitution, the payee can decide not to sue the defendant in a civil court.

When this is allowed, the defendant is expected to pay a further $25 service fee charged on bad checks. Moreover, a $35 service fee in case of any subsequent fake checks the defendant may have issued.

If the defendant fails to do this, the payee can sue you and subject you to paying the total check amount or up to three times the check amount, or not below $100 or over $1,500.

However, for a person or entity to successfully bring a civil suit against you for check fraud, they must:

• Have issued a demand letter to the writer of the check and send it through a certified mail that comes issues a return receipt. The complainant must have kept a copy of the demand letter, and a copy of the bad check issued. If the defendant issued the bank with a letter instructing them not to pay the check, the complainant could use a copy of this letter to reinforce their case in a civil court.
• That the defendant, despite the demands, failed to pay the complainant in thirty days. Should this happen, the complainant will file a lawsuit against the defendant.
• The complainant files a suit depending on the amount that was on the bad check, and they do so in different places. These are guided by:
• If the complainant is asking for payment for not more than $10,000, they are expected to file their claims in a small claims court. If you are sued in a small claims court, you will not be allowed to have a lawyer to defend you. Small courts, in this case, are designed to resolve with speed any disputes without attracting high costs.
• If the complainant is asking for more than $10,000 in payment, they place the suit at the superior court in the civil division.

The complainant presents to the judge at the hearing a copy of the demand letter they send you alongside the certified receipt proving they mailed the letter. They also present any other documents that are related to the case, including a copy of the bad check the defendant issued.

If the court is convinced of these and finds the evidence sufficient, you will be sentenced. In most cases, the defendant is ordered to pay the complainant and can equally face jail time.

However, there are cases that the defendant wrote to the bank in good faith to stop the payments but not to defraud the complainant. With a good lawyer, the defendant should prove this and not be required to pay any damages to the complainant.

Related Check Fraud Offenses

In California, various other cases are similar and can be charged alongside check fraud offenses. Some of the crimes commonly charged alongside PEN 476 offenses are the following.

PEN 476a California’s Bad Checks Law

An individual can be accused of violating PEN 476a according to the state of California laws when he or she:

• Writes or passes a fake check
• That he or she does this with full information that the account has insufficient funds to cover the check amount
• That he or she did this intending to defraud

Specifically, the California bad checks laws are for prosecuting bad checks issued with the knowledge of insufficient funds in one’s account. While check fraud laws mainly deal with forgery, the prosecutor can prosecute you with the two offenses depending on the situation under which the crime was committed.

For instance, when a person attempts to obtain cash from a check they have written or created by using a non-existent bank; the check is fraudulent. Moreover, violates PEN 476 of the California check fraud laws. On the other hand, the bank being fictitious means that that account doesn’t exist nor are their sufficient funds to honor the check.

In such a case, the individual can face two legal violations of PEN 476 California check fraud laws and PEN 476a California’s bad checks law.

The bad checks law in California is a wobbler offense. If convicted on misdemeanor charges, the defendant faces similar penalties as a person convicted of misdemeanor check fraud. If convicted as a felony, you will similarly face the same penalties as those of a person convicted of check fraud.

Besides the discussed criminal penalties, the defendant can face a civil lawsuit initiated by the payee of the check. The payee, in this case, will be seeking to ask the court to be paid the check amount in full and any other subsequent damages that may get to $1,500.

PEN 470 California’s Forgery Law

The law on forgery is comprehensive. The law prohibits the intention to deceive when a person:

• Signs another person’s name without their authorization or using another person’s that do not exist at all on various documents
• Create a counterfeit or forge a seal belonging to another person or entity or their handwriting
• Changes, corrupt, or falsifies a deed, will or a court judgment

The primary difference between check fraud and forgery, forgery can be done on a number of documents, while check fraud is only committed on checks. This means that if alterations happened on any other document other than a check, the defendant would be charged with forgery under PEN 470.

However, in cases where an individual forges the name of someone else on the check, a prosecutor will charge you with a violation of PEN 470 or PEN 476. Should the prosecutor decide to charge you the two offenses, the law in California allows conviction and sentencing for only one of the crimes.

The penalties for forgery if convicted are similar to those of a person convicted with a check fraud offense.

PEN 487 Grand Theft Law

Theft law in California prohibits obtaining property or money from another person or entity without their authority. When the property or funds value is over $950, the crime under the laws of California is categorized as grand theft. A person is charged with grand theft if they:

• Create or issue an altered or fake check of $950 or more
• They intend to obtain products or services or even money by use of the fraudulent check

If the above is established, a prosecutor can pursue charges against you on grand theft. PEN 487 grand theft is viewed as a wobbler offense in California. This offense carries the same penalties as those of check fraud offenses.

However, when the crime amount exceeds $65,000, automatically the offense changes to a felony that is punished by having additional jail time.

Petty Theft

An individual violates the law on petty theft in California when they obtain property or money valued at below $950. When a defendant attempts to use an altered or fake check to collect goods or cash below the amount of $950, they are charged with petty theft.

The prosecutor, in some instances, can opt to prosecute you with both PEN 476 violations in addition to the check fraud charges.

Petty theft is always prosecuted as a misdemeanor. If found guilty of the offense, the defendant can face jail time of not more than six months or be expected to pay a fine of not more than $1,000.

Expungement for Check Fraud

In California, under the Realignment law, a defendant can face up to three years in jail. However, as long as you spent no time in state prison, your conviction can be expunged.

Many misdemeanors and felony convictions are eligible for expungement. PEN 476 convictions also qualify for expungement.

Finding a Los Angeles Criminal Attorney Near Me

There are many circumstances under which a person can face check fraud charges. Some may be out of a criminal intent while others can be a mistake. Regardless of the intentions behind the offense, if you are accused of a check fraud offense, you must consider hiring an experienced attorney to handle your defense. If you are in LA, consult The Los Angeles Criminal Defense Attorney to handle your case. With our years of experience and a dedicated team of lawyers, you will be in safe hands as we work towards your acquittal or having you receive a minimal sentence. Call us at 310-564-2605 today!