Lately, we’ve been writing about retailers and restaurateurs contending with activities impacting profits such as losses from employee fraud and theft, inefficient operations, and noncompliance with corporate policies. However, on June 23rd, 2016 a major fraud scandal hit close to home in nearby Mount Holly, New Jersey, just 15 minutes from our headquarters. This reinforced our thoughts about the universal application of our 20/20 Data AnalyticsTM platform.
The scandal that broke through, after a 2-year investigation, involved an organized sophisticated retail crime technique called ‘Check Kiting’.
Check kiting requires an individual to have an open account at two separate banks or to have one bank account and a 2nd place, such as a grocery store, where they can cash checks. Within the first account there can be a balance of any amount, for example let’s say $50 dollars, but within the second, there is nothing. This scammer will write a check from the first account and deposit it to the second account for an amount greater than their actual balance, in this example let’s say $70 dollars.