New York Check Fraud Laws

Check fraud is a serious criminal offense under New York law. Specifically, check fraud is governed primarily by Article 190 of the New York Penal Law. Check fraud in New York refers to the act of knowingly issuing or passing a check while aware that there are insufficient funds to cover it in the account.

Under New York Penal Law Section 190.05, the act of check fraud is specifically termed “issuing a bad check.” The essential elements of check fraud include:

• Writing or endorsing a check
• Knowing that the account lacks sufficient funds to honor the payment
• Intending or expecting that the payment will be refused upon presentation

The offense of check fraud is classified as a Class B misdemeanor and may result in penalties such as fines or imprisonment. Additionally, under section 190.10, the law presumes knowledge of insufficient funds if the check is dishonored within 30 days.

According to New York law, check fraud not only undermines financial systems but also carries significant legal consequences, such as jail time for check fraud. Convictions for check fraud can lead to criminal records, affecting your employment opportunities and financial credibility. As such, it is crucial for individuals to understand these laws to avoid inadvertent violations. A New York fraud lawyer can answer any questions you may have.

What Are the Different Types of Check Fraud?

Check fraud in New York involves various schemes that are aimed at deceitfully gaining financial benefit through the use of checks. As far as the different types of check fraud, the following is a list of the primary types of check fraud and how they operate:

• Issuing a Bad Check: Issuing a bad check occurs when an individual knowingly writes or passes a check while aware that the account lacks sufficient funds to honor it
  • For instance, someone writes a check to a retailer, knowing that their account balance is insufficient, and the check bounces when processed
  • Under New York Penal Law § 190.05, issuing a bad check is a Class B misdemeanor, with convictions leading to fines or up to 3 months in jail
• Forgery: Forgery involves creating or altering a check to make it appear legitimate. This could include forging a signature, changing the payee’s name, or altering the check amount
  • For instance, someone steals a blank check, forges the account holder’s signature, and cashes it at a bank
  • Forgery can be prosecuted under Sections 170.10 or 170.15 of New York forgery law, and depending on the severity may result in felony charges
• Counterfeiting: Counterfeiting refers to the production of fake checks designed to mimic legitimate ones
  • For example, a person can create counterfeit payroll checks and attempt to cash them at financial institutions
  • Counterfeiting is often associated with organized schemes and can result in severe penalties, including felony charges under state and federal laws
• Check Washing: Check washing involves altering legitimate checks by erasing or modifying details like the payee name or the amount using chemicals
  • For instance, a thief steals a check from the mail, erases the original details, and writes themselves in as the payee for a larger amount
  • Check washing is considered a type of forgery and can lead to felony charges
• Paperhanging: Paperhanging occurs by writing checks from closed accounts or accounts known to lack sufficient funds
  • For instance, someone continues to issue checks from an account that they know has been closed by the bank
  • This form of check fraud may be prosecuted as theft or larceny, depending on the amount involved
• Check Kiting: Check kiting is a scheme involving multiple accounts at one or more banks where fraudsters write a check from one account and deposit it into another, creating an illusion of available funds while the check is still processing
  • For instance, writing a $5,000 check from a bank account with insufficient funds and depositing it into another account to withdraw cash before the original check clears
  • Check kiting is a felony offense that can result in severe financial penalties and imprisonment

If you should have any questions regarding the forms of check fraud above, it is recommended to set up a consultation with a New York lawyer to receive New York legal advice tailored to your specific situation.

What Are the Legal Defenses for Check Fraud?

Legal defenses for check fraud in New York will depend on the specific circumstances of the case. The following is a list of common defenses that may be raised as a legal defense for check fraud:

• Lack of Intent: A key element of check fraud is intent, as such if the defendant can demonstrate that they did not knowingly issue a bad check or commit fraud, they may avoid conviction
  • For instance, if the defendant believed there were sufficient funds in the account, this could serve as a legal defense to reduce or eliminate the charges being brought against them
• Mistake or Error: Clerical errors or banking mistakes can sometimes result in bounced checks. As such, if the defendant can prove that the issue was due to an honest mistake, they may not be held criminally liable
• Coercion or Duress: If the defendant was forced or coerced into committing check fraud under threat or harm, this could be a valid legal defense and have the charges against them dismissed
• Lack of Evidence: The prosecution must prove all elements of the crime beyond a reasonable doubt. As such, if there is insufficient evidence to establish intent or knowledge, the charges may be dismissed
• Restitution: In some cases, repaying the amount of the bad check before prosecution begins can lead to reduced charges or dismissal, depending on the circumstances of the case
• Statute of Limitations: New York law imposes time limits for prosecuting check fraud. As such, if the statute of limitations has expired, the defendant cannot be charged

What Can I Do if I Think I Have Been the Victim of Check Fraud?

If you suspect that you have been a victim of check fraud in New York, there are several steps you should take to address the situation. The first thing you should do is contact your bank or financial institution immediately to report the fraud.

Your bank can freeze your account to prevent additional unauthorized transactions and investigate the issue. Filing a police report is also recommended, as it provides an official record of the incident. When filing a report, you should be sure to include all relevant details, such as copies of the fraudulent checks and any related correspondence.

Additionally, you should also notify the payee if a fraudulent check was issued in your name so they are aware of the situation. Further, monitoring your bank accounts closely is another crucial step. You should always keep an eye out for unusual activity and consider setting up transaction alerts for added security.

Beyond all of the above immediate actions, you can also seek guidance from the New York Department of State’s Division of Consumer Protection, which offers resources for avoiding and addressing check fraud.

Further, consulting an attorney who handles fraud cases can also be beneficial, as they can help you understand your legal rights and assist you in taking further action if needed. If the fraud involves a bad check, you may also file a complaint with local authorities, such as your local County District Attorney’s Office.

In order to safeguard against future incidents, you should also practice preventive measures like using secure mailboxes, verifying checks before cashing them, and maintaining regular account monitoring. Swift action and vigilance can help you minimize the damage caused by check fraud and improve the likelihood of recovering lost funds.

Do I Need a Lawyer for an Issue Involving Check Fraud?

If you are an individual or business in New York concerned about check fraud, whether you’re a victim or are navigating issues involving checks, it is strongly recommended to consult an experienced New York fraud lawyer.

LegalMatch can assist you in connecting with an attorney who understands New York’s specific laws regarding check fraud, as well as the relevant federal regulations. A knowledgeable New York lawyer can provide tailored guidance to protect your interests, help you recover damages, and ensure compliance with the law.

Businesses and employers can also benefit from legal counsel to establish protocols that safeguard against check fraud, such as enhanced payment monitoring systems and anti-fraud measures. Attorneys can also assist in drafting clear financial policies to minimize risks and avoid legal disputes.

For individuals who have been victims of check fraud, legal representation is often essential to protect your rights. A lawyer can help you take action by reporting the fraud, recovering losses, and defending against any potential liability claims. Further, if any disputes or issues arise from check related fraud, they can also represent you at any in person proceedings.