Baltimore Brother Sentenced in $12.4 Million Check "Kiting" Scheme
Brian I. Satisky of Pikesville, Maryland, and Vice President of A&B Check Cashing was sentenced last week to three years imprisonment in the U.S. District Court for the District of Maryland for perpetrating a $12.4 million check kiting scheme, according to a press release by the Federal Bureau of Investigation. The Court also ordered Satisky to pay restitution totalling $12.4 million.
A&B was a money services company with 21 locations in the Baltimore, Maryland, area. Most of its customers did not have access to traditional banking, credit or loans. Satisky and his brother Alec built A&B from a shoe store which they inherited from their parents. In 2003, A&B settled a class action lawsuit alleging that one of A&B's products constituted a "payday loan" in violation of Maryland law.
Satisky was also President of the trade group, Maryland Association of Financial Service Centers, Inc., and was on the board of directors of Financial Service Centers of America (FiSCA), a national trade group representing money service businesses. He even testified before Congress on behalf of FiSCA in June 2003.
The Satisky brothers "kited" checks between two of A&B's accounts. The brothers would draw checks on accounts which they knew had insufficient funds to cover the checks, and would cross-deposit the checks, artificially inflating the balances in the accounts. They would then write checks to A&B's operating account and to vendors or creditors in excess of the amount of funds which the business actually had. During the week of October 18 - 26, 2005, alone, Brian Satisky wrote in excess of $10 million in kited checks daily to keep the scheme going. The scheme finally collapsed in June 2006. Alec Satisky committed suicide. Baltimore Country Savings Bank lost $10.6 million and Carrollton Bank lost $1.8 million as a result of the scheme.
