Introduction
Credit card fraud and identity theft may be more pervasive than check fraud in today’s digital economy, but the penalties for check fraud are just as severe today as they were decades ago when it was the leading form of financial fraud. Whether you’re writing bad checks with insufficient funds or outright forging checks, you may be liable for criminal and civil punishment including financial restitution, incarceration, and fines.
What is Check Fraud?
Check fraud refers to faked, forged, and deceptive checks, including situations where an account holder issues a check with direct knowledge of insufficient funds. A fraudulent check may be used to finance a transaction, make a purchase, initiate a fund transfer, or obtain bank account funds. Individuals, businesses, and organizations can face criminal charges for check fraud. Some examples of check fraud include:
- Forgery – using a fake signature or fake ID to authorize a check
- Paperhanging – knowingly writing checks from an account that has been closed
- Counterfeiting – printing counterfeit checks
- Check kiting – manipulating the amount of money withdrawn using a check and multiple accounts, drawing more than what’s contained in one account
Criminal check fraud cases are often accompanied by civil actions to cover losses and legal fees. Civil cases may also take place without criminal charges, especially when the issue pertains to insufficient funds rather than forged checks.
What is the Punishment for Check Fraud in Arizona?
Arizona law defines issuing a bad check as “issuing or passing a check knowing that the person does not have sufficient funds in or on deposit with the bank or other drawee for the payment in full of the check as well as other checks outstanding at the time of issuance” (ARS 13-1807).
The defendant is presumed to have a knowledge of insufficient funds under the following two conditions:
- The issuer did not have an open account with the bank or other drawee at the time he or she issued the check
- The check was presented within 30 days of issuance, the bank or other drawee refused payment due to lack of funds, and the issuer failed to pay the check holder the full amount due (plus reasonable costs) within 12 days of receiving notice of the refusal of payment (ARS 13-1808)
The punishment for writing a bad check (i.e. check fraud) in Arizona depends on the value of the check(s). When the amount is less than $5,000, the offense is a class 1 misdemeanor carrying the following potential punishment:
When the value of the fraudulent check(s) is $5,000 or greater and the defendant has failed to repay the total amount (including 12% annual interest) within 60 days, the punishment is a class 6 felony. In Arizona, a class 6 felony carries a punishment of up to 2 years in prison.
Theft Charges in Arizona
When an individual or organization obtains property or secures performance of services by issuing or passing a bad check, the defendant may be presumed to have intent to deprive the owner of property or payment for service pursuant to ARS 13-1802. As such, the defendant may be charged with theft according to the following schedule:
- Class 2 felony – $25,000 or more in goods or services
- Class 3 felony – $4,000 to $24,999 in goods or services
- Class 4 felony – $3,000 to $3,999 in goods or services, or any case involving theft of a vehicle engine or transmission regardless of value
- Class 5 felony – $2,000 to $2,999 in goods or services
- Class 6 felony – $1,000 to $1,999 in goods or services
- Class 1 misdemeanor – less than $1,000 (excluding firearms, which carries a minimum class 6 felony)
Statute of Limitations for Check Fraud
In the state of Arizona, ARS 13-107 imposes a one-year statute of limitations for prosecuting a class 1 misdemeanor and a seven-year statute of limitations for prosecuting a class 6 felony. You may still be liable for a civil case after the applicable statute of limitations expires, but criminal charges would be rejected.
Note, however, that the statute of limitations begins when the crime is discovered — not when the crime actually occurs. You may be able to prove that the prosecuting agency should have discovered the crime sooner with reasonable due diligence, but it’ll take a good attorney and proof of negligence to succeed.
Possible Defenses
An experienced attorney with a background in criminal law and check fraud will help you craft a defense based on your unique situation. Some examples of defenses you may present include:
- Before drawing the check, the recipient knew, was expressly notified, or had reason to believe that you did not have on deposit (or credit, when applicable) sufficient funds to ensure payment on presentation
- The check was postdated, and sufficient funds were on deposit on or after the date listed on the check
- The insufficiency of funds was due to the credit institution or bank making an adjustment to your account without properly notifying you
- You stopped payment on the check before receiving a notice of insufficient funds
- You wrote the bank an insufficient money notice with a promise to repay, thereby creating a temporary credit extension
- There have been prior successful dealings between you and the payee
- You were insane or intoxicated when writing the check
- Another party’s fraudulent activity resulted in the bad check
- You were unaware that the check would not be honored
- You can demonstrate good moral character
- You quickly paid the amount in question, plus interest, upon receiving notice of the bounced check
Do You Need an Attorney for Check Fraud?
It’s always a good idea to consult with a criminal defense attorney when criminal charges are filed against you. An experienced attorney may be able to have the charges against you reduced or dropped, and can negotiate for more favorable terms on your behalf.
Civil cases involving check fraud may be handled without an attorney in small claims court. For civil cases exceeding $3,500 (the limit for small claims court), you would be wise to hire an attorney to represent you. An experienced attorney may be able to settle the case outside of court for significantly less than the claim amount, saving you time and money.
Call the JacksonWhite Criminal Law team at (480) 467-4370 to discuss your case today.