CU Seeks Recompense For Check-Kiting Scheme

- JANESVILLE, Wis. (02/20/02) - Blackhawk CU, caughtin the middle of a multi-million-dollar check-kiting scheme, hasfiled a civil suit against a local bank for stopping payments onthe worthless checks at a cost of $500,000 to the credit union. Thesuit, filed in Rock County Court, revolves around a localbusinessman Michael Emerson, who admitted to circulating more than$30 million of worthless checks between State Financial Bank andBlackhawk CU. Emerson was convicted last November on charges ofbank fraud and sentenced to $46 months in prison and $1.5 millionin restitution, the amount the credit union is believed to havelost in the scheme. However, $1 million of that was covered by thecredit union's bond insurer. Under the scheme, Emerson, 54, woulddeposit worthless checks drawn on the Hales Corner bank into hiscredit union account, then he would write checks on the creditunion and deposit them in his bank account.