Prominent Car Dealer Charged In Multi-Million-Dollar Check Kiting Scheme
ROSEBURG, Ore. – David Gilbert, prominent owner of a local Honda dealership, on Thursday was indicated by a federal grand jury on a check-kiting scheme that may have passed as much as $20 million between his account at Northwest Community CU and PrmeierWest Bank.
Gilbert, who owns Horizon Honda, allegedly had cash flow problems that led to accounts being overdrawn and efforts to artificially inflate the balances in his accounts.
“Almost every workday morning,” according to the indictment, obtained by Credit Union Journal, “Gilbert met with his bookkeeper to discuss the account balances of the checking accounts at [the bank and credit union].”
The grand jury alleges Gilbert kited more than 500 checks, totaling more than $19 million, between Dec. 1 and Dec. 8, 2008.
Gilbert knew the bank and credit union would “provide him with instant credit for the deposited checks when, in reality, many of the deposited checks were worthless because there were no legitimate funds in the accounts from which the deposited checks were written,” according to the indictment.
The two institutions figured out the scheme in December 2008 and the scheme collapsed, causing both substantial losses, according to the indictment.