The Float Between Banks

The president of a small Louisiana bank opened an account at another bank with about $4,650. The next day he wrote a $58,500 cheque on that account and deposited it at his own bank, then wrote a $60,000 cheque on that account and deposited it back at the second bank, using the days it took cheques to clear to create funds that did not exist. A later $65,000 cheque on a third bank, where he had about $1,200, was refused, and he settled up with a money order from mortgage proceeds. He was charged under a federal law punishing anyone who makes a false statement to influence a federally insured bank. The defence argued that a cheque, even a bad one, is not a statement at all.