Kiting

[KAI-ting]

What is the definition of Kiting?

Kiting is a fraudulent banking practice involving the issuance of checks from an account without sufficient funds, with the expectation that deposits will clear before the checks are processed. This practice exploits the float time between the check being written and its clearance. Kiting can also refer to manipulating the face value of a check or inflating stock prices through deceptive trading strategies.

Using Kiting in an Example

An individual engaged in kiting by writing several checks for large amounts between two bank accounts he owned at different banks, hoping to create a false appearance of liquidity and to temporarily use funds that were not actually available.

Using Kiting in a sentence

The bank detected suspicious activity indicating kiting when they noticed repeated large transactions between accounts just before checks were due to clear.

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