Plainville man convicted of $10 million check-kiting scheme
(The following story appeared online at WIBW.com and was written by Digital Producer Sarah Motter.)
A Plainville man will face the penalty of a check-kiting scheme which resulted in the loss of $10 million from the banking system after his conviction.
The U.S. Attorney’s Office for the District of Kansas says a federal jury convicted Tyler Gillum, 51, of Plainville, on 31 counts of bank fraud, one count of making a false statement in connection with a Small Business Administration guaranteed loan and one count of making a false statement in a loan or credit card application on Friday, April 22.
Court documents and evidence at trial indicate Gillum owned and operated Plainville Livestock Commission Inc. from 2006 until 2019. Between January 2015
Between January 2015 and August 2017, court records note that Gillum wrote checks and made wire transfers between various accounts under his control at different banks in a scheme commonly known as “check kiting.” This happens when checks are continuously written back and forth to fraudulently inflate account balances, tricking banks into honoring checks written with insufficient funds.
The Office said Gillum’s scheme resulted in the loss of over $10 million to the banking system.
“Because of the defendant’s crimes, banks suffered millions of dollars in losses. These fraudulent acts should be of concern to everyone because the stability of our nation’s banking system is vital to the financial health of this country,” said U.S. Attorney Duston Slinkard, District of Kansas.
Court records also show Gillum applies for and obtained a $1.5 million loan which was secured by the U.S. Small Business Administration and a $500K line of credit from Almena State Bank, which has since failed and been closed by the Kansas Office of the State Bank Commissioner. While he did this, he hid that he previously signed an approximately $6.1 million promissory note to TBK Bank of Dallas in Texas.
