Dart Trucking Execs Nabbed in $3.6M Check-Kiting Scam

COLUMBIANA, OH – The wheels came off a multi-million dollar fraud scheme this week as two top executives at Dart Trucking were found guilty of bank fraud. The pair orchestrated a brazen $3.6 million check-kiting operation against Huntington Bank, according to U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. This wasn’t a simple mistake; it was a calculated, years-long deception.

Timothy Kephart, 54, of Morrisdale, Penn., the chief executive officer of Dart Trucking, and Mark Michael, 55, of Clearfield, Penn., the chief financial officer, were both convicted on one count of conspiracy to commit bank fraud and one count of bank fraud. The verdict follows a trial that laid bare the complex mechanics of their scheme. Sentencing is scheduled for September 4, 2013, before U.S. District Judge Dan Aaron Polster. They face significant prison time for their greed.

The fraud spanned from October 2007 to February 2010. Prosecutors detailed how Kephart, Michael, and co-conspirator Lee Stoneburner, the president of Dart Trucking, systematically manipulated accounts at Huntington Bank in Columbiana, Ohio. Stoneburner, 44, from the Columbiana area, previously pleaded guilty to conspiring to commit bank fraud and awaits his own sentencing. The trio wasn’t just bouncing checks; they were building a house of cards on a foundation of worthless paper.

Check kiting, as described by the DOJ, involves a dizzying dance of non-sufficient funds (NSF) checks. The scheme hinged on depositing NSF checks into one account, then using another NSF check to cover the first, all while concealing the overdrafts from the bank. This created a false “float” – a temporary, illusory balance – which the defendants then used to pay bills, cover expenses, and even fund their own salaries. It was a high-stakes game of deception, and Huntington Bank was footing the bill.

Trial evidence revealed the operation was far from simple. It required meticulous, daily calculations to track the flow of NSF checks and determine which accounts needed “covering.” The officers didn’t work alone; they enlisted their clerical staff to help manage the complex web of deceit. Furthermore, the company exploited “controlled disbursement accounts” (CDA’s), which provided an extra day to post expenses, amplifying the float and extending the scheme. This wasn’t a spur-of-the-moment decision; it was a carefully planned and consistently executed operation.

The investigation was led by the Federal Bureau of Investigation, Youngstown, Ohio, and prosecuted by Assistant United States Attorneys Christian H. Stickan and Perry D. Mastrocola. This case serves as a stark reminder that financial crimes, no matter how complex, will be pursued and prosecuted to the fullest extent of the law. The Grimy Times will continue to follow this case and report on sentencing developments.