Man ordered to pay back more than $30,000 for cheque kiting scheme
Dennis Burt, owner of DLB Construction, pleaded guilty to several charges of fraud in provincial court in St. John’s Wednesday. He was given a nine-month conditional sentence with two years’ probation for defrauding TD Canada Trust out of more than $30,000 using a scheme called cheque kiting in 2009. — Photo by Rosie Gillingham/The Telegram
A St. John’s contractor involved in a convoluted chequing scheme that allowed him to defraud a bank out of more than $30,000 has been given a conditional sentence.
Dennis Burt of Portugal Cove-St. Philip’s was sentenced to nine months’ house arrest with two years’ probation in provincial court in St. John’s Wednesday.
The 55-year-old pleaded guilty to two counts of fraud over $5,000 and two counts of fraud under $5,000.
He was charged after it was discovered he had swindled TD Canada Trust out of $32,935.79 in 2009 by carrying out a scam called cheque kiting.
The process involves using two bank accounts to produce an imaginary float.
According to the facts of the case, Burt owned DLB Construction and had a personal bank account and a company account, both with the same bank.
During March and April 2009, he made more than 50 transactions between the two accounts, whereby he deposited worthless cheques from one account into the other.
While the cheques were pro-cessed by the bank, Burt transferred funds between the two accounts to falsely inflate the balances temporarily. There is brief lag between the bank’s receipt of a cheque and the actual processing of it.
That delay allowed Burt enough time to keep each account viable until the cheques cleared, which took two or three days.
The transactions were made at a number of TD Canada Trust automated teller machines in the St. John’s area.
Some of the larger cheque amounts deposited included $16,250 on May 7, 2009, and $6,000 on April 7, 2009.
TD Bank was able to recover $2,034.07.
“The whole thing undermines the confidence in the banking system,” Judge Robert Hyslop said in handing down the sentence.
“Our banking system is based on trust, and if that’s not maintained, the whole system falls apart.”
“The whole thing undermines the confidence in the banking system. Our banking system is based on trust, and if that’s not maintained, the whole system falls apart.” Judge Robert Hyslop
The sentence was in keeping with a recommendation that was agreed upon by Crown prosecutor Dana Sullivan and defence lawyer Daniel Glover.
“It was a rather complicated fraud that required a tremendous planning ability,” said Sullivan, who had to sift through 427 pages of documents for the case.
“He had to know where everything was or else the whole thing could’ve crashed.
“He was doing quite a good job with it. Luckily, TD discovered what he was doing.”
Sullivan pointed out that Burt carried out the transactions at ATMs to avoid being detected.
Glover reminded Hyslop that Burt has no prior criminal record, had a positive pre-sentence report, has no drug or alcohol problems and takes responsibility for his actions.
“He wants to get things back on track,” Glover said.
Hyslop said his only concern was that according to the pre-sentence report, Burt didn’t consider what he was doing to be criminal.
“To keep the kite flying, he may not have realized how serious it was, but what he did was wrong,” the judge said.
Nevertheless, Hyslop agreed Burt was a good candidate for a conditional sentence.
Burt has to remain in the province unless he gets permission to travel, must notify police if he moves or changes jobs, adhere to a curfew and partake in programming dealing with financial issues.
As part of his probation, Burt — who declared bankruptcy earlier this year — must pay $30,901,72 in restitution to the bank at a rate of $250 per month.
It will take him 10 years and four months to repay the money.