Floating a Deposit- Employee Theft

Many years ago it was standard practice to write a check for everything. Credit was an exception used for major purchases, or perhaps a special in- house financing in a department store. The down side to writing checks was that they took so long to process, that bad checks were an extremely prominent and an easy form of employee theft and fraud.

It was something that we always watched out for, employees who would write a bad check. There were even employees who would kite/ float checks. It was a simple process, but one that took dedication to maintain the process.

An employee would write a check and get cash. They would not have enough money in their bank account to cover the dollar amount of the check. So the cash they got from the check would get deposited into their account. Deposits would post faster than it would take the check to clear, however, they still needed to cover the bad check they had written.

They would write a second check and get cash. Then they would deposit that cash into their accounts. This cash would be enough to cover the first check, but not the second. So they would have to do it again, and again…

This would be a way to supplement their account in between paychecks. Once they had their paycheck deposited, the paycheck would cover the bad checks that had been written.

We don’t see employee theft or employee theft investigations for bad checks these days. What we do see is the same process with deposits. Cash is taken out of a deposit and cash from the next day’s deposit covers it up. They will take the money out of each deposit until they can make up the difference with their paychecks.

For more information on employee theft, employee theft investigation or internal theft contact us or call 1.770.426.0547 – Atlanta Georgia

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