Luis G. Rogers, 71, of Beverly, is charged by complaint with one count of bank fraud for allegedly orchestrating a large scale check-kiting scheme.
Check-kitting is a scheme in which a person creates artificial balances in their bank accounts, causing checks to be written against the accounts knowing the money was not there to cover them.
Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly. He was also the principal of several other business entities (the LGR Entities).
From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks, according to the complaint.
Those banks included Liberty Bell Bank, Roma Financial, and Susquehanna Bank.
Rogers allegedly deposited checks into other accounts he controlled to artificially inflate the balances of those accounts.
Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues.
In April of last year, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts.
This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses.
Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.
The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine.