BREAKING NEWS - Visocan Pleads Guilty to Check Kiting

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BREAKING NEWS - Visocan Pleads Guilty to Check Kiting

HELENA, Mont. -- Just four days after telling the convenience store and petroleum marketing industry that he was resigning his position as Treasure and Chairman-elect of the National Association of Convenience Stores (NACS) "to be close to my employees," Steve Visocan yesterday pleaded guilty to federal bank fraud charges in connection with a $988,000 check-kiting scheme, according to the U.S. Department of Justice.

Visocan, president of Visocan Petroleum and its three-store Pop Inn chain, is scheduled to be sentenced Oct. 17. He could not be reached for comment. Representatives from NACS were not available for comment this morning.

According to the U.S. Attorney's office in Montana, Visocan had obtained funds totaling $988,148 when the scheme was discovered. Visocan faces maximum penalties of 30 years in prison and a $1 million fine. The case was prosecuted in federal district court in Great Falls, Mont.

The case against Visocan began two years ago when First Interstate Bank in Great Falls received a returned check drawn on a Visocan Petroleum Co. account at Mountain West Bank in Helena. The $584,000 check was signed by Visocan and payable to Big Sky Fuel supply, another company owned by Visocan, according to the Helena Independent Record.

The following day, First Interstate Bank received a second returned check for $577,000 from Mountain West Bank, also drawn on the Visocan account. The operations officer for Mountain West Bank identified the checks as part of a check-kiting scheme on June 13, 2000, after she discovered Visocan's account was overdrawn by about half a million dollars.

Visocan surprised the industry last week with his announcement that he was stepping away from his NACS leadership positions just four months before he was to be sworn in as chairman. In an emergency meeting, NACS elected Hank Armour to serve a second consecutive year as chairman.

In a letter to NACS members, Visocan said, "Retail petroleum prices in the towns where my stores are located have been significantly below rack prices for several months. Losses on petroleum sales, coupled with a recent ban on smoking in all public places in my hometown, have increased our losses to the point that I need to be closer to my employees right now."

There was no immediate word whether the government would seize Visocan's assets to cover the cost of his fines or if he intended to sell the units.

Detailed Scam
Check kiting generally involves using checks to create multiple bank accounts, without the money to cover the checks. Typically, a check is written from an account with insufficient funds, and that check is deposited to a second account, which often is at a different bank.

The deposit at the second bank is made with the hope that the amount of the check deposited will be credited to the account in the second bank before notification from the first bank that the funds are insufficient, the report said.

To ensure that the first bank doesn't see there are insufficient funds available, a check also is written against the account at the second bank and simultaneously deposited to the account at the first bank. The purpose of all this check writing is to create the impression that there are funds in the accounts, when there actually isn't enough to cover them. The size of the fraudulent insufficient funds checks typically increases over time so as to cover the total amount of all checks.