Lesson: Cash Fraud Schemes

In this lesson, the complexities of cash fraud schemes, particularly kiting and lapping, are explored in depth. Kiting involves taking advantage of the time it takes for checks to clear, using checks drawn on one bank account to cover insufficient funds in another account, potentially leading to fraudulent transactions. The lesson also examines the red flags that may indicate kiting, such as frequent interbank transactions without changes in the overall cash balance. Additionally, the concept of lapping is introduced, which involves using incoming payments to cover previous theft. Strategies for detecting and preventing these types of cash fraud, including mandatory vacation time for employees with access to cash, are also discussed.