Schakowsky’s Husband Indicted

I ask this not in cynicism but in earnest confusion:

How does bouncing checks help you use money you don’t have?

If you write a $1 million check, I don’t believe that a second bank would let you have access to that money without verifying with your first bank that your account could cover it. My bank doesn’t let me have immediate access to funds from checks made out to my business, and they’re only for amounts up to $150 at max.

Was the first bank honoring the check because he had overdraft insurance?? Yeah, right. For $1M.

It makes no sense. When I hear of people uses a circular round of credit cards to keep from paying interest on debts, at least I can understand that it could actually happen.

But if a bank is letting $1M checks run without verifying that there are sufficient funds, they’re defrauding themselves. I could see Creamer f-ing up and writing a large check that I didn’t quite have the funds to cover. I can’t believe he would do this intentionally, counting on the bank not to look into the balance at the other institution for a check that large. This sounds more like disastrous accounting than fraud.

But what do I know. Somebody explain it to me.

The theory–and whether it is true has to be proven by prosecutors–is that he was essentially loaning himself money by transfering money between counts. Inbetween being credited he’d send out another transfer so the money never settled anywhere. So he was using money he didn’t have to pay expenses–it is essentially a simple form of a pyramid.

And hey Ralph, glad to see you. You may be right here.