SoCal man one of four sentenced in Sacramento area ‘bust-out’ scam

(FOX40.COM) — A Southern California man has been sentenced to nearly two years in prison after an FBI investigation found he and three other Korean nationals were responsible for a “check-kiting bust out” scam that led to a loss of over $200,000 to various banks throughout the Sacramento area.

According to the Department of Justice, the schemers would get real Korean passports with new photos and fake names and use them to open bank accounts with a small amount of cash. Those accounts would stay dormant until the schemers believed the bank would allow them to deposit a check and withdraw a portion of the money before it cleared.
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This would be done by writing checks from various accounts with insufficient funds, depositing checks into the accounts initially created with the Korean passports, and then withdrawing the money before the checks cleared.

The DOJ added that the scammers would access the funds by purchasing a money order and depositing it into another bank account associated with the scheme.

According to the Department of Justice, the “bust-out” scam resulted in a loss of $273,800 to the banks. Based on additional, unsuccessful attempts to conduct the scheme, the total intended loss was $466,318.

Three other Korean nationals between the ages of 47 and 55 were previously sentenced for their connection to this scheme. Their sentences ranged from two years to seven years.

The Los Angeles man, 60, who was sentenced on Thursday received a sentence of 21 months in prison.

The Department of Justice did not specify the banks affected by the scheme, but they said that the scam was done in “the Sacramento area and elsewhere.”