PROVIDENCE, R.I. (WPRI) — A former state senator is facing more than two dozen charges in connection with a check fraud and tax evasion investigation, the Rhode Island US Attorney’s office announced Thursday afternoon.
James E. Doyle, II, 46, is charged with 31 counts of bank fraud, and one count each of filing a false tax return and failing to file a tax return.
Prosecutors said Doyle – who resigned his state Senate position in 2018 – executed a “check-kiting” scheme which defrauded three banks of between $250,000 and $550,000.
They also allege Doyle failed to report more than $1 million in income to the IRS.
According to prosecutors, “Check-kiting” consists of drawing checks on an account in one bank and depositing them in an account in a second bank when neither account has sufficient funds to cover the amounts drawn. Just before the checks are returned for payment to the first bank, the kiter covers them by depositing checks drawn on the account in the second bank. Due to the delay created by the collection of funds by one bank from the other, known as the “float” time, an artificial balance is created.
They said over the course of three years, Doyle inflated balances in checking accounts at three banks by writing tens of thousands of checks in order to obtain funds that otherwise would not be available to him.
Prosecutors said on a single day in February 2016, Doyle deposited 31 worthless checks totaling approximately $300,000 into one bank drawn from a checking account at a different bank. There were insufficient funds in the accounts to cover the checks.