PROVIDENCE, R.I. (WPRI) — The former Rhode Island lawmaker accused of writing millions of dollars worth of bogus checks in a check-kiting scheme officially pleaded guilty in Federal Court Friday morning.
Former state Senator and businessman James E. Doyle, III, 46, of Pawtucket, pleaded guilty to 31 counts of bank fraud and one count each of filing a false tax return and failing to file a tax return, the U.S. Attorney’s Office confirmed.
Prosecutors said Doyle – who resigned his state Senate position in January – engaged in $74 million in worthless bank transactions executed in check-kiting schemes through bank accounts he controlled at Bristol County Savings Bank, Alliance Blackstone Valley Federal Credit Union (ABVFCU) and Santander Bank.
Prosecutors said Doyle admitted that he executed the scheme through the use of checks, cash withdrawals, ATMs, electronic transfers and ACH transfer payments.
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.
Doyle is scheduled to be sentenced Jan. 18, 2019.