Brothers Wrote Millions Of Dollars Of Bad Checks To Support Their Business
May 15, 2002 at 10:24 PM EST - Updated July 30 at 4:30 AM
CLEVELAND (AP) - Two brothers floated millions of dollars in bad checks to finance a check cashing service they ran out of several convenience stores, according to charges filed in federal court Wednesday.
An FBI affidavit alleges that Michel Abboud and his brother Elie Abboud ran a check kiting scheme in which they moved money around 13 different bank accounts to cover bad checks.
The government alleges that in one three-month period in 1999, the brothers deposited more than $300 million into the 13 accounts, but $280 million of those deposits were not covered at the time they were made.
The scheme ultimately led National City Bank to write off $1.2 million in losses related to overdrafts in the Abbouds' accounts, the affidavit states.
James Willis, defense attorney for the Abbouds, said his clients are innocent. "The bank must have had some internal problems and they are trying to shift it to these brothers," Willis said.
Willis also said the federal government has confiscated computers, files and cash from the Abbouds' stores, effectively shutting down their business although they have not been found guilty of anything.
"They put him out of business without a trial," Willis said. "If they were investigating fraud at a bank, would they take all the bank's money?"
U.S. Magistrate Judge Patricia Hemann ordered Michel Abboud to be held without bond until a detention hearing May 20.
Abboud was sentenced last year to six years in prison for kidnapping, extortion and burglary in an unrelated case. A jury concluded that Abboud hired a North Royalton police officer to help kidnap his housekeeper, whom Abboud believed was stealing from him.
Abboud has appealed his conviction. A state appeals court is scheduled to hear his case May 22.
Assistant U.S. Attorney William Edwards said the government still has search warrants out on the Abbouds. He said additional affidavits will be filed once the warrants are returned.
(Copyright 2002 by The Associated Press. All Rights Reserved.)