MN Biz Owner, “Check-Kiter” Sentenced to 3.5 Yrs.
George Wintz, a local businessman and a former customer of failed St. Paul-based Pinehurst Bank, was sentenced Thursday to three-and-a-half years in prison for his role in a $1.9 million bank fraud scheme, according to media reports.
Wintz was charged in June 2011 along with John Markert, former Pinehurst president, and Gregory Pederson, the bank’s former chief credit officer and senior vice president. In April, Markert was found guilty on five counts of misapplication of bank funds, while Pederson was acquitted of each count that he faced.
Wintz, meanwhile, was found guilty of two counts of bank fraud and one count of theft from an employee benefit plan, but he was found not guilty of helping Markert misapply funds. Markert will reportedly be sentenced on Friday.
Prosecutors accused the three men of operating a “check-kiting” scheme involving $1.9 million in overdrafts. Check kiting refers to a process of floating checks between accounts to create the illusion of having a balance from which money can be withdrawn; an individual writes a check for a value greater than his or her account balance at one bank and then writes another check from a different bank to cover the first over-drawn account—essentially taking advantage of the time it takes a check to clear.
Wintz allegedly kited increasingly large sums between Pinehurst Bank and a second bank until the second bank discovered his insufficient funds and returned more than $1.8 million in bad checks to Pinehurst Bank. Wintz was also accused of embezzling more than $160,000 from his company's 401(k) plan.
According to a report by the Pioneer Press, Wintz owns Northeast Minneapolis warehouse and trucking company Triangle Warehouse.
Wintz’s attorney, Andrew Luger, argued for an alternative sentence that would have allowed him to avoid prison and continue growing his business, the Star Tribune reported. Wintz participated in the embezzlement scheme not for personal gain, but in an effort to save his business, Luger reportedly said.
While sentencing guidelines could have resulted in a harsher sentence, U.S. District Judge Ann Montgomery imposed a shorter term because of Wintz’s age (73) and “in recognition of his lifetime of industriousness in running legitimate businesses,” the Star Tribune reported.