$1 million in bounced checks a lesson or two for all of us

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The arrest last week of former NBA player Antoine Walker for allegedly writing $1 million in bad checks offers two lessons worth following. And if you don't follow them at home, then at least take care in Nevada:
  1. If you mistakenly think you have enough money in your checking account to cover a check and you don't, you can go to jail. At least in Nevada.
  2. Don't write checks to cover your gambling habit. Use a debit card.
Walker is accused of bouncing 10 checks totaling $1 million between July 2008 and January 2009 at Caesars Palace, Planet Hollywood and Red Rock Resort in Las Vegas. Unpaid casino markers, or loans to gamblers, are treated as bad checks in Nevada.

Walker played golf at a celebrity golf tournament in Lake Tahoe on July 17, a day after being arrested and posting bail. He faces three felony counts of writing bad checks, with each charge carrying a possible one- to four-year prison sentence.

As Ian Ayers of the New York Times pointed out in the Freakonomics blog, prosecution is often limited to where there is proof beyond a reasonable doubt that the check writer at the time of writing never intended to pay. Simply having insufficient funds isn't enough to prosecute.

Except in Nevada, where most sins are legal.

Checking the Nevada Bad Check Law is worth your while if you're paying by check in that state and have a habit of keeping a low balance.

Beyond the regular verbage you'd expect in a law about what is intent to defraud -- drawing a check on an account that doesn't exist -- is one nugget that jumps out.

Here it is, and it must keep a lot of Nevada residents on their toes when writing checks: "If he failed to pay the holder of the bad check the full amount due plus any handling charges within five days after receiving notice that the check is dishonored."

That's the law in Nevada. You have five days to make good on a check or it can be sent to prosecutor's office as fraud. It doesn't matter if you didn't intend on only having a few dollars instead of the amount of the check in your checking account when you wrote the check, you have five days to fix it. You can go to jail.

Anyone who has ever bounced a check by mistake should be frightened of writing one in Nevada.

Six of Walker's bounced checks were made out to Caesars Palace. Why would a casino continue taking his checks if the fourth or fifth came back showing insufficient funds? Because that's how they make money and they can give the problem to county prosecutors to deal with.

But is it really fraud at the sixth bad check? Caesars must have known what was happening by then and could have stopped it by not accepting his money, or his promise to pay.

Checks should be used for everyday necessities such as the grocery store or paying the babysitter. Use a debit card if you're going to gamble.

If you still want to write checks in Nevada and have to wonder if you're committing fraud by having a low checking account, then at least learn something from Walker's situation. Spend what you have by using a debit card. It's the safest way to keep out of jail.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area. Reach him at www.AaronCrowe.net
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