U.S. Attorney Trini E. Ross | U.S. Department of Justice
Katherine Mott-Formicola, a resident of Pittsford, New York, has entered a guilty plea in a federal court to charges of financial institution fraud and money laundering. The announcement was made by U.S. Attorney Trini E. Ross. The charges carry a potential maximum sentence of 30 years in prison and a fine of up to $1 million.
Assistant U.S. Attorney Nicholas Testani, who is prosecuting the case, detailed that Mott-Formicola managed multiple business entities with accounts at Five Star Bank and Kinecta Federal Credit Union. Between late November 2022 and mid-March 2024, she executed a "check-kiting" scheme involving hundreds of checks across these accounts to falsely inflate account balances.
Mott-Formicola wrote checks exceeding available funds from one account and deposited them into another account at a different bank. This method took advantage of the time banks typically take to verify funds, temporarily inflating her account balances across various institutions.
Throughout this period, she kited over 500 checks for the purpose of maintaining inflated balances until the depositing institutions realized the originating accounts lacked sufficient funds. To sustain the scheme undetected, additional checks were kited into withdrawing accounts.
In March 2024, Kinecta Federal Credit Union dishonored her recent batch of checks directed to Five Star Bank accounts and charged back the amounts. As she had already spent approximately $20,907,000 beyond her actual balance on business ventures and personal purchases like real estate, this resulted in an overdrawn balance of about $20,907,000. Five Star Bank managed to recover some funds but still faced a loss totaling $18,979,005.79.
The investigation was conducted by the Federal Bureau of Investigation under Special Agent-in-Charge Matthew Miraglia; Internal Revenue Service Criminal Investigation led by Acting Executive Special Agent-in-Charge Harry Chavis; and the New York State Department of Financial Services headed by Superintendent Adrienne A. Harris.
Sentencing for Mott-Formicola is set for May 1, 2025, before U.S. District Judge Frank P. Geraci Jr.
