Woman Pleads Not Guilty To Bank Fraud

January 26, 1992|By Michael James | Michael James,Staff writer

A Columbia woman accused of stealing $93,000 from a local bank through a check-kiting scheme pleaded not guilty Friday to federal chargesthat her lawyer called "excessive and unusually severe."

Lavida B. Smith, 40, an employee of the Howard County Department of Finance, entered her plea before U.S. Magistrate Paul M. Rosenberg in federal court in Baltimore.

Smith's attorney, Samuel Hamilton of Silver Spring, said after the arraignment hearing that the criminal bank-fraud charges against Smith are not warranted and should be dropped.

"This is a case that is more civil in nature than criminal, and I don't think it's servingany purpose to treat her as a criminal," Hamilton said. "A civil case would be sufficient."

The criminal penalties for bank fraud are a $10,000 fine and up to five years in jail. Smith has been charged with four separate counts in connection with an alleged scheme that FBI investigators say she carried out over a six-year period.

Duringthat time, she visited Citizens Bank of Maryland in Ellicott City nearly every business day and purchased money orders and treasurer's checks with bad checks drawn off her personal Bank of Baltimore account, investigators said.

She would then cash the money orders and treasurer's checks and deposit them in her checking account, enabling the bad check to clear.

Her Bank of Baltimore checking account, according to an FBI indictment, never contained more than $100 of her ownmoney. Citizens Bank honored Smith's checks as good money on the dayshe presented them, FBI officials said.

In the three to five daysit would take for the Bank of Baltimore check to clear, Smith would allegedly cash two or three other Bank of Baltimore checks at Citizens.

Over a six-year period, the process was repeated more than 1,000 times and amounted to in excess of $93,000 in Smith's Bank of Baltimore account, authorities said. None of the money has been recovered,they said.

Hamilton said he did not feel the offense outlined in the FBI indictment should subject Smith to jail time and instead would seek a fine or some other monetary restitution.

Rosenberg granted a request by Smith to ease the conditions of her pretrial supervision, which originally prohibited her from leaving Maryland. Under the new court order, Smith will be allowed to travel to Washington and northern Virginia, where she said she conducts personal business.

Smith has been employed for 10 years as an administrative aide in the county Finance Department. Cecil Bray, the county's deputy chief administrator, said Smith has been on personal leave since her arrest Jan.13.

County officials say that they do not believe county money was used in the check-kiting scheme, but an audit is under way to verify that no money was taken, said County Executive Charles I. Ecker.

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