Former banker pleads guilty to $2 million check kiting scheme

A former executive at the O’Fallon, Illinois-based Bank of O’Fallon this week pleaded guilty to check kiting and investment fraud from which he gained more than $2 million and left a retired Illinois couple in financial distress.

“This former bank executive abused his position of trust and the trust of the community for personal enrichment,” said Special Agent in Charge Vincent R. Zehme, of the Federal Deposit Insurance Corporation Office of Inspector General, Chicago Region. “The FDIC OIG is pleased to join our law enforcement partners in announcing today’s guilty plea, and we remain committed to investigating and holding bank insiders who commit fraud accountable, as we seek to preserve the integrity of our Nation’s banking system and to protect depositors and financial consumers.”

The defendant, 69 year old Andrew P. Blassie, pleaded guilty to one count of bank fraud and another count of interstate transportation of funds obtained through fraud. Prosecutors say Blassie — the former Executive Vice President at the roughly $375 million Bank of O’Fallon — abused his senior position at the firm to exploit its internal systems and fund personal expenses using bogus checks and investor money, all while concealing his identity.

According to an FDIC OIG release, from September 2023 through September 2024, Blassie deposited a string of checks into his personal account at the bank, all while knowing they were backed by insufficient funds at four other accounts at three other banks and a credit union. Blassie’s actions amount to what is known as check kiting, a practice that started early in the 19th century where IOUs were issued without any collateral. Issuers could renege on the notes with little consequences, since — like a kite — the promissory notes had nothing supporting them but air. The scheme allowed Blassie to fraudulently inflate his account balance and withdraw nearly $2.7 million from the bank to pay for personal expenses.

Blassie also admitted to defrauding a retired couple from Lebanon, Illinois, after convincing them to invest $489,000 of their savings in 2022 and 2023 in exchange for two promissory notes. He promised to pay them interest on the funds and put up 128 shares of his and his wife’s stock in the bank’s holding company as collateral. After pledging the shares, however, Blassie sold most of them, used kite-sourced funds to make interest payments, and later defaulted on the loan — leaving the couple with no repayment nor any collateral.

According to court records, Blassie took deliberate steps to conceal his activity, including removing his name and account number from internal reports designed to flag suspected check kiting. Officials described his actions as a serious abuse of trust and fiduciary duty.

Blassie’s sentencing is scheduled for September 18 at 10:30 a.m. in federal court in East St. Louis, Illinois.

Check kiting — a long-established form of check fraud — has been a subject of viral online videos in 2024 as part of a viral TikTok trend, in this case targeting JPMorgan Chase. Last year, users on the app shared videos of themselves depositing similar kinds of “bad” checks at ATMs and withdrawing the funds before the checks bounced, with users dubbing the scheme as a “glitch” rather than a long-established form of fraud. Some claimed to walk away with thousands, only to later show account balances in the red by $30,000 or more.