ROCHESTER, N.Y. - Katherine Mott-Formicola, a resident of Pittsford, NY, has pleaded guilty to charges of financial institution fraud and money laundering. The plea was announced by U.S. Attorney Trini E. Ross. Mott-Formicola could face up to 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Nicholas Testani provided details on the case, explaining that Mott-Formicola controlled several business entities with accounts at Five Star Bank and Kinecta Federal Credit Union. From November 2022 to March 2024, she engaged in a "check-kiting" scheme by transferring hundreds of checks between her accounts to inflate balances fraudulently.
The method involved writing checks for amounts exceeding the available balance and depositing them into other accounts she controlled before banks confirmed the availability of funds. This created an artificial increase in account balances across different institutions.
Throughout the scheme's duration, Mott-Formicola kited over 500 checks between her accounts to maintain inflated balances until detection became inevitable.
In March 2024, Kinecta refused to honor some of her over-valued checks directed toward Five Star Bank accounts. As a result, approximately $20,907,000 was charged back after being spent from those accounts without actual funds available. She used these funds for business ventures and personal purchases like real estate. Although Five Star Bank recovered some money, it incurred losses amounting to $18,979,005.79.
The investigation leading to this plea was conducted by the Federal Bureau of Investigation under Special Agent-in-Charge Matthew Miraglia's leadership; the Internal Revenue Service Criminal Investigation under Acting Executive Special Agent-in-Charge Harry Chavis; and the New York State Department of Financial Services led by Superintendent Adrienne A. Harris.
Sentencing is set for May 1, 2025 before Judge Frank P. Geraci Jr.