Indiana-based S&T Bancorp and its subsidiary, S&T Bank, have filed formal notice with the U.S. Securities and Exchange Commission in which the bank says it may have been victimized by a business customer, with losses that could total tens of millions of dollars.
S&T says the customer, which it does not name in the filing, used a “check kiting” scheme which resulted in returned deposits totaling about $59 million. Check kiting relies on a bank taking several days to determine that a check was written on insufficient funds, while the customer has access to the funds the next business day. It can involve one bank or multiple banks.