In 2008, Vernier, a bookkeeper, learned a simple form of check kiting from her co-conspirator identified in court documents as the owner of three businesses.

She learned how to write checks for a value greater than the account balance from one bank account to a second bank account in order to falsely inflate the balance in the second account. Vernier would then write a check from a second account to pay a creditor. Taking advantage of the float, she would replenish the funds in the first account before the overdraft was discovered, according to court documents.

In 2010, the co-conspirator's businesses fell into financial troubles and wanted to hide his assets from creditors. One of the three businesses sold bulk fuel and the other two businesses operated service stations and convenience stores.

The co-conspirator asked Vernier to take over the businesses "assuring her that he would help her manage them properly," according to court documents. The businesses held corporate bank accounts at TruNorth Federal Credit Union in Ishpeming, Mich., and two accounts each at Peninsula Bank and River Valley Bank.

The businesses financial problems were brought about, in part, by bulk fuel deliveries that the co-conspirator arranged, resulting in substantial losses, federal prosecutors wrote in court documents.

The co-conspirator and Vernier began a more complex form of check kiting known as circular kiting through which she wrote checks from several bank accounts in order to take advantage of the float to create artificially high account balances in one or more accounts. She then wrote checks to creditor from these artificially high account balances.

Over nine months in 2012 Vernier wrote hundreds of checks that transferred or attempted to transfer $145 million among the seven bank accounts. Over the nine months from January to September, the businesses operated by Vernier and the co-conspirator generated $15 million in revenues.

In September 2012, TruNorth and the banks discovered the circular check kiting scheme. At that time, checks drawn on the accounts totaled about $5.2 million. These checks were returned.

"After all of the accounts were analyzed, the Ishpeming Community Federal Credit Union discovered that it had lost approximately $1.8 million, which is the actual loss in this case," federal prosecutors stated in court documents.

TruNorth President/CEO George W. Isola was unavailable for comment when reached by phone Monday by CU Times.

Court documents did not report whether the banks suffered financial losses.

Although Vernier faces up to five years in prison, prosecutors may recommend that her sentence be reduced because she agreed to cooperate with federal investigators in this ongoing case.

She is scheduled to be sentenced in November.