How to Fly a Kite

"Extraordinary talent and initiative," said the citation two years ago, and all Fort Worth beamed with pride. As the city's "Outstanding Young Man of 1955," Jack Donald Hubbard, then 35, was the kind of bigger-than-life operator that Texans instantly recognize and dearly love. Starting as a teen-age bank runner, he had become president of the Bank of Commerce, a church elder, a United Fund official, district chairman of the Boy Scouts and of a Savings Bond drive. Last week Fort Worth learned just how extraordinary Jack Hubbard's talents were. A federal grand jury indicted him on charges of willful misapplication of bank funds, false entry, conspiracy to violate national banking laws, misuse of mails and interstate telegraph wires. Possible loss to seven banks, including Fort Worth's suburban River Oaks State Bank, of which Hubbard became president last year: $986,203.14.

The losses came from what the grand jury termed a gigantic check-kiting operation; as outlined, it called for the nerve of a pickpocket and the timing of a trapeze artist. One of the oldest and trickiest to work of all bank schemes, check kiting consists of covering one bad check with another bad check. The operator draws funds from Bank A on a phony check written on Bank B; then another phony check is written for deposit in Bank B to cover the original check. In the interval before the checks clear, the check kiter gets a fat bankroll. But to elude detection, the kiter must always beat the outstanding bad check to the bank and make it good with another bad one. It also helps to have a top bank officer in on the deal to hold off bad checks if the timing misfires, and to initial big checks for immediate payment.

As president of River Oaks. Banker Hubbard was in perfect position to make the dodge pay off indefinitely. But a suspicious officer of another bank boggled at several cashier's checks drawn on River Oaks State last fall, and he tipped the state bank examiner, who started investigating. In short order Hubbard resigned and River Oaks State Bank closed. The FBI was brought in, spent ten months tracking down thousands of checks written on 47 accounts in twelve banks and cashed as far away as Wichita, Kans. On their evidence, the grand jury cracked down. U.S. District Attorney Heard Floore said that Hubbard and four others had cashed more than $10 million in rubber checks from June of 1956 (when Hubbard left the Bank of Commerce and bought into River Oaks) until last October.

At week's end Fort Worth's outstanding young man was free on $11,000 bond, working as an office-supply salesman and awaiting trial.

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