Receiver appointed in multi-million-dollar check-kiting case

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A receiver has been appointed to oversee the finances of companies controlled by a local restaurateur accused of a multi-million-dollar check kiting scheme.

Five Star Bank (FSB) is suing Katherine Mott and business partner Robert Harris, along with 10 business entities. According to the complaint, one of the businesses is operated by Mott and Harris together, while the others are operated by Mott alone.

FSB claims the check kiting led to an $18.9 million loss.

FSB sought a receiver “to manage the ongoing operations of the defendant entities, investigate, and oversee their financial affairs.”

On Thursday, U.S. District Court Judge Frank P. Geraci Jr. named Mark R. Kercher, a certified public accountant, as receiver for the defendant entities.

Kercher will be paid $350 per hour for his services and $175 per hour for time spent traveling in connection with his services. The defendant entities will pay for Kercher’s services and expenses, according to the order.

Kercher “is hereby granted exclusive dominion and control over all of the financial affairs, including all cash, assets, books and records of the entity defendants.”

“The receiver is hereby authorized to take possession of the entity defendants’ existing bank or other financial accounts,” Geraci wrote.

Kercher will submit monthly reports of his activities to Geraci.

Kercher was one of two recommendations submitted by FSB attorneys. The defendants made no recommendations.