I'm certainly not arguing that the banks are innocent victims in this. It's interesting to see your take on the article (presuming, from your screen name, that you're looking at it from a CPA's perspective). Personally, my interest is in the manner in which real estate fraud is committed (and, hopefully, can be prevented).
Check kiting is as old as banking itself. It isn't hard to detect but it is hard to be the bank to stop it. The bank that stops it is guaranteed a loss. Its even possible lender banks become complicit.