Check Fraud Investigations

Check Fraud Scams are Prevalent

As law enforcement officers in modern times, we should be familiar with check fraud scams and understand that they occur in all areas of the country and that they can deeply affect victims. I have worked with several victims who have, unfortunately, lost significant portions of their life savings falling victim to these check fraud con artists. There are many different avenues that fraudsters take to facilitate their crimes, but in almost every case I have worked, the suspect will take measures to ensure that they are not the ones cashing these fraudulent checks and will use seemingly innocent victims to help perpetrate the crime. Below, I will cover some of the common types of check fraud I have investigated throughout the years, and the general modus operandi (MO) of the suspect in each category.

Online Sale or Rental Scams

This form of online scam is different from traditional methods of con artists online, as the con artist uses social engineering techniques to trick a seller into believing that they are interested in a product advertised by the victim online for sale, and wish to purchase the item. Generally, the scam includes the following steps:

1. The con artist will reach out to the victim to notify the victim that they are interested in purchasing the item advertised.
2. The con artist will explain that he or she is unable to collect the item locally, or will provide some other reason why he or she needs to send a check made out to the buyer in an amount well above the asking price for the items. i.e. a check for $6,000 for an item that may only cost $4,000.
3. If successful, the con artist will fabricate a check with an account and routing numbers printed on the check from another victim’s legitimate account, the details of which have been leaked.
4. This check will be sent to the seller and the con artist will ask for the remaining amount to be wire transferred directly to their freight or shipping company, or send through some other form such as prepaid gift cards or directly to another bank account associated with the scam artist.
5. The check will initially clear and be deposited into the seller’s account, which is a false reassurance to the seller. After the fraudulent transaction is discovered from the victim’s legitimate account, it will be marked as fraudulent and the entire amount will be pulled back from the seller’s account.
6. This leaves the con artist with a $2,000 of free money, hidden behind a wire transfer, gift cards, or multiple bank account transfers. This also leaves the seller out $6,000, and with their items still up for sale.

Romance Scams

Romance scams will always be around, as there is an inherent need for human beings to feel wanted, needed, and loved. Most romance scams have several different methods of fraudulent money transfers, but when it comes to check fraud it is often facilitated through the following method:

1. A single and vulnerable male or female victim is targeted online by the con artist, and a relationship is developed online.
2. This relationship often includes a long period of rapport building and grooming, making the victim feel comfortable and as though they are actually engaged in a romantic long-distance relationship online.
3. Generally, most con artists involved in romance scams will tell their victims that they are from a foreign country, or are temporarily assigned to work outside the country to help facilitate secondary portions of their scam (wire frauds) in order to obtain the fraudulent money later.
4. The con artist will then eventually present a monetary problem to their victim, i.e. they lost their job, have been arrested, had a death in the family, etc. The victim will be asked to help, but not by sending money directly.
5. Instead, the con artist will advise the victim that they are going to add the victim as an authorized transactor to their bank account and will send them checks with their name on them. These checks will have stolen account information from other victims.
6. The romance scam victim will then be asked to write a check out to themselves in the amount needed by the suspect and have the victim wire the finds overseas to their bank account to solve their money issue.
7. Once the check clears, the victim now feels as through everything is legit, so they indeed complete the wire transfer. Afterward, the activity is marked as fraudulent and the funds are pulled from the romance scam victim’s account, and they are left out the money in the end.

Employment or Investment Scams

This process works much as you would expect, the con artist will set up a fake investment scheme advertisement for quick money online or will post a fake job listing for an at home investment career. The criminal actor will then present the tasks of laundering money as a job related task and will ask their employee to cash fraudulent checks or deposit them into fake business accounts and then wire the proceeds of the fraudulent activity outside the country or move the proceeds into cryptocurrency and send the converted proceeds to a criminal actor’s wallet, so the money can be shifted around, mixed, and moved into different wallets and forms of cryptocurrency and then eventually withdrawn by criminal actors.

All of these scams are typically facilitated by professional con artists in large groups, to help support an easy income made off of innocent victims. Additionally, the con artists are often located out of the country as there is less concern for law enforcement to successfully trace and be able to prosecute the criminal actors.

Want to Learn More?

There are several avenues to pursue learning more about financial crime, to include training classes held by agencies such as the National White Collar Crime Center at https://www.nw3c.org

I have also found that a lot can be learned from those within inside knowledge, or those close to some of the criminal actors involved in such fraud. For example, there is a YouTube content creator who discusses these types of fraudulent scam activity in detail, the channel name is “Infamous Ghost Money” and he has a video entitled, “How Fraudsters Do Check Fraud & How They Get Caught”. Take a look, there is a lot to be learned by doing our own research online:

Not an Easy Investigation

It should be noted that these cases are by no means easy, but they should be followed up on nonetheless. As there is a potential to be able to help seize fraudulent funds if caught in time, and to then return those funds to the victim as the rightful owner prior to the funds being converted to cryptocurrency or leaving the country.