Check fraud by gangs is crime on the rise Counterfeit quality makes detection hard


The FBI's white-collar crimes squad is accustomed to nabbing accountants who cook their books and executives who skim from their company's accounts.

But increasingly, agents find themselves dealing with a different kind of white-collar criminal: organized gangs that see the opportunity for easy money in check fraud.

Using high-tech equipment, the gangs produce high-quality counterfeit checks that are hard for even experienced eyes to detect.

"Right now we have probably a half-dozen cases going on organized groups," said Kevin L. Perkins, supervisory special agent for the FBI white-collar crimes unit in Baltimore, which includes 10 agents and four full-time financial analysts.

"They use computers, color copiers -- they use high-tech means to do this stuff," he said. "It's amazing the things we've been able to seize with search warrants: high-tech scanners, laser printers, things like this that are the tools of the trade not only computers, we're seizing guns in these places."

The gangs tend to have a nucleus of several people who are well-educated or computer literate and use that equipment to produce counterfeit commercial checks. They often use false identification to open bank accounts to deposit the checks. And they employ dozens, and sometimes scores of people to pass the bad paper.

"They're not the typical white-collar accountant criminal," Perkins said. "We see drug gangs doing it."

The Baltimore FBI field office expanded its pursuit of check fraud schemes after recently completing a survey among law enforcement officials, bankers and the business community to determine where it should focus its resources. Financial fraud, particularly involving check schemes, ranked high, after public corruption and health care fraud.

"We found that check fraud is just eating us up in the community," Perkins said. "The banks are getting murdered."

According to the American Bankers Association, banks lost $815 million from check fraud in 1993, the latest year figures were nTC available. That compares with $65 million from bank robberies that year. Several banks, although none in Maryland, have resorted to requiring thumbprints of people who want to cash checks but aren't regular patrons.

"It is a problem. It is bad," said Marcia Goldman, a spokeswoman for Provident Bank of Maryland. "It's a constant challenge."

Supports other crime

Police are eager to crack the check fraud schemes because "the financial crime actually supports a lot of the other crime," said Sgt. Robert Derbyshire of the Baltimore County police's economic crimes unit. "It just sucks in the money. Sadly, people don't see it as a priority because they see it as a victimless crime."

Law enforcement officials with their own fraud units have recently begun collaborating with the FBI. Representatives from local, state and federal agencies began meeting monthly about three months ago to share information on cases.

Also, police fax information to other agencies when they start a new case. "We'll get a couple calls from merchants, small dollar, but we may suspect they're part of a scheme," Perkins said.

Such a collaboration resulted in 1996 arrest warrants against Daren Lee Grant, 27, of the 2600 block of E. Mura St. in East Baltimore, for allegedly passing bad checks in Baltimore, Baltimore County and Anne Arundel County.

"We're aware here of about $250,000 this guy has done alone," said Sgt. Ernest Anderson of the city police's check and fraud unit. "We were on his tail for a while. The problem was getting our hands on him."

Then this year, on March 31, Grant was charged in connection with the March 20 hijacking of an armored truck containing $470,000 from the parking lot of a Waverly McDonald's.

A scheme can be set up in several ways. A popular one involves buying something from a mail order company and overpaying by $10. The company sends back a $10 refund check -- identifying (( the name and number of its checking account.

"You know now you have an account that's fat with cash," Perkins said. "You scan that check in and instead of $10 you make it $1,000. And it clears, because the account's fat, the money's there. It's going to be deposited into your account."

To produce a bogus check, the counterfeiter merely uses a scanner to enter an image of the check into a computer, where the dollar amount can easily be modified. Printing out the modified check on a laser printer produces an almost flawless copy.

It may be weeks or months before the company reconciles the account and the fraud is detected. By that time, a good scammer has closed up shop.

That same $1,000 check can be duplicated and sold on the street for 15 percent to 30 percent of its face value.

Assuming identities

Another scheme, frighteningly simple, involves assuming someone else's identity.

"All you need is to steal somebody's mail out of their mailbox one day. You get their credit cards, you get their account number, shoot the account number to the check company. You assume their identity," Perkins said.

The indictment last month of Richard Tirrell Terry offers an example of how the scheme works.

Between August 1995 and last July, the indictment alleges that Terry began producing corporate checks. Obtaining the names, addresses, checking account numbers, account numbers and authorizing employee signatures of real businesses, he allegedly used a personal computer, a typewriter, a scanner and printer to copy the checks.

The indictment says that Terry was able to cash or deposit into his accounts 69 counterfeit checks totaling $220,569.51. In all, he opened nine accounts, four in Maryland and five in Pennsylvania and Delaware, where he used a false name, Perrie Thedan. The indictment names three unindicted co-conspirators who allegedly helped him cash the checks.

Terry, 23, of the 5100 block of Harford Road in Northeast Baltimore pleaded not guilty to the charges at a March 21 hearing.

The scams are so lucrative that drug dealers, eager for capital to fuel their trade, are involved.

"The drug gangs have found that they can make a lot of money," Perkins said. "The chances of getting caught and sent to jail for a long time are not as high as they are for a drug charge. It's safer."

Pub Date: 4/12/97

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