This media release contains a lot of detail regarding the use of mobile banking applications by scammers to commit fraud involving a business in Prescott. The bottom line is, PROTECT YOUR BANKING RECORDS/IDENTITY WHENEVER POSSIBLE. For example, fully shred checks after a mobile deposit, destroy/shred photo copies of checks provided in receipt when using bank ATMs, never share banking information unless you have verified the authenticity of the receiver i.e., scam emails requesting account checkups, shred any paper work showing bank account information/check photocopies, and routinely monitor your credit report/financial accounts for discrepancies/alerts.
Background - Earlier this year, YCSO deputies met with the owner of a Prescott area business who reported that unknown suspects fraudulently deposited more than 40 company checks into several banks across the country. A majority of the deposits were made using mobile bank deposit applications involving several thousand dollars. A review of the fraudulent checks provided by the victim’s bank showed they were hand written with the victim’s/ business owner’s signature forged. The victim noted that none of the company checks were missing from the business check ledger.
The case was turned over to a fraud specialist detective in the Sheriff’s Criminal Investigations Bureau. After conferring with bank investigators, it was determined there was actually a total of 52 fraudulent checks negotiated at financial institutions throughout the US in excess of $200,000. A review revealed 6 checks totaling more than $12,000 were returned against the account for a loss, but fortunately the victim’s bank has since refunded the money. Detectives also found a fraudulent payroll check deposited into the account of an apparent legitimate banking customer in Yuma, Arizona. Additionally, Detectives traced a check in the amount of $128,000 to a business on the east coast. The check had been deposited but eventually bounced due to insufficient funds. Fortunately, the business did not attempt to access the funds.
Regarding the payroll check deposited in a Yuma bank – The original/valid check was deposited into a Prescott Valley bank in 2016. Detectives attempted to trace the legitimate check through the banking system, but could not link a suspect to the check. Detectives did learn such checks are handled by several bank employees, stored for a period of time at a location out of state and then destroyed. This timeline indicates ample opportunity for someone to copy the check for fraudulent purposes although there was no evidence at the time this had occurred.
Detectives met with account holder in Yuma who was documented depositing a fraudulent version of the payroll check into her account along with other suspicious transactions. During the discussion, she admitted an online relationship with a man on a dating website who convinced her to allow him access to her mobile banking account. The man would then deposit checks, instruct her to withdraw a portion of the money and send it to specific locations overseas. She was allowed to keep a portion of the money as payment and admitted the process was ‘weird,’ but did not think it was illegal. Detectives are attempting to identify the suspect from the dating site.
Detectives have spent numerous hours tracing fraudulent checks associated with victim’s bank account to various persons/places around the country.
At this point in the investigation, it is unknown where and by whom the first check from the Prescott victim was fraudulently altered. This could have occurred in Yavapai County or another part of the country. The concern in this type of electronic fraud is that a single check was most likely obtained, altered by unsophisticated means, and accepted at numerous bank branches through in person and mobile deposits before the account could be closed. Even though a majority of the checks were not negotiated because the victim’s account had been closed, there was an initial loss of approximately $12,000.00 pending compensation by the victim’s bank.
The difficulty for the detectives handling these cases are the delays/roadblocks resulting from banking officials prevented from sharing critical information without court orders in a timely manner. Detectives also continue to seek cooperation from our federal partners in an attempt to expedite the recovery of records and track leads throughout the country through the involved federally insured banks.
Detectives provided an overview of the ways suspects have used electronic banking to commit fraud –
- The suspect falsely represents himself/herself as an owner of a business in a different country and needs someone to open a bank account in the "states" (U.S.A.). The person tells the account holder they cannot open an account in the U.S. because they are overseas. They tell the account holder that if they will deposit checks into their account, they will receive a small portion of the proceeds. The suspect typically will brag about their business and make the account holder feel they are contributing to the businesses success. With the use of computers, it is relatively easy to duplicate the signatures of accounts holders from check copies.
- The suspect will meet vulnerable woman/men on social media dating sites and tell them they are worth a lot of money. They will communicate intimately with the person and make them feel wanted and loved. The suspect will then tell the person they need them to open a bank account so they can deposit checks. Once the person opens the bank account, the suspect will ask for the account number so they can deposit the fraudulent checks themselves. The suspect will then deposit the fraudulent checks into the bank account and withdraw it by sending the money via a wire transfer or by other means. Alternatively, the suspect may ask the account holder to withdraw the money and send it by money card or another form of payment to a fictitious account the suspect has access to.
- The suspect will contact someone, usually by telephone, and tell them they won the lottery or a tangible high priced item. The suspect will tell the person in order to receive the money or item, he/she needs to deposit checks they are sent by the suspect into their personal bank account, withdraw the funds in the form of U.S. currency, and then deposit the U.S. currency into an account the suspect gives them. Many times these fraudulent checks the person deposits into their accounts bounce because the account is closed and the bank deducts the U.S. currency from the person's savings or checking account to cover the bounced/fraudulent check. They typically don't know the checks bounce until they are notified by the bank they have "insufficient funds" to cover the withdrawal.
Citizens can contact the Yavapai County Sheriff’s Office with information or questions at 928-771-3260 or the YCSO website: www.ycsoaz.gov