Thousands May Have Been Bilked : 3 Arrested in Check Counterfeiting Ring

Police have arrested three Los Angeles men suspected of being members of a sophisticated counterfeiting ring that used discarded checks gathered from at least three major banks to make bogus checks and phony driver licenses.

Law enforcement officials said Wednesday that Huntington Beach check customers alone have lost at least $750,000, and that the ring may have victimized “potentially thousands” of bank customers throughout the state.

Huntington Beach and Los Angeles police detectives said the exact number of victims has yet to be determined, but documents such as loan applications, signature cards and personal checks that apparently were discarded by First Interstate Bank, Wells Fargo Bank and Security Pacific National Bank were part of a bonanza of evidence officers used to break open the case.

There are at least 30 bank customers in Huntington Beach whose deposit slips, checks or other banking documents were found in a truck linked to the three suspects, Huntington Beach Police Sgt. Jeff Cope said. Los Angeles Police Detective Richard Mulligan said that he and his partner have at least 100 separate crime reports involving three major banks, “and that’s just (in the city of) Los Angeles.”

Arrested June 25

Bank officials Wednesday had no comment on the matter.

The three men were arrested June 25 based on information obtained nine days earlier in connection with a hit-and-run accident in Huntington Beach, police said. They were identified as Peter Cockshutte Jr., 26; James M. Manocheo, 23, and Robert L. Lukas, 38, all of Los Angeles.

They have been charged with multiple counts of forgery, counterfeiting of state documents, and a variety of unrelated lesser charges from other jurisdictions, Cope said. Both Cockshutte, who was being held in lieu of $400,000 bail, and Manocheo, who was being held in lieu of $100,000 bail, are in custody at the Los Angeles County Jail. Lukas’ bail was set at $10,000 and it was not immediately known whether he remained in custody, Cope said.

Cockshutte “was the main player as far as we’re concerned,” Cope said.

The three men were believed to be part of a much larger band of counterfeiters who have been working throughout California and in Las Vegas since last year, detectives for both departments said.

Saying that their investigations are “in the infant stages,” police noted that there are thousands of confiscated bogus bank documents--from cashier and payroll checks to checks bearing Orange and Los Angeles county seals--for which investigators have been unable to locate potential victims.

“Some people may never know they lost $100 here, $50 there,” Cope said Wednesday. “The bank wouldn’t catch it because they don’t do signature checks on that small of an amount. How many people do you know personally who balance their checkbook every month?”

Cope said at least $750,000 in losses have occurred in Huntington Beach. “And we expect it to go a lot higher. It’s a statewide ring that has gone all the way from San Francisco down the coast through Los Angeles, down to Orange County, San Diego” and Las Vegas.

While Los Angeles police detectives in the San Fernando Valley said Wednesday that they have been investigating the counterfeiting ring since December, it was Huntington Beach officers who broke the case open. And that happened by coincidence.

Late on the afternoon of June 16, a 1979 Chevrolet camper truck smashed into a car at the corner of Beach Boulevard and Yorktown Avenue. Cope said that the driver of the car later told police he had seen two men in the truck, and one of them used what turned out to be a counterfeit driver license to identify himself before the pair bolted from the accident scene and abandoned the truck. Detectives later traced the truck to Cockshutte.

A traffic officer arrived to investigate the accident, and, looking for some way to identify the hit-and-run driver, opened the back of the camper. Initially the motor officer suspected the “vast amount of stuff in there” was stolen property and had the truck impounded, Cope said.

Suspicious Materials

The next day, detectives examined a bevy of “copying materials and phony IDs, copy machines, photocopiers, computers,” Cope said. Suspecting that the gear was part of a counterfeiting operation, detectives obtained a search warrant to collect the items from the truck.

On June 25, based on information found in the truck, Los Angeles detectives arrested the three suspects at an undisclosed site in Simi Valley.

“These people have been going around the banks, going through the trash, getting account numbers and names off of documents, going through a series of photocopying processes, creating counterfeit checks, and then counterfeit driver’s licenses” bearing the information from the checks--addresses, names, account numbers, Cope said.

Counterfeiters then would cash the bogus checks at a bank branch other than the one where the check owner’s signature card was on file. The counterfeiters could determine this by looking at the first digits of the account numbers on the check, police said.

The largest single check Huntington Beach detectives have is a cashier’s check for $111,000. “That’s one of the victims we have only a name for, no address or phone number,” Cope said.

So proficient were the counterfeiters that in some cases officers could not distinguish a real check from a phony one, Cope said.

“Most of these checks were for $500 to $900, like a payroll check,” said Mulligan of the Los Angeles Police Department.

While banks are probably the biggest financial victims, Mulligan said, “the Joe Citizens are the victims in that they have to go through the pain and suffering and inconvenience of bouncing checks, and then go to court. Sometimes they end up waiting too long and they . . . just lose the money.”