CSUN Foundation Victim of Fraud : Crime: Sophisticated counterfeit ring is behind passing of more than $100,000 in bad payroll checks, police say. Some arrests are made.

More than $100,000 in fraudulent payroll checks from the CSUN Foundation have been passed since early June, making it the latest victim of a sophisticated ring of thieves that counterfeits checks and saturates Southern California with them, authorities said Thursday.

The checks have been passed this month primarily at small businesses and shopping markets in numerous cities in Los Angeles and Orange counties. Police have made a few arrests but concede that it is unlikely the ringleaders behind the scam will ever be caught.

The foundation is not responsible for the losses. Those will be incurred by the businesses that accepted the checks, most of which were for amounts between $300 and $400. Meanwhile, foundation controller Don Miller said the foundation is taking steps to stem the flood of “bad paper” and losses to businesses.

“There is still probably some paper out there in the system,” he said. “We have had to close our account and get new checks with new account numbers.”

As recently as Wednesday, the foundation’s bank was still receiving counterfeit checks that had been cashed. About 325 were cashed in June.

Forgery investigators said the ring may have managed the expensive fraud after obtaining only one foundation check. In most cases, the check used in the fraud is either stolen or bought from a check cashing location or an employee, said South Gate police Detective Terry McWeeney, who has made arrests in the CSUN Foundation case.

From there, McWeeney said, the legitimate check is often taken to Mexico where it is copied and distributed to sellers. These lower members of the ring then take the copies back to California and hire primarily illegal aliens and people with low incomes to cash them, he said. Complete sets of identification are often supplied to those who cash the checks.

In the CSUN case, there have been a few arrests of people attempting to cash the counterfeit checks. Two weeks ago, South Gate police conducted a sting operation in which a man selling the counterfeit checks was arrested. But McWeeney said the ring leaders have so far slipped away.

“These people are too far up the ladder,” he said. “The people we arrest never roll over on them.”