Keeping Forgery in Check : Fraud Experts Take Aim at Bogus Bank Documents

Utilizing innovative computer technology, birth records or just a plain old copying machine, criminals are writing at least 500 million fraudulent checks every year, with banks, businesses and customers losing more than $10 billion, a company that monitors check fraud said Wednesday.

Of that amount, businesses and banks absorb about $6 billion in losses, with individuals losing the rest.

Against that backdrop, a Van Nuys document security company called Standard Register hosted a seminar Wednesday to teach workers about deterrents to the mushrooming problem of check fraud.

Representatives from Standard Register said check fraud results in higher banking charges or payroll services for customers, because the company must frequently absorb the losses that occur when a fake check makes it through.

During the seminar at the Universal City Hilton, bank officials, police bunco-forgery officers and others looked on as document security expert Frank Abagnale guided them through the intricate ways an experienced forger could make thousands of dollars through cut-and-paste methods or photocopying checks.

Abagnale, a consultant to the federal government on document security, said too often businesses concentrate their efforts on bank robbers.

“It’s amazing that we spend so much money on security cameras and armored cars and all the money is walking right out the door,” Abagnale said to the crowd of more than 100 people.

The other problem is that white-collar criminals typically only get suspended sentences or probation for their crimes, because judges opt to make space for violent criminals.

A U.S. General Accounting Office study found that in Los Angeles alone last year, 98% of all bank fraud cases that involved $100,000 or less failed to get prosecuted.

Abagnale said companies can protect themselves by doing better employee background checks, making sure more than one person has to sign a check, or by registering with an increasingly popular bank service that gives a list of checks that have been written and requires verification from the company.

Liability for the amount of the checks, which was once totally the responsibility of banks, is now falling back on individuals. Customers can be forced to pay if they were found to be negligent in leaving their account information in places or situations that would be easy prey for a check fraud expert. In addition, customers must now notify the bank in at least 30 days about a fake check or risk total liability for the theft.

Standard Register District Sales Manager Rob Gallant said check frauds range from highly structured rings to a skilled individual who waits for people to drop ATM receipts in garbage cans or use deposit slips as note pads.

Despite acknowledging that “there is not a lot you can do if someone really wants to go after you and your money,” Gallant advises customers not to put driver’s license numbers on checks or leave valuable account information lying around.