SmallBizResource Blog -- Business Know-How

How To Spot Counterfeit Cashier Checks

Courtesy of Business Know-How Thursday, May 14, 2009, 12:00 PM ET

I love dumb criminal stories.

For example, I was amused by last week's story about a dim criminal who was arrested after he passed a counterfeit cashier's check to a Minnesota cell phone distributor. The distributor became suspicious after noticing that payment was made via a $2,359.45 cahier's check. Yes, the arch-criminal misspelled cashier.

Compounding his error, he provided the cell phone distributor with a phony shipping address that was, in fact, the address of the FBI office in Monroe, La. The phone company called the FBI, which, in turn, called the local police.

Incredibly, the FBI agents in Monroe saw the suspect flag down the delivery truck from their office windows. The agents went out and detained the suspect until the Monroe police arrived. The Monroe police arrested him and charged him with two acts of forgery. The police and the FBI later discovered that the suspect was a fugitive from Georgia, where he was wanted for another cashier check scheme.

Unfortunately, not all criminals are dumb, and law enforcement agencies report that counterfeit cashier check scams are on the rise. Crooks across the country are using counterfeit cashier's check to purchase merchandise, including high-end products like cars and boats.

In particular, law enforcement officers warn of scams in which a merchant receives an e-mail from a "buyer" offering to purchase his products. In many cases, the buyer states he or she is from a foreign country and intends to make payment using an "official" cashier's check drawn on a United States bank.

The buyer notes that the check is made out for an amount way above the negotiated purchase price. Often the buyer will explain the price discrepancy by stating they received the check by a third party who owed them money. The buyer asks the merchant to return the difference between the purchase price and the check. Only after the merchant wires the extra amount to the buyer does he learn from his bank that the check was counterfeit and the full amount must be returned to the bank.

Law enforcement officers say this scheme works because the counterfeit cashier's checks are difficult to detect, even by the banks that are clearing and cashing the checks. Enhanced computer technology has enabled crooks to produce very convincing counterfeit currency and checks, often using only a PC and a printer.

The U.S. Treasury Department protects paper currency with standard paper, ink, design, and security features, but each bank's cashier's checks are individually designed. Each bank uses different paper, designs, and security features, and this wide disparity appeals to crooks.

To avoid being a victim of a counterfeit cashier's check, law enforcement recommends the following steps:

• Inspect the cashier's check.
  
• Ensure the amount of the check matches in figures and words.
  
• Check to see the account number is not shiny in appearance.
  
• Be watchful that the drawer's signature is not traced.
  
• Official checks are generally perforated on at least one side.
  
• Inspect the check for additions, deletions, or other alterations.
  
• Contact the financial institution on which the check was drawn to ensure legitimacy.
  
• Obtain the bank's telephone number from a reliable source, not from the check itself.
  
• Be cautious when dealing with individuals outside of your own country.

If you suspect you have received a counterfeit cashier's check, or you are being offered one, contact your local police or call the U.S. Secret Service at (202) 406-5850. You can also file an online complaint or write to: U.S. Secret Service, Financial Crimes Division, 950 H Street, NW, Washington, D.C. 20223.

--Paul Davis is a writer who covers crime and security.

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