Co-op / Condo Bank Accounts Victims of Low-Tech Scam

Veteran manager Howard Kupferberg of LCC Realty in Rockville Centre, Long Island, who handles a number of tony buildings in New York City, got a call in early February that was both welcome and frustrating: A bank teller at Chase's Pelham Parkway branch had had a hunch something was odd when a woman tried to cash a $914.58 check from one of his buildings.

Why the worry? After all, it was a relatively small amount, and specific enough to look like a genuine vendor payment. But, says Kupferberg, "The check-number sequence was off by a couple hundred digits. I may only write 10 checks a month on that account," and the sharp-eyed teller noticed a big gap from the building's previous check. This new check, in fact, was a fake. The teller confiscated it — and the woman who tried to cash it ran off.

You'd think such a close call would have made the thief – or, as it turned out, thieves — nervous about trying again. But the same day, someone tried to cash a similar fake check for $1,218.93. And the next day, someone presented a fake check for $1,437.52.

Those two thieves weren't so lucky. "They caught one in the bank and arrested him, and he supposedly is going to give up some information" in order to make a deal with the courts for leniency, Kupferberg says. "The second one they found because the cops got there real quickly." The female suspect had gotten nervous and left the bank, "but the police took one of the tellers with them in the car and found her in the neighborhood."

How It Works

The thieves' method is simplicity itself. Someone with access to a check — a vendor, an employee, a friend or relative of same, or even a larcenous board member — will scan it into a computer and change the check number and date. Everything else stays intact — routing number, account number, the payer's signature(s) — and the thief changes the "pay to" name to his or her own or, more likely, a made-up name or company for which a fake ID can be shown.

When they print out the check, it'll be on a different stock of paper than the real checks, and without watermarking and other built-in fraud protection. But the thieves know that in a big city and a busy bank, a teller can't know every customer's check style. Jokes Kupferberg, "In Bozeman, Montana, this wouldn't happen, since there are only 11 checks cashed a day and everybody knows everybody."

Kuperferg has long used checks with watermarking and other fraud protection. But to help circumvent low-tech fraud, he suggests putting a low cap on the amount that someone can cash, as opposed to deposit. "I'll be setting up a $500 maximum on check cashing," he says, figuring that thieves "are not going to come in and scam a check for $238 dollars. That'd be like counterfeiting one-dollar bills."

In virtually all cases, of course, your bank accounts are insured. But nothing insures against the sheer aggravation and time involved.

"Last year this happened to me on three accounts," Kupferberg recalls, "with nobody getting caught and about $12,000 involved. The checks all got through." And while the bank in that case, Capital One, reimbursed the accounts, "it took months," he says. "I had to make five trips to the bank and spend endless hours filling out paperwork, meeting with the local police department and calling the FBI." The Chase Pelham Parkway and Pelham Bay branches, conversely, handled things quickly and conveniently, he says.

That's good because, unfortunately, when low-tech thievery and small amounts are involved, the FBI probably won't be. With last year's cases, says Kupferberg, "I begged the banks to look at the surveillance video and run it through facial recognition, but they wouldn't. I called the FBI, and the agent was sympathetic but said he didn't have the resources."

So go ahead and lower the limit — and when thieves take advantage, lower the hammer.

Photo collage by Frank Lovece