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Entries in Check Fraud (2)

Tuesday
Mar272012

Check Fraud Declining, But Debit Card Crimes on the Rise

Hemera/Thinkstock(NEW YORK) -- During a year that saw a record rise in financial crime reports, one scam that has plagued banks and consumers for decades is fading away: check fraud.

Reports of suspected counterfeiting, check fraud and check kiting were among the financial crimes that saw declines during 2011, dropping 7.5 percent from 2010.  The drop in check fraud came as the Financial Crime Enforcement Network (FinCEN) had a record number of suspicious activity reports (SARs) in 2011 throughout the financial industry.

The number of check-related suspected crimes peaked in 2008, with banks sending 152,874 suspicious activity reports to FinCEN.  From there, the cases are investigated by federal, state or local authorities, depending on the amount of money involved in the crime.

Since 2008, the number of check-related crimes has dropped to 107,041.  The drop in check fraud numbers points to a trend many Americans are familiar with -- the slow disappearance of checks.

The use of checks as a form of payment has been declining in recent years.  Personal check use has dropped by 12 percent among consumers between 2008 and 2010, according to the American Bankers Association (ABA).

In dollar amounts, check fraud losses have declined from $1.02 billion in 2008 to $893 million in 2010, according to data from the ABA's 2011 Deposit Account Fraud Survey Report.

Meanwhile, the use of debit cards has increased, and with it, debit card-related crime.

From 2006 to 2009, the use of debit cards as a form of payment rose 14 percent among Americans, while debit card crimes rose 41 percent, according to data from the Federal Reserve and FinCEN.

The number of suspected debit card frauds each year is still significantly lower than suspected check crimes, with total debit card fraud accounting for just 6,258 suspicious activity reports from banks in 2011 -- the highest number of debit crimes ever reported. 

Copyright 2012 ABC News Radio

Tuesday
Dec132011

$285K Forged Check Funded Friends' Shopping Spree, DA Says

Orange County Police(NEWPORT BEACH, Calif.) -- A California paralegal and her elementary school teacher roommate are accused of stealing and forging a check for more than $285,000 that they then allegedly used on a cross-country flight on a private jet, multiple hotel rooms and a shopping spree at Tiffany & Co. and Montblanc.

“We see a lot of high-dollar fraud cases where the defendant spends money on luxury items like homes and cars,” Orange County District Attorney’s Office spokeswoman Farrah Emami said. “This case is quite unusual because they rented a private jet to New York City.”

Alexa Johzen Polar, 34, a paralegal, and elementary school teacher Robin Antonella Pabello, 33, both of Garden Grove, Calif., pleaded not guilty Monday to charges of stealing a check from a law firm in Newport Beach, Calif., and changing the value to more than $285,000.

Polar and Pabello allegedly stole a check for more than $19,500 that was made out to the Newport Beach, Calif., law firm where Polar worked, allegedly removed the payee’s name and the amount on the check, and remade the check to more than $285,000 payable to Pabello, prosecutors said.

They allegedly used an ATM to deposit the check into a bank account jointly held by the two roommates and used the money to charter a private jet to New York City, where they rented five rooms in the Marriott Times Square hotel, and went on a shopping spree for luxury items at Tiffany & Co. and Montblanc, according to prosecutors.

Their vacation was cut short and the women had to fly back coach when the issuing bank rejected the check that the receiving bank had processed. It was during that time the banks discovered there had been alleged fraud, which they reported to the Cypress Police Department.

Prosecutors said that Polar and Pabello’s dreams for an extravagant lifestyle didn’t stop with the jaunt to New York City. The two roommates are also accused of getting $100,000 and $33,000 cashier’s checks from fraudulently obtained funds to put a down payment on a $3.7 million house in Murietta, Calif.

Polar and Pabello each have been charged with two felony counts of forgery, one felony count of grand theft, and one felony count of grand theft by embezzlement.

“The bail is set at $285,000 each, and the District Attorney’s office has placed a hold on that bail requiring the defendants prove its from a legal and legitimate source,” Emami said.

The defense attorneys could not be reached for comment. A pretrial date is set for Jan. 25, 2012. If convicted, the defendants each face a maximum sentence of six years and four months in state prison.

Copyright 2011 ABC News Radio







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