3 Lessons Learned from the Houston Check Fraud Bust

A recent bust of a check forgery ring led to the arrest of 40 people in Houston. News reports from the Houston Chronicle describe the operation:

“An elaborate check fraud scheme headed by a Nigerian criminal operation in the Houston area employed street gang members to steal rent checks from apartment buildings, counterfeit them, and then paid scores of homeless people to cash the checks, according to court documents.

The checks and money orders were chemically washed, then counterfeited and either cashed locally or deposited into bank accounts set up by the criminal organization.

Leaders of the check fraud ring allegedly recruited members of several Houston street gangs who would steal checks and money orders from apartment complex drop boxes.

The gang members recruited homeless people from one downtown Houston homeless center and paid them $50 to cash checks up to $500, and $100 for cashing checks up to $1,000, records show.”

Lesson One would be that check fraud has become very international. This Nigerian operation in Houston, along with other Russian and Chinese criminal operations in the past show this trend by international gangs.

Lesson Two - from the large number of checks stolen, to the chemical washing, to the elaborate distribution and cashing of forged checks show just how organized they are.

Lesson Three in this operation shows that they are not just going after large check amounts. Now they are going for volumes of checks. These small forgeries take just as much of your time to close your bank account and open a new one, along with clearing your good name.

What has your experience been with check fraud?