Chasing Pennies

I've written about exploits in banking and brokerage fraud with further articles to follow. Bad banking practices don’t feature well in my write-ups. Institutions change only when they’re forced to.

Recently my fraud expertise touched upon the personal. A good friend fell victim to gaping holes in one of New York’s largest financial institutions, J.P. Morgan Chase & Co.

Lily is smart, pretty, and unattached. Two out of three is pretty good, but she means to win the trifecta. She doesn’t advertise, but merely hopes to attract the right kind of guy. She appears on social media: Facebook, Pinterist, and a singles’ site that’s been around some thirteen years, MeetMe.com, where she met an interesting fellow.

Telling the good from the bad isn’t always easy. By the time our malefactor (male factor or dirtbag are also suitable) stepped into the light, he already knew critical pieces of information about Lily: her real name (thanks to odious Facebook requirements), where she’s lived, family relationships, and importantly– her birthday.

For a few weeks, ‘Antonio Sanchez’ from ‘New Jersey’ wooed our lass on MeetMe. He didn’t do anything crass like ask her bank account number or credit card information; thanks to Chase’s security ‘features’, he didn’t need to.

As Thanksgiving approached, Lily traveled across the country, stopping to visit relatives in Greenfield, Indiana, home of another Lilly, the famed pharmaceuticals company. Our heroine happened to check her bank account and found it unexpectedly fourteen hundred fifty dollars richer.

Lily, not only smart but honest, sought clarification at the Greenfield branch of Chase. Greenfield couldn’t fathom the problem.

check 1 of 6 #808869

“You put money into your account in the early hours of the morning. Looks like you needed it. What’s the problem?”

“I didn’t deposit anything.”

“But you did.” Greenfield regarded her suspiciously. “You’re saying you didn’t?”

“Exactly. I didn’t do any such thing.”

“Well, lucky you. Someone likes you well enough to put coins in your account.”

*click* Instantly Lily knew who’d made the deposit.

A couple of hours later, the situation reached me. By then, other deposits had appeared. Curiously, monies were rapidly shifting among Lily’s three accounts. My fraud alert alarms clanged.

“If you make a withdrawal,” I advised, “calculate only what you own to the penny and not a cent more.”

“What’s the problem?” friends asked. “A handsome guy sending Lily money? Does he have any brothers?”

I spoke adamantly. “There is no money, no boyfriend in New Jersey, no gold at the end of the rainbow.” When I explained the con, Lily agreed to join me for a visit to the Indiana State Police.

The man manning the reception desk told us all detectives were out of the office and wouldn’t return until the next day. Lily asked if she could file a report.

The grizzled trooper brought forms out to us in the lobby. He stood by as Lily tried to explain the situation.

He interrupted her. “A guy giving you money is no crime. No crime, you can’t file a report.”

I said, “There is no money. It’s a con…”

The trooper threw up his palm in a ‘Talk to the hand’ gesture. Cops are trained to seize and maintain control, even when counterproductive. He went on to lecture Lily, not so much accusing her of wasting police time, but of being silly.

“May I explain?” I said as levelly as I could. “There is no money, only fake deposits. He will use that false balance to pay himself.”

The cop paused, considering. “Wouldn’t work,” he said. “If I deposit a check, I have to wait a few days to withdraw funds.”

“That’s why he’s moving money around her accounts. Some banks, perhaps including Chase, lose track of new deposits as they’re moved around. The technique is called seasoning, losing the new deposit tag and making the money look like it’s aged on account.”

“I’m a road warrior,” said the trooper. “I’m not up on these things. Yeah, I’ll have a detective phone you.”

Virtually next door to State Police Headquarters, we’d noticed a Chase branch. Lily made the wisest decision of the day, visiting the bank for an update.

The young woman listened attentively. She quickly grasped the situation. “Oh my God,” she said. “I received a notice exactly like yours of a deposit early in the morning. I need to check my own account before I go home today.”

Together, the three of us discovered additional deposits and further shifting around of money. By then, funds had been used to buy the first Western Union money order made out to an unknown and very foreign name.

“Let me guess,” I said. “The money’s sent to Nigeria?”

“If Lily didn’t give this jerk her personal information,” the young lady said, “how did he get into her account?”

I explained one hypothesis. I’m a vocal critic of the so-called security questions routinely forced upon on-line customers. “What city were you born in?” “What was the name of your first pet?” “What’s your favorite team?” “What’s your favorite color?”

With the slightest information, bad guys find it ludicrously easy to guess the answers. The favorite color question often includes a helpful drop-down menu of eight colors. No one chooses black or white, so a malefactor can guess the answer in six tries or less.

The young branch manager rang the fraud department. She posed the same question to them, who replied “There are so many ways to breach an account…”

check 2 of 6 #808870

The bank gave us copies of the checks. One peculiarity came to light. Chase said it appeared the Nigerian repeatedly deposited the same two checks over and over, fooling Chase and highlighting another flaw in their security, a defective filter for detecting duplicate deposits.

Chase froze Lily’s accounts, leaving her stranded without travel money in the midst of a cross-country trip. But wait, we’re not done.

Lily awoke the next morning, finding her accounts unlocked and a half dozen or so deposits burgeoning her balances.

Lily phoned Chase to let them know further monkey business was afoot in her reactivated accounts. They quickly closed the window and her accounts, again cutting off her funds.

---

Big banks and little people, comes now the pathetic part. Instead of expressing gratitude for Lily’s quick action of notifying them of fraud, Chase blames Lily for the leaking of money from the bank. Their stance is that Lily either worked with the malfeasant Nigerian to defraud Chase, or at the very least handed over her account information to the bad guy. As you now know, that doesn’t have to happen. All it takes is sloppy banking.

Besides seizing Lily’s bank balance, Chase now demands another $600 in compensation for their losses. Good move, Chase: encourage honest citizens to rush in to report fraud made possible by your own shortcomings.

It’s a great day for banking. Have you had similar experiences?

The Digital Detective, Banking part 3

This continues a series of articles about computer fraud. Originally I practiced a career of systems software design and computer consulting, but I sometimes came upon a more shadowy world, that of computer crime. I seldom sought out fraud but I sometimes stumbled upon it, picking up undetected clues others missed.

This episode doesn’t deal with crime, per se, but it includes a con, minor as it is. The scheme required a little ‘social engineering’ and, though the word might be Yiddish, no one can schmooze like Southerners.

The story came to my attention while consulting for banks, this one deep in Virginia’s Shenandoah Valley. My landlord for part of the stay was an eccentric but colorful codger. He talked about a neighbor who leased farm land from him but failed to pay his rent. Outsiders might expect he pulled on a jug of rye whiskey as he talked, but all he did was lean back in his recliner, sip beer, and twirl a never-lit cigarette while a cheerful woman less than half his age clattered in the kitchen. I jotted down his story long before I became a writer, so kindly forgive error and stylistic issues as I strove to capture his dialogue.

1950s era corn picker

Damn Ernie. I hounded that man all summer long for the rent. Finally last fall, I hooked up my corn picker and started up the corn rows. Now a corn picker ain’t a quiet machine, and lo and behold, neighbor Ernie come dashin’ out of his farmhouse yellin’ and cursin’ that I’m stealing his corn.

I said to him I couldn’t possibly be stealing corn off my own land, unrented land at that. He steamed and stormed and said the seed and planting labor had been his, and anyway he was just a little late with the rent, three or four months, maybe four or five, weren’t nuthin.

I told him that I was just going to keep picking corn for myself until someone showed up with rent money. He dashed off like banshees themselves chased him. Pretty soon he comes back waving his checkbook.

I said, “Ernie, are you sure there’s money in that account?” Oh yes. He told me twice there was, so I said there’d better be, and he said he wanted the corn I’d picked. I told him to consider the already picked corn interest and collection fees. Fact is, I finished the rest of that row, which he just hated.

So the skinflint S.O.B. hustled off to hitch up his combine and wagon, and I find myself a few bushels better off than I was before. I cleaned up and headed in town to the bank, right past Ernie who’s racing his machinery through the fields.

At the bank, I always get in Molly’s line. She’s a sweet, buxom lass, and I’d been thinking about asking her out.^†

Anyway, I get up to her teller window and she said the account’s a bit short to cover the check. I asked her exactly how short, and she said she wasn’t allowed to tell me that.

So darlin’, I cajoled, is this check completely worthless, or did Ernie at least come close? Looking at her computer, she said he was purty close.

Well, I says to her kind of reflectively, I want to tell my neighbor Ernie how much he needs to cover my check. Like would he have to deposit only $10? No, she said, ten dollars wouldn’t cover it.

Well, says I, would $20 or $30 do? No, she smiled at me, it’s not quite enough.

Hmm, says I, I wonder if $40 or $50 would suffice? Um, she said to me, that first amount ought to cover it.

Thank you, I says, I’ll tell that rascal he needs to put $40 in the bank. By the way, sweet thing, can I have a deposit slip? And you think maybe I can call you up? For, uh, you know, maybe dinner Saturday?

So I walked out of there with a bounce in my step, a deposit slip and her phone number. I was feelin’ purty good. What I did was get in my car and circle around through the bank’s drive-thru. I already had Ernie’s account number on the check, so I just filled out the slip and shot it through the air tube with two $20 bills. Sure enough, the receipt came back showing $1002.39. Good on Molly.

But wait, I say, I almost forgot to cash a check. I send over Ernie’s $1000 check and this time I got back a thousand dollars.

Fair enough. I probably had $40 in shelled corn and a lesson I ain’t gonna rent to Ernie no more.

Ernie got stupid, though, and instead of being grateful I didn’t bounce his worthless ass along with his worthless check and turn both over to the sheriff for collection, he raised holy hell at the bank yelling someone manipulated his account.

I took Molly to the horse show that Saturday. Now I tell you personal like, you want to get a lady in a receptive mood, bein’ around horses will do it. Something about women and horseflesh– just a word to the wise.

Anyway, Molly, she confided the bank said it was apparent someone had taken liberties, but they couldn’t blame the girl who took the deposit and they couldn’t blame the teller that cashed the check. They just gave everybody a stern reminder warning.

Ernie wanted to call the authorities, but the branch manager explained Ernie’d be the one in trouble for writing bad checks. He didn’t mention Molly could have gotten in trouble if they’d figured out her role.

Molly said she knew I’d manipulated her and wanted to know if I’d asked her out from obligation or guilt. I said I didn’t want to sully a relationship thinking I used her. She needed a lot of reassurance about that, and so Friday nights and Saturday nights we just get romantic and I give her plenty of reassuring. Been about a year now. Figure we can go on with this for a long, long time.

And he winked at the cheerful lass in the kitchen doorway.

---

† Commonly in Virginia’s Shenandoah Valley, ‘out’ sounds are pronounced like a Scottish ‘oot’. Thus he really said, “I’d been thinking aboot asking her oot.”

Bank Robbers I have known...

By Melodie Campbell  (who successfully disguised herself as a bank manager for several years…)

One of the great things about managing a bank is the interesting people you meet.  By this I mean, bank robbers and other villains.

One fraud artist of my acquaintance was affectionately nicknamed Father Guido Sarducci.  Father Guido was indeed a priest, and one of the most personable guys I’ve ever met.  Friendly, he knew everyone by name, and always had a kind word for the tellers.  Half of us switched churches just so he would hear our confessions.

We adored him.  When he came looking for funds to ‘renovate the parish hall,’ we were thrilled to help. Unfortunately, so were twelve other banks.  The bookies were even more thrilled.  When it finally became apparent that most of the funds were going to renovate the casinos in Vegas, Father Guido got the boot.  I think he now preaches from the local jail.

I don’t know what it was about our particular branch, but we seemed to attract all the novice stick-up artists.  As a matter of fact, I seriously considered installing a sign in the front window: “Experienced Bank Robbers ONLY.”  The situation became even more complicated when the teller in question had the savvy and intelligence of a Hershey Bar.

The following is a verbatim – this is the truth – account of a conversation that took place between one of my tellers and an extremely dangerous bank robber:

Robber (waving large gun threateningly):  “This is a robbery.  Gimme your money.”

Barb (watching the clock for her break):  “How much do you want?”

Robber (flustered):  “How much do you got?”

Barb:  “Well, if I run this little card through here, I can get a thousand dollars.”

Robber: “D’ya think you could run it through twice?”

Barb (bored):  “I can try.”

Robber: “Thanks.”

I have a theory that my customer service reps were in fact members of an elite corps put through special training to psych out villains.  This is the only way I can explain the behaviour of Carmen, our most efficient teller, when a potential robber shoved a green withdrawal form across the counter.

“Read the back,” he said.

She did.  It was the standard note.  (Do they all go to the same school?):

‘This is a stick-up.  I’ve got a gun.  Give me all your money.’

Whereupon, Carmen turned over the withdrawal form, pointed to the bottom, and said in a totally bored voice, “You forgot to sign.”

Of course, he had to put down the gun in order to pick up the pen, and….

The best story I’ve heard in banking circles involved a seasoned bank robber in Boston. This guy was a master.  He was also highly successful, with the Rolex watch, the Gucci shoes, and the loaded getaway car.  A devotee of the in-and-out school of bank robbery, he would time himself to under a minute.

Unfortunately, on this particularly job, he was not the only professional on the block.  Out the door with several thousand in a respectable 45 seconds, he stopped dead at the curb, staring at empty space.  His car had been stolen.

Melodie Campbell writes funny books about the mob.  The Goddaughter’s Revenge, winner of the Derringer and Arthur Ellis awards, is available at Chapters, Amazon and Barnes&Noble.  www.melodiecampbell.com

 On Amazon

My Father and Cousin Clyde

At the end of this article, you'll find a poem written by Bonnie Parker. Someone posted this poem on Facebook and it reminded me of my father, Thomas Lee Barrow.  My father often told of how we were probably related to Clyde Barrow. I'm done a little bit of genealogy but never attempted to prove our connection to the notorious Mr, Clyde Barrow. It seemed more fun to just "say" we are related and leave it at that. But is it possible the criminal gene is what prompted me to write fictional crime stories? Who knows?

My father had a wonderful but, perhaps a bit strange, sense of humor and told stories of how he exploited the connection to Clyde Barrow. Let me explain, my father was born in Beaumont, TX in 1911 and was in his early twenties when Clyde and Bonnie were running around North Texas. Dad actually lived in Fort Worth, Texas then. A young man twenty-two or twenty-three in the early 1930s was like most young men of the day, prone to practical jokes.

Dad thought it was funny to walk into the First National Bank and write a counter check for ten or twenty dollars, sign his name, T. L, Barrow, walk over and hand the check to the teller. I know most of you would have trouble understanding but in those years, people didn't  have scads of personal checks like we have nowadays. You mostly went to your bank, pick up a printed check form located at the bank's signature island table, wrote out the amount you wanted, gave it to a teller and got the amount you had asked for on the counter check.

Quite often the teller would look either scared or extra hard at my dad, sometimes nod to the bank manager, or ask for identification from my dad. They'd go ahead and give dad his ten or twenty dollars and breathe a sigh of relief that someone with the name of Barrow did nothing more than cash a check. The Fort Worth and Dallas newspapers had almost daily stories of the bad mob known as the Barrow gang. That name was familiar to everyone in the banking business.

A little more involved act of fun happened when two young men got together and took advantage of the Barrow name. Dad and his best friend, Ken Owens, used to go into bars and play their joke. Once inside the bar, my dad would walk down to the far end of the bar and sit on a stool there. His friend, Ken would park himself on a stool near the front door and get the bartender's attention. When the bar man walked up to him, Ken would say, "You see that man down there?" he'd nod towards my father, Tom Barrow. The barman would say "Yes."

Ken would then say, "That's Clyde Barrow's brother and he expects a free drink." The barman would nod and give a free drink to both my dad and Ken Owens. The two young men would drink their free drink and soon they'd leave, leaving the bartender wiping sweat off his brow, thankful that Clyde Barrow's brother had left his establishment. The two pranksters would then head down the street and around the corner to another bar and work it for another free drink.

Like I said earlier, I'm not totally sure of our connection to Clyde Barrow. I do know however, that my father, Thomas Lee Barrow, had a strong influence on my life. My love of mysteries because he gave me my first mystery paperbacks to read, Mike Hammer, Private Eye books written by Mickey Spillane, and Private Eye Shell Scott written by Richard Prather. I think, my mother and father were both quick with funny quips and they passed that gene along. I have a grandson, Riley Fox who lives in Portland, OR who is a stand-up comic. I don't have any bank robbing family members like Cousin Clyde and that's a good thing. I'd much rather write about mysteries and crime that to worry about a sheriff's posse  or the FBI coming after me.

And although, Bonnie Parker and Clyde Barrow never had any children she definitely had a gift for writing poetry, and maybe that writing gene was passed to me through osmosis. Besides the poem listed here she wrote several poems which were published in the Dallas newspapers and there was a little notebook of her poems written while she was in jail.

I'll admit that I've always had a strong desire to claim a connection to Mr. Clyde Barrow. Wonder if I can get a free drink or two out of that?

You've read the story of Jesse James of how he lived and died. If you're still in need; of something to read, here's the story of Bonnie and Clyde. Now Bonnie and Clyde are the Barrow gang I'm sure you all have read. how they rob and steal; and those who squeal, are usually found dying or dead. There's lots of untruths to these write-ups; they're not as ruthless as that. their nature is raw; they hate all the law, the stool pigeons, spotters and rats. They call them cold-blooded killers they say they are heartless and mean. But I say this with pride that I once knew Clyde, when he was honest and upright and clean. But the law fooled around; kept taking him down, and locking him up in a cell. Till he said to me; "I'll never be free, so I'll meet a few of them in hell" The road was so dimly lighted there were no highway signs to guide. But they made up their minds; if all roads were blind, they wouldn't give up till they died. If a policeman is killed in Dallas and they have no clue or guide. If they can't find a fiend, they just wipe their slate clean and hang it on Bonnie and Clyde. There's two crimes committed in America not accredited to the Barrow mob. They had no hand; in the kidnap demand, nor the Kansas City Depot job. If they try to act like citizens and rent them a nice little flat. About the third night; they're invited to fight, by a sub-gun's rat-tat-tat. They don't think they're too smart or desperate they know that the law always wins. They've been shot at before; but they do not ignore, that death is the wages of sin. Some day they'll go down together they'll bury them side by side. To few it'll be grief, to the law a relief but it's death for Bonnie and Clyde.

Fast Eddie

Once upon a time, a man named "Fast Eddie" Watkins could get in and out of banks quickly, relieving them of cash, and usually not harming anyone. He became one of Cleveland's most notorious criminals, and that says a lot in my hometown. Cleveland had the Torso Killer. Its suburbs produced Jeffrey Dahmer while the Tremont neighborhood spawned notorious kidnapper Ariel Castro. A branch of the Genovese crime family ran the underworld for years, and Irish mobster Danny Green met a fiery end when his car exploded leaving a union hall in the late 1970's. So, yeah. The Northcoast has hosted its share of thugs and monsters.
But we always had a soft spot for Fast Eddie. Sure, he robbed banks. But he was a gentleman thief. In and out, and he loved the publicity. The Plain Dealer, The Press (infamous for its shoddy reporting of the Sam Sheppard murder case), and the local TV stations faithfully recounted his exploits. In a city more famous for its burning river and its serial killers, Watkins developed a Robin Hood reputation.

The one time Fast Eddie's robbery didn't go so well, he took 9 hostages. After 21 hours, though, he let everyone go and surrendered. The feds sent him to prison in Atlanta. He escaped, and therein is where Fast Eddie crossed a very young Jim Winter's path.

South of the exurb where I grew up, there is, to this day, a stretch of potato fields called The Muck, a handful of rock quarries, and cornfields all sandwiched between the CSX and Norfolk Southern railroads. We used to ride our bikes out through there, headed for the tiny little freeway burg of Burbank. Only one day, the local police stopped us.

"Why can't we ride out to Burbank?" I asked the Lodi cop at the roadblock.

"We got a bank robber cornered out past the rock quarry."

I went home. At 6:00, WEWS led their news broadcast with the standoff between Fast Eddie Watkins and the Medina County Sheriff. By 7, Fast Eddie was in custody and headed back to prison.

Watkins never hid the fact that he was a bank robber. He said he enjoyed it. "I wanted to be a big shot," he confessed. His illegal withdrawals helped finance his lavish lifestyle. So where did he keep his money?

"I trust banks with my money. They're insured. It's the best place in the world to put your money."

But was it the money? Watkins wife once said no. Mrs. Watkins said that Fast Eddie ogled banks the way most men ogled girls.

But even in prison with his criminal career over, Watkins remained a character. The Cleveland papers occasionally reported that Fast Eddie had taken up painting while behind bars, favoring landscapes.

Fast Eddie died in 2002 at the age of 82 after a long battle with heart and lung disease. Unlike the bank robbers of an earlier era, going out in a blaze of glory wasn't for him.

The Digital Detective, Banking part 2

Continued from last week, where we explained the basics of kiting and how banks work…

The Crumpled Kite

As mentioned earlier, kiting isn’t as common as it used to be, partly because of stiff penalties, but also because the time it takes to clear a check with another bank has shrunk from many days– sometimes a couple of weeks– to just a day or two. But when I consulted, I witnessed a kiting scheme that could have fooled financial institutions and their computers almost indefinitely.

A bank in Virginia’s Shenandoah Valley decided to invest its excess computer resources in software development and I contracted as their consultant. It was an odd relationship because they feared me as if they’d hired a gunslinger to guard the vault.

One evening I idled, waiting for computer time; in fact, I was waiting for a new guy to finish the night’s reconciliation run. As I sat tapping my fingers, he called the lead operator over and pointed out a worn, battered check. The lead glanced and dismissed it, saying “Just stick it in an envelope, imprint it, and run it through again.”

“But…” said the new guy hesitantly, aware the lead seemed annoyed he didn’t jump to it. “But, we can’t. I mean, it arrived in a carrier envelope and look, it’s not our routing number. And it's really old.”

Curious, I wandered over and the operations supervisor stepped in, obviously impatient at the delay. He read the check, stared at it, lips moving as he re-read the numbers. He ran his thumb under the date, several months old. Puzzled, he picked up the phone and beeped the operations manager.

It was still early evening when the manager strolled in. He looked at the check and made a phone call. When he hung up, he shrugged and turned to the supervisor, “No matter, we’ll find out in the morning what’s going on.”

But by now, the worn check had captured my curiosity and that of my colleagues. Three of us sat down to figure it out. We discovered a scam, and this is how it worked.

The Endless Kite

From a common check supply company, our schemer bought checks printed with Frugal Savings & Loan’s name, address, and logo, but with Penury Bank’s routing number. He waltzed into a bank other than Frugal Savings & Loan, cashed his check, and departed without a care in the world.

That evening during the check run, the machine sorted his check into a tray to be delivered to the clearing house. From there on out, the following cycle endlessly repeated:

1. The check arrives at the clearing house. Its routing number routes the check to Penury Bank & Trust.
2. During the check run at Penury, the computer accepts the routing number but doesn’t recognize the check’s bogus account number and kicks it into the rejects pocket.
3. A Penury operator plucks it out of the rejects pocket, notices it bears a Frugal Savings & Loan logo and address on it, and either manually packages it to send directly to Frugal S&L or bundles it to send back to the central clearing house for forwarding to Frugal. Either way, the check winds up at Frugal Savings & Loan.
4. At Frugal, the MICR reader sees another bank’s routing number, knows that’s wrong, and kicks the check into the rejects pocket. It goes back to the clearing house to repeat the cycle again.

Meanwhile, the bank that cashed the check hasn’t received their money, but neither has the check been denied.

The Kite that Crashed

The cycle eventually broke because constant transit nearly wore out the check and an inexperienced operator questioned why a draft on his bank contained an unfamiliar routing number.

We don’t know how many experienced operators routinely handled the check, seeing the bank name and logo and not the routing number, just as their computers saw the routing number and not the bank name.

Banks (at least at that time) did not have a standardized way of handling a check that forever floated but never cleared. In many cases, the bank software simply left the deposit unresolved with neither the funds transferred nor reserved– it simply stayed on the books, so to speak. In banks that impose holds, their programs might be written to release the hold after a number of days if the check isn’t returned, even if the funds aren’t actually received.

I speculate the scheme might have been harder to detect if non-magnetic digits had been printed over ‘invisible’ MICR ink. In other words, the pigment in MICR ink is for the convenience of people. The computer itself doesn’t use optical recognition (OCR) but senses the microscopic particles in the numbers.

No one’s immune to bunco, not even banks.

The Digital Detective, Banking part 1

Banking on Naïveté

Readers and writers may be aware of many internet ploys attributed to Nigerians and occasionally Russians. One of the first I saw came in an eMail and read something like:

Hello, my name is Renaldo. I’m a Ukraine artist and I sell my works all over the world. Some customers want to pay by cheque or money order, which is expensive and difficult to cash here. I will pay you 10% if you can cash cheques and wire me 90%. Please?

Consider three possibilities:

1. It’s barely possible although unlikely the request is legitimate.
2. It’s a money laundering scheme.
3. It’s an outright scam to grab your money.

In the third outcome, the schemers arrange to have a number of checks sent, which you cash and forward the proceeds. Eventually you receive a large money order or draft drawn on a major bank. Your bank likes it, cashes it, and gives you the money, whereupon you forward 90%.

Two or three weeks later, your now angry banker calls you, demanding restitution for a bad money order. The forgery was so good, it not only fooled you, it fooled them, but by now the money’s in Asia or Africa and you’re stuck, having to repay your bank several thousand dollars.

This works in a similar way to an eBay / Craig’s List scam. You advertise an item for sale and the bid closes at $150. To your surprise, you receive a money order for $1500 followed by a panicky eMail, wherein the buyer claims their bank or post office made a typo and added an extra zero. Instead of returning the check, they say they trust your honesty and since they need the item you’re selling, they suggest you cash the money order and return the excess along with the item you sold.

All goes well until your bank belatedly discovers the money order is fraudulent. Not only is your precious item long gone, but you must repay your bank.

During the next few weeks, I’m going to write about bank and brokerage fraud.

How to Fly a Kite

Kiting was once a commonplace fraud where the perpetrator opens accounts in at least two separate banks, neither of which places a hold on checks. Indeed, kiting exploits the hold greedy banks place on checks, holds where they use your money for free. High-speed electronic banking and stiff penalties have made the crime less common now because many checks can be instantaneously verified.

Here is how traditional kiting works: Our perpetrator, whom we'll call James Whitcomb Wiley III of Beaver Meadows, Indiana (no relation to the real James Whitcomb Wiley III of Beaver Meadows, Indiana) establishes accounts at Frugal Savings & Loan and Penury Bank & Trust, with no money to speak of in either account. Still, our man Wiley wants $1000.

He goes to Frugal S&L and withdraws $1000, covering it with a simultaneous deposit of a check for $1000 drawn upon his Penury Bank account. He’s just kited his first check. An honest person would scurry over to Penury and deposit funds there before the flaky check arrives, but not Wiley.

Wiley intends to live in Beaver Meadows for a while, but his prospects of earning $1000 to reimburse Penury Bank remain elusive. So he writes a check drawn on Frugal S&L to deposit in Penury Bank– whereupon he kites his second check, and now Penury is waiting for Frugal's check to clear. Before the empty account can be discovered, he deposits a fresh but worthless Penury check into Frugal, and continues the cycle.

Theoretically, a diligent fraudster could continue this a long time. In times past, people have pulled it off for weeks, even months. However, such schemes are subject to human error and unforeseen events that eventually expose the kite and bring the party to a halt. Meanwhile, Mr. Wiley has probably moved on to another state, possibly opening an account with a check drawn upon Penury Bank & Trust.

A Bank's Back Office

At the bottom of your checks is a row of numbers and hyphens printed in a distinctive 'MICR' type style using special magnetic ink.

You’ll notice at least two groups of numbers. One group you’ll recognize as your account number. The group before it contains nine digits, which represents the bank’s routing number, unique to each institution. You may also find the check number and, after it’s returned from the bank, possibly the amount of the check, which it’s wise to verify.

Banks don’t require customers to use checks they provide, indeed, as the story ‘Swamped’ pointed out, you can write out a check on anything, even a paper napkin. Many people buy checks from a paper supplier, like those that advertise in the local ad sheets.

At the end of a business day, banks gather checks and deposits made during the day and checks received from federal clearing houses, which they feed through a MICR device. MICR (pronounced my’cur) stands for magnetic ink character recognition and the machine, a magnetic ink character reader, reads those numbers from checks and deposits slips into the computer.

Occasionally checks jam or the machine fails to read the numbers. An operator may glue a strip at the bottom or place the check in a glassine envelope and manually key the numbers with a MICR imprinter. If the clearing house sends a check to the wrong bank, it will be kicked out and sent back to be routed to the correct one. Experienced operators are used to this and handle flaws and flubs as a matter of course.

Here I've built background for next week, where I'll reveal the Endless Kite.

The Bank Robbery

First off, know that drug dealers not only have no scruples about breaking the laws of society, they also frequently have no qualms about cheating their customers. Sad to say, there is no quality control when it comes to dealers and illegal substances. Caveat emptor.

Second, in the old days, if an agent got burned by buying a powder or tablet which turned out not to be a controlled substance, then the agent either got the money back from the dealer, or he made up the lost cash out of his own pocket. (NOTE: In more recent decades, the law was amended to make any distribution of counterfeit substances an illegal act under statutes governing the attempt to distribute a controlled substance or under the appropriate conspiracy laws. But, back then you had to get your money back.)

Third, there once existed an unofficial group known as the Gronk Squad, lads who were usually first through the door on any armed felon arrest. They also acted as backup when it came to making up a burn.

Fourth, we'll call the dealer Larry. It's not his real name, but Larry won't mind.

So here's the tale. A young cop fresh to the fed task force had bought what he thought was coke, but the lab report came back procaine, not a controlled substance. Time to repossess the money.

Late that morning, the young cop and his also young partner drove over to Larry's house. The Gronk Squad set up mobile surveillance on the outside. Young Cop went in alone and was back out in under ten minutes. He got into his car and drove around the block to update us. Seemed Larry was still in bed, wasn't inclined to reimburse the cash and maybe What's His Name should come back some other time.

My partner, a 15 year veteran of the streets, took this response as a brushoff, so he decided to go in the house himself with Young Cop. I had a fair idea what would happen next. Sure enough, two minutes later and out comes Larry, hopping on one bare foot while trying to get his jeans on. Larry gets in the back seat of the two-door undercover car, then he, Young Cop and my partner drive over to the residence of Larry's source of supply. Jake, me and Young Cop's partner follow in my blue Cadillac. We set up surveillance from a location atop a hill where we can see everything.

Larry, Young Cop and my partner soon return to the U/C car from the source's residence. Apparently, the source isn't home. Larry gets in the back seat again. Now, a car of young males shows up and parks behind the U/C car. The driver's window comes down and a long black tube slides out. Looks like they brought a shotgun to the curbside gathering. Larry's friends, who had been left back at his house when Larry got dressed in the front yard, have evidently decided to ride to Larry's rescue. The driver, holding the shotgun, tries to encourage Larry to get out of the car he's in and then get into their vehicle. Larry's not sure he should do that, so he wisely stays where he is. You could aptly call this a Mexican standoff, except only one side has displayed weapons up to this point.

To better balance the scales, those of us on the hill invite ourselves to the baile (that's Spanish for dance). The blue Cadillac rushes down off the hill and sandwiches the vehicle containing Larry's friends. Perhaps feeling a bit cramped in their options, the Friends of Larry abandon Larry to his fate as they depart the scene in great haste. The Cadillac gives chase. No lights, no siren. We don't have the money back yet.

After a few blocks and turns, the Friends of Larry stop their vehicle. I stop the blue Cadillac about sixty feet back. Their driver gets out with his shotgun pointed in our direction. Their front passenger gets out with a pistol. Not to be outdone, I crouch behind my driver's door, automatic in hand in my best Broderick Crawford style. Jake does the same behind our front passenger door. My veteran partner and Young Cop with Larry in their back seat pull up behind us. The tableau becomes a slice of very long Time.

Unfortunately, we are all parked beside a bank on the corner.

The security guard, an off-duty cop working his second job to make ends meet, has been quietly sipping his hot coffee up until now. It's just another slow day for him. He glances out the side window at what has been a nice morning. Startled at seeing all the men brandishing weapons in the street, he spills coffee on himself as he frantically punches the Panic Button. To him, it's obviously a bank robbery about to be in progress.

The tableau breaks when the Friends of Larry's driver declines to make a last stand on such a beautiful sunlit morning. he throws his shotgun into the back seat and prepares to drive off. A blur flashes by on my left side. It's Young Cop on a dead run towards the Friends of Larry. Guess Young Cop had some pent up feelings about how things were going, so he decided to take a more active hand.

Reaching through the open driver's window, Young Cop tries to grab the keys out of the ignition. Unnerved, the driver puts the transmission in gear and steps on the gas. Young Cop, supported by his elbow inside the window frame, is now going for a ride on the outside of the car. I'm not sure who turned the steering wheel, but the vehicle takes an abrupt right turn.

The bank, being on a corner, has its front door located on an angle at that corner of the building. A canopy comes out over the sidewalk from the door and there are large, low-growing evergreens positioned for landscape.

The Friends of Larry's car passes under the canopy and between the front door and the outer canopy uprights. Young Cop realizes there isn't enough room for him to safely pass through, so he dives into the nearest large evergreen. All I see is a pair of brown Dingo boots sticking out. The Friends of Larry disappear down the street at a high rate of speed. I recover Young Cop into my car and we ride off into the horizon.

Seems Larry has seen enough and no longer wishes to participate in further actions. At Larry's request, my partner takes him to Larry's own bank where Larry withdraws sufficient funds to repay the buy money. Larry is then dismissed with an admonition about selling bad drugs. He promises to do better in the future.

We never broke cover. (Didn't burn the informant for other cases, plus who knows, maybe Larry would sell good stuff to us the next time. Dumber things have happened.)

Local police respond to the bank alarm, but the street is deserted.

I still have the newspaper article with the headline: Bank Robbery Thwarted.

Those were exciting days. Fortunately, wiser heads soon prevailed and laws and policies were changed for the better.

PS~ I tell these tales of the street as factually as I remember, just as though we were all a bunch of cops sitting in a bar, swapping stories for laughs and learning from each other, a matter of survival on the street. However, if you as a writer get your muse jogged by anything you think would make a character, a scene, an action from any of these previous or future tales, then feel free to use it for yourself. One way or another, we're all in this together.

My Favorite Characters, Part I

Since I live in a small town and write about a small town, there are some people who claim that they recognize every character as a local.  They're wrong.  Most of my characters - and I assume most of yours, dear readers, as well - are a mixture of people I've met, people I know, people I've seen, people I've read about, people I've invented, and, of course, myself.  Some characters grow on me more than others.  Some I use more than others.  And some I like more than others.

Martha Jane Stark, better known in Laskin, South Dakota, as Matt Stark, is a sixty-something woman with a bad past. The first line I ever wrote about her was that "when she was 16, she ran off with the lion tamer from the circus, and he finally met his match."  The first story I ever wrote with her in it, she had just returned to retire in Laskin, after about a 20 year absence, and got into a huge fight with a former lover.  Since at the time of their affair she'd been in her 40s and he'd been in his late teens, now that she was in her 60s and he was in his 30s, he really didn't want to be reminded of the old days when they couldn't get enough of each other in the back booth of the Norseman's Bar.  Things happened.  I haven't sold that story yet, and I am beginning to suspect that it isn't that good - time to take it out for a rewrite, perhaps.  I figure the world must be ready for a hard living, hard drinking, unrepentant, bad-tempered woman in her 60's:  Think Bogart with sagging breasts...

Today, Matt still drinks, still smokes, still gambles (a bit), but has given up men.  Instead, she sticks with dogs, who she admits she likes better than people.  She is mostly honest, and she is loyal.  She drives her brother Harold - a dyspeptic accountant - absolutely nuts, but then he plays life very safe.  For very good reasons.  He is an accountant, and years ago, their father robbed the Laskin bank, and his mother turned into the town hermit.  Harold's been trying to live down his whole family for years.



My source material for Matt is two-fold.  Calamity Jane (whose name was Martha Jane Canary) is a definite inspiration, but even more than that colorful woman is my Aunt Katt, who never married, loved dogs, and lived wild.  Aunt Katt was the one who, while living in Chicago, woke up late one night to find someone either had killed or was killing her dogs.  Whichever it was, she got up and, dressed only in her nightgown and a hatchet, went out to find the dog-slayer and have vengeance.  I'm not sure what the outcome was, but in our family the story always ended with "and everyone got out of her way."

Matt Stark is one of my favorite characters, because she is who she is.  She is my truth teller:

Matt about the victim in "Death of a Good Man":  "He was the type that leaves everything behind.  Walks away clean.  Or so he thinks."  And of one of the victim's lovers, "Maria can't believe a man loves her unless he sleeps with her."

Matt on two juvenile delinquents she tends for a while in "School Days":  “They’re okay.  They kept stealing stuff at first, but I nailed them on it.  Now they know they can have toilet paper for the asking, they can eat anything I got, and I turn a blind eye when they snitch a smoke.  Anything else, there’s hell to pay.”

Matt when Carl Jacobsen shoots Jack Olson in self-defense in "Rights":  “Look, a lot of people think you got to take sides.  Cause if Carl made a mistake, then Jack’s dead for nothing, and that just pisses everybody off.  And if Carl’s wrong, that messes with being able to defend yourself.  So Jack must’ve done something, because otherwise Carl wouldn’t have shot him, so Jack’s a son of a bitch, and all’s well with the world.” 


I use her sparingly, but I always enjoy it when she shows up, usually having a red beer at the Norseman's Bar, playing euchre at Mellette's, or walking her last remaining dog, Whisper, down the street.  She will do something outrageous, and then she'll say what no one else will.  And order another beer.  And light another cigarette.  And walk her dog.  As long as I'm writing her, she'll never change.