Fraud Squad makes arrests for ‘bogus cheques’ scam

A well-organised group of white-collar criminals, is said to be behind the fraudulent managers’ or certified cheques being circulated in TT. The Fraud Squad reported it has already arrested close to 20 persons in connection with the crime. The scam, which was first discovered by the Ministry of Agriculture on June 11, has cost businesses millions of dollars in losses. The Downtown Owners and Merchants Association (DOMA), said losses could be more than $3 million by now.

Acting Senior Superintendent of the Fraud Squad, Glenroy Woodley, said there has been a steady stream of “bogus” cheques. Referring to those involved as “criminal entrepreneurs,” he said they were probably using a printing machine to duplicate the cheques. President of the Trinidad and Tobago Manufacturers Association (TTMA), Anthony Aboud, said the fact that there were people out there duplicating cheques, especially those as important as managers’ and certified cheques, is a “very dangerous thing indeed.” Woodley, who said investigations were still continuing, said: “We are still on the search for unsuspecting criminals related to the crime and we are taking it very seriously.” DOMA’s President, Gregory Aboud, disclosed that among the items the cheques were being used to buy were scotch whiskey, marine equipment, hardware, electronics, computers and agricultural equipment.

The Association’s first warning was published in a Newsday article on Friday July 16, which appealed to businesses not to accept any managers’ or certified cheques, by previously unknown customers outside of business hours or on weekends. The Ministry of Agriculture also received complaints from fishermen in June that they had been swindled by unscrupulous businessmen. The Ministry has so far received three complaints, with losses amounting close to $200,000 in fishing equipment,  boat  and engines. DOMA lamented that the use of fraudulent cheques to illegally obtain merchandise from stores and local distributors has recently become prevalent. The Association said that the perpetrators have been making proposals to purchase substantial quantities of products, even negotiating for lower prices and returning with cheques after closing time to pay for the merchanise, when it was too late to verify the validity of the cheques.

Computer technology suspected in bogus cheques

Unlike the Fraud Squad which suspected that the managers’ and certified cheques were cloned with a duplicating machine, Group Security Director, RBTT, Eric Thompson, suspected it could have been done with Information Technology (IT) or computer technology. “There is software from which duplicating can be done. As a matter of fact, information technology is fuelling fraud,” he stated. Responding to criticisms from the business community that the banks should have informed them about the circulation of the fraudulent cheques before some of the businesses were swindled, Thompson said RBTT had no control over what other banks experience in terms of fraud. Even though the first bogus cheque was suspected to have been issued to First Citizens Bank, officials at the institution steered clear of commenting.

However, Thompson, who said investigations had begun immediately after they received their first one, appealed to the business community to practise “know your customer” skills. He said to be aware of people conducting business after hours or on weekends and that unsuspecting businessmen should send a “warning signal.” As for banks dealing with bogus cheques, Thompson said: “To minimise the risk, we have expended great efforts at training our staff to detect and prevent fraud, generally, and cheque fraud in particular. “We have issued comprehensive fraud prevention guidelines and held appropriate meetings/seminars, to educate and protect our clients. These guidelines are under continuous review.” Inspector of Banks, Catherine Kumar, said the Central Bank has now been mandated to overlook the banks’ security systems. She said it is a project they would be looking at a little more closely, including the use of  IT expertise, to ensure adequate security for its customers against any type of crime. She also called on the business sector to be more vigilant in the handling of money and cheques and overall, how they do business with customers.

How to recognise a genuine managers’ cheque

1.The micro print — what appears to be a mere line is actually micro-printed words which are crisp and clear under magnification.
2.Perforated edges — legitimate cheques have edges which reflect that  they were torn from a book, as opposed to straight edges.
3.The MICR line — a reddish hue surrounds the numbers on the MICR line of legitimate cheques. On the reverse side of the cheque it would appear that the colouring bled through the paper, resulting in this feature also being called “bleed through register.”
4.Signatures on forged cheques are more often than not, in plain black, whereas those in legitimate cheques tend to be in coloured ink.
5.Discoloured paper — most cheques are equipped with a chemical stain feature which causes the cheque to become discoloured when washed. Fraudsters often wash cheques in a solution to remove the words and figures written.
6.Ultra-violet watermark — some cheques feature a watermark that is visible under ultra-violet light.
7. Laid line — this feature is in fact an anti-splice backer of printed diagonal lines or words to prevent the cut and paste information. Any attempt to cut and paste over words and/or figures would result in the line/pattern formation being broken.

Latest technology to fight business crime

The latest technology in surveillance cameras which can help in the fight against fraudsters is available in TT. Martin Sabga, Manager Security/Imaging at Mc Enearney Business Machines, Richmond Street, Port-of-Spain, showed Sunday Newsday the Ultra Speed Dome, described as the latest in surveillance systems from the US company American Dynamics, also known as Sensormatic. He described the system as one of the best for “exceptional imaging,” as it is fully equipped with a Digital Signal Processor (DSP) and CCD camera, which contains a chip that produces high quality imagery. It is used to secure tellers and  it provides general surveillance power to do a 220x zoom and a 360 degree turn, which gives it the ability to censor an entire room. “The imaging is exceptional, it can zoom in and produce facial recognition,” he said.

With the system, any client who may have defrauded a business place, can be checked back on by the people who would have done the transaction and be identified. According to Sabga, the camera system also has the capacity to zoom in on cheques and signatures. It is equipped with an infrared feature, which can pick up anything in the darkest of environment and outside of the business place.

Can Fraud Squad deal with white-collar crime?

In a TT Chamber of Industry and Commerce archive column, the organisation said there had been 25 complaints of dishonoured cheques in the year 2001. “In fact, culprits have switched their focus from local banks to suppliers of goods and services eager to “make a sale,” the article said.

The Chamber, while grateful that the Fraud Squad had embarked on investigations at the time, felt that the police investigations of fraud, deception or forgery relative to dishonoured cheques, resulted in one or two prosecutions by them and that the majority of reports of this type were being ignored or put on the back burner because of a lack of human resources to pursue such investigations and the competition for police time by other, more serious crimes.

“This is indeed unfortunate for taxpayers and those suppliers of goods and services whose means of a livelihood are at risk every time they receive a cheque from a customer which bounces,” the Chamber said. It pointed out that failure or neglect by the police to vigilantly enforce the provisions of the Negotiable Instruments (Dishonoured Cheques) Act, 1998, is incomprehensible. TTMA President, Anthony Aboud suggested that the Fraud Squad now needs sophisticated information technology (IT) to assist them in the fight against white-collar crime. In response, Snr Supt Woodley said if this could help, the Fraud Squad would consider the possibilities.

However, he said the Squad needed to know what equipment in IT technology is available before it could tackle white-collar crime in a broader way. Referring to the TT Chamber’s criticism of the Fraud Squad in the handling of circulating dishonoured che-ques in 2001, Snr Supt Woodley pointed out that dishonoured cheques were different from bounced managers’ and certified cheques and needed to be handled differently. Dishonoured cheques are those with which the perpetrator had limited funds in his/her account, he explained. The managers’ or certified cheques being dealt with, are duplicated with every detail professionally copied, he said. Snr Supt Woodley said the fact that people have already been arrested for the crime shows that the Fraud Squad  is capable of cracking down on the crime.

Crime on business sector hurting TT

Aboud said crime, of any kind, white-collar or otherwise, is a negative influence on development for the country. The DOMA president has been outspoken against the effects of crime on the business sector, especially in downtown Port-of-Spain, which has endured several robberies over the past year. For the period June 2003 to June 2004, there have been 834 robberies in Port-of-Spain, a large number of which were attacks on business places. Now, they are being attacked by fraudsters, who are swindling millions of dollars from them. “Crime deters and discourages investment and distorts progressive ambitions. Crime as a basic condition, acts to destroy everyone’s quality of life and it is a common denominator of  human suffering,” he said. TTMA president, Anthony Aboud agreed, pointing out the fact that white-collar crime is being fuelled by technology, shows that crime does not discriminate against any race or sector in society. He said crime, perpetrated by technology as a global scourge,  if left unchecked, can negatively hurt society.