Dmitry Feoktistov | hours | Getty Images
A screenshot posted on the messaging platform Telegram shows a bank receipt confirming the check deposit for $24,000.
The caption read, “I’m glad I could walk this through for you.. let’s do it again.”
The photo and caption may not look suspicious at first glance, but the posting is actually an advertisement for criminal services that cost US banks billions of dollars, according to a cyber security expert.
‘One-stop shop’ for check fraud
The COVID-19 pandemic – and the trillions of dollars in rescue funds that were distributed across America in the form of paper checks – has given new life to an old scheme: check laundering. It’s a tried and true scam where criminals steal checks, wash the names, write new names, and cash them under false identities. Pandemic relief funds and new, secure messaging apps have made it easier to execute and get away with elaborate plans.
“It’s a big problem that’s getting worse,” said Paul Benda, senior vice president of cybersecurity and risk at the American Bankers Association.
In 2021, banks nationwide reported nearly 250,000 cases of check fraud, according to the Financial Crimes Enforcement Network, a unit of the US Treasury Department. As of last year, that number skyrocketed: Nearly 460,000 check fraud cases were reported—an increase of 84%.
One app in particular, Telegram, has made it easier for organized crime groups to recruit, train, organize and execute plans, according to Maria Noriega, a senior cyber intelligence analyst at a cybersecurity firm who consults with CNBC, in Q6. Is.
“Check fraud, and perhaps fraud flourishes on Telegram primarily because of its unrestricted nature,” Noriega said.
Telegram told CNBC in a statement that it actively moderates harmful content on its platform, including potential hoaxes, and has “banned millions of chats and accounts for violating our terms of service.”
Nevertheless, Q6 was able to find at least 30 channels on Telegram that were dedicated to providing the latest tips and techniques for committing bank fraud. The largest of those groups had 20,000 members.
The platform, which allows users to send encrypted messages to each other and to groups, is popular among criminals because they can hide their identities behind anonymous usernames, according to US law enforcement officials. Noriega says the encrypted data and the site’s anonymity make it impossible for US and international police to trace messages back to real users.
whatsapp, facebook police platform
While other mainstream platforms including WhatsApp and Facebook have also been exploited by criminals for illegal purposes, many of those apps moderate their content more carefully than Telegram, Noriega said. He said that on platforms such as WhatsApp and Facebook, users can more easily report posts and groups for illegal activity and they are generally removed faster than on Telegram, making it easier for fraudsters to advertise there and Communicating becomes more difficult.
“Telegram is unfortunately a source for all things fraud investigation,” Noriega said. “It’s unfortunately become a one-stop shop for everything you need to do to successfully pick, counterfeit, and deposit checks.”
Check laundering schemes can go one of two ways: Criminals can steal checks from mailboxes and use a technique such as Photoshop to physically erase the recipient’s name and replace it with a fake identity and use it to hack their account. deposit or they can take or forge fake cheques. a real account number and submit it under a fake identity.
Noriega said he’s seen people boasting on Telegram that they have inside contacts at certain banks who have shared customer account balances and other information to make sure cashed checks don’t bounce .
Many chats show so-called walkers hiding their identities at hair salons, while others seek accomplices to help them carry out elaborate scams. Some of the messages reviewed by CNBC advertise specific services: “PM us if you need male walkers.” Another posting was offering $350 to cash a counterfeit check at a bank.
In criminal slang, “walks” are trips to the bank to cash those bogus checks. “Walkers” are people who are hired to physically enter banks to commit fraud, bearing the brunt of the risk in the scheme.
According to Benda the elderly and homeless often work as walkers because they often commit crimes for less pay and the bank teller is less likely to question the credibility of an elderly person.
The so-called pimps are one rung above the rungs in the hierarchy of a criminal enterprise. They organize groups of walkers to go to banks, selecting them for age, race, and gender, so that they are appropriately matched to the names on checks to be cashed. To help with appearances, some of those pimps buy clothes for their walkers, or take them to hair salons for a quick trim and color.
In turn, those brokers sell the services of walkers to other criminals who steal physical checks from the U.S. Mail—which sometimes includes brazen thefts from blue postal boxes, home mailboxes, and even apartment building mailrooms. Stolen paper checks are “washed,” or forged, to change the payee’s name and amount on the face of the check.
Using a fake identity, walkers provide a combination of real and false personal information to open a bank account and prevent law enforcement officials from locating a specific individual’s account.
A free-wheeling criminal market of check washing flourishes in online chat rooms on Telegram: pimps compete to offer services, using photos to advertise how reliable their walkers are. They also post videos of themselves paying walkers in wads of cash to entice more walkers to work with them. And they brag when they’ve successfully swindled someone, posting bank slips to show deposits and withdrawals in the thousands of dollars.
Noriega said it may be difficult for banks to flag certain large deposits as unusual because criminals develop similar transaction histories over long periods of time to make the accounts appear legitimate.
Noriega said that in many of these cases, tellers can identify the check walkers because they will come in pairs — one broker watches from afar as the walker reaches over the counter and deposits a large check. In some cases, walkers wear earbuds, Noriega said, enabling a broker to listen in on transactions and feed account information to walkers in real time.
Technology supercharges old crime
Paper checks have been in use in the West since the 1400s, and bankers have been concerned about check fraud since the beginning.
In fact, in 1526 the city of Venice banned checks outright because fraud was so rampant. But of course, that ban didn’t last – the checks were too efficient to be eliminated from the financial system.
Benda of the bankers’ group said the burden of preventing crime often falls on bank tellers, who are not always trained to stop sophisticated, organized fraud.
“That frontline bank employee wants to provide a good customer service,” Benda said. “They have a customer present that looks like a customer, has proper identification and documentation, and they want to provide that customer service.”
He also says that Telegram has accelerated the sophistication and coordination of this crime.
“These guys have done a really good job of eliminating that signing and signing new ones,” Benda said. “Good at getting fake IDs. I mean, they’re hiring people off the street and then making them look pretty.”
lack of mail security
Noriega points out that check fraud exploded in 2021 after criminals — many of whom were exposed to the mailed check process for the first time during the pandemic — identified several weak points in the system.
“You have clear weak points with the US Postal Service and mailboxes are being compromised. Mail is being taken out of them,” she said.
The USPS told CNBC that it is actively educating the public about preventing check theft, including information about check laundering on its website. USPS advises customers to drop off mail in blue collection boxes well in advance of the final pickup time to avoid mail being left out overnight. It also states that if customers are going out of town, they should keep their mail at the post office.
But besides mail security issues, Benda says law enforcement isn’t prosecuting enough of these cases.
The rapid growth of this criminal skill on Telegram as well as the lack of prosecution has bound the banks. Benda says that’s why financial institutions need government help.
“They can’t solve this problem,” he said. “We really need help from law enforcement to prosecute these cases. We need the Postal Service to stop these checks from being stolen.”
, bria cousins And scott zmost contributed to this story.