• Sat. May 21st, 2022

How fraudsters turn checks into bitcoin

Criminals are increasingly targeting the US Postal Service and personal mailboxes to steal filled checks and sell them on the Internet using social media platforms. The buyers then change the payee and the amount on the checks to steal thousands of dollars from the victims’ bank accounts. While the banks themselves usually bear the financial burden and reimburse targeted accounts, criminals can use checks to steal the identity of victims, which can have serious consequences.

I founded and now lead Georgia State University’s Evidence Based Cybersecurity Research Group, which aims to learn what works and what doesn’t in cybercrime prevention. Over the past two years, we have been monitoring 60 internet black market communication channels to learn more about the online fraud ecosystem and collect data about it in a systematic way to identify trends.

One thing we didn’t expect to see was an increase in stolen checks.

Criminals can gain access to anyone with a stolen or copied mailbox key, which we’ve seen for sale for up to $ 1,000.

Buyers then use nail polish remover to erase the name of the intended payee and the amount displayed on the check, replacing those details with their own preferred payees, such as a retailer, and the amount, usually much higher than the check. ‘origin. A buyer can also simply cash the check at a place like Walmart using a fake ID. Thieves can deposit or cash the checks themselves or sell them to others through a marketplace for illicit items, such as fake IDs and credit cards. Prices are typically $ 175 for personal checks and $ 250 for business checks, payable in bitcoin, but still negotiable and cheaper in bulk, based on our observations and direct interactions with sellers.

In some cases, we believe that criminals are using checks to steal the identity of the victim by using their name and address to fabricate fake driver’s licenses, passports and other legal documents. By stealing someone’s identity, a criminal can use it to submit bogus loan and credit card applications, gain access to the victim’s bank accounts, and engage in other types of fraud by line.

Black Market Discussion Forums Tracking

To better understand how cybercriminals work, my team of graduate students began monitoring 60 online chat channels where we knew people were tampering with fraudulent documents. Examples of these types of channels are group chats on messaging apps like WhatsApp, ICQ, and Telegram, in which users post photos of items they want to sell. Some of the channels we watch are public, while others required an invite, which we managed to secure.

In our observations, we encountered an average of 1,325 stolen checks sold each week in October 2021, compared to 634 per week in September and 409 in August. While there is little historical data on the practice, a week-long pilot study we conducted in October 2020 puts these numbers in some perspective. At the time, we only observed 158 stolen checks during this period. After noticing an increase in sales of stolen checks, we started to systematically collect data from these channels about six months ago in order to keep up with the trend. We downloaded the images, encoded them, and then aggregated the data so that we could spot trends in what was being sold.

In addition, these numbers are probably only a small fraction of the number of checks actually stolen and sold. We focused on just 60 markets, when in fact there are thousands currently active.

In dollars, we found that the face value of the checks, as written, was $ 11.6 million for the entire month of October and $ 10.2 million for September. But again, these values ​​probably represent a small portion of the actual amount of money stolen from victims, as criminals often rewrite checks for much larger amounts.

Using the addresses of the victims, which appeared in the upper left-hand corner of the checks, and focusing on the data we collected in October 2021, we found that New York, Florida, Texas, and California were the main sources.

How to protect yourself

Bank checking accounts generally give customers the option of sending money electronically, whether to a friend or to a business, for free. And there are plenty of apps and other services that let you make digital payments from bank accounts or by credit card. While these methods are also risky, they are generally much safer than writing a check and sending it in the mail.

Nonetheless, some types of businesses may require a physical check for payment, such as homeowners, utilities, and insurance companies. Also, for personal reasons, some people, including me, prefer to pay their bills by check rather than by other means of payment.

To avoid the risk, I make sure to deposit all my letters containing checks inside my local post office. It’s usually your best bet to keep them out of the hands of criminals and make sure they reach their intended destination.

The United States Postal Inspection Service, the agency responsible for preventing mail theft, also offers tips for staying protected.

With regard to law enforcement, the inspection service works with the police and others to combat mail-related crime. These efforts result in the arrest of thousands of mail and parcel thieves every year. However, with every arrest there are many more criminals who go undetected.

And when we briefed officials on our findings, they were also surprised by what we found but planned to step up monitoring of these types of black market communication channels.

Our research suggests that much more systematic data on this type of fraud is needed in order to better understand how it works, to quell the activity, and to prevent it from happening in the first place.


David Maimon is Associate Professor of Criminal Justice and Criminology at Georgia State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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