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Corporate Treasury and Finance Pros Discuss Prosecuting Check Fraud

  • By Staff Writers
  • Published: 2011-07-11

Recently on AFP’s discussion board corporate treasury and finance professionals discussed prosecuting check fraud:

“We had our first instance of a fraudulent check with we caught via positive pay. We rejected the item timely, but still would like to proceed with prosecution. Someone had produced a fake check with our MICR, and also forged signature, by stating they are signatory on the account. Did anyone go down this road, and what are the next steps? It seems a misdemeanor charge should be filed at the county of the bank of first deposit? Any helpful tips?” 

—Anthony Lysenko, CTP, Sr. Treasury Analyst, Roper Industries, Inc. 

“Our experience has been that if you did not actually experience a loss, no law enforcement agency (federal or local) is willing to prosecute or investigate.”

—Steve Bentley, CFO, Avitus  

“We have had several instances of fraudulent checks caught by positive pay. Since we were reimbursed by the bank, the bank handled all prosecution because they were actually out the funds.”

—Donna Johnson, CTP, Assistant Treasurer, International Shipholding Corp. 

“One of the most frustrating things about check fraud is getting the attention of law enforcement. If the dollar amount of the crime is not significant or there is no real victim to the crime they usually do not give the case priority and in many cases will not take a report. One of your best tools for reporting fraud of any nature is utilizing your bank contact and asking if they can file a SAR on the actual activity. Just know that a SAR and its contents are confidential so unless you are contacted for follow up you may not ever know what really happens. “

—Shelly Heflin, CTP, CEO, 9X Data Services 

“I share in the frustration. Our positive pay and ACH fraud filter systems have caught numerous attempts at fraud against our accounts, and I always ask the bank if they go after the individual or report it and the answer is ‘no’. Why then are we surprised that this activity continues? That’s like not prosecuting someone for driving under the influence if they haven’t caused someone bodily harm.”


“In my career I was once a bank security officer. When this type of fraud occurs, such as counterfeit checks, usually it is a group that is involved. For example, someone gets a check cashed over the counter somewhere. Let’s say it is for $1,000. Check is presented for payment, and is caught by positive pay, the bank can report the fraud but who do you prosecute? The bank and you can investigate the check fraud, try to get film, usually the ID is fake, and someone has to be able to identify the perpetrator. Without someone to identify and if the dollar amount is not significant, (which in my experience had to be at least over $10,000 to get any attention) law enforcement will not do anything, they have other things to focus on.

“Only when someone committed a fraud against a relative, or it was isolated to be someone in the company who was committing a fraud, and the person could be identified, would I see law enforcement get involved when a complaint was signed by the relative or the company.”

—Holly Ryan, CTP, VP Treasury Management, Tri State Capital Bank 

Excerpted from the July 2011 issue of Risk.  

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All rights reserved.

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