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Check Fraud: Understanding the Elements and Bad Actors

  • The web offers easy-to-acquire resources for fraudsters
  • Less knowledge and effort than ever is required to accomplish check fraud
  • Fraudsters often get caught because they flaunt their ill-gotten gains on social media

Infamous Ghost Money, a masked YouTuber whose channel about "fraud awareness and prevention" has been featured in our blog previously, recently discussed the "updated climate of check fraud" the way only Infamous Ghost Money can do it -- with a mask on.

He makes the point early that stealing is the easiest way to get the raw materials needed for check fraud. "Mail carriers are straight-up food for fraudsters right now," he says, mirroring our our blog post yesterday. "The USPS and lawmakers ain't doing much about it, so it's open season on these postal workers."

The Dark Web and Fraud

He also notes how the web and underground social media -- particularly Telegram -- have created a quick and easy path for new fraudsters to follow in order to get started:

Telegram has evolved to include lessons on how to cook up your own work, which is scammer talk for making fake checks. Now, cooking checks has always been a thing, but Telegram has allowed for these elite master chefs to offer their scamming culinary skills to others who would like to be the next Salt Bay of the check fraud game.

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In fact, it can hardly be called the "Dark Web" anymore, as Telegram is easily accessible and virtually mainstream. IGM goes on to explain how they actually sell simple-to-use templates to allow new fraudsters easy access to the tools they need to make fake checks with as little as a routing and account number -- it's practically a retail operation.

On-Site Fraud at the Bank -- Understanding the Elements and Bad Actors

Infamous Ghost Money provides a detailed description of both the elements utilized for fraud and the bad actors and their roles.

"Open-Ups" (also known as "drop accounts") -- accounts at the actual bank created for the sole purpose of "doing fraud" -- have been made simple to acquire, according to Infamous Ghost Money. They're opened using stolen or synthetic identities, and fraudsters make and sell them for anywhere between hundreds and thousands of dollars depending on the platform or information used. Fraudsters also create shell accounts to mirror a legit business, which are usually the ones sending the biggest checks.

Hackers will stop at nothing to gain access to your customer's accounts and funds.

Meanwhile, "Crash Test Dummies" -- people who are willing to do fraud under their own name on-site -- are effectively using underground social media like Telegram to advertise their services.

There are also "Walkers," described by IGM as elderly people who are recruited by fraudsters to walk in banks and cash fake checks in their names or against their accounts.

"This method is effective because, really, who's about to question grandma or grandpa about check fraud? Your mama raised you better than that," he notes.

Banks need to understand all the elements and the different roles bad actors play. Particularly when it comes to "Open-ups" or "drop accounts," it will be important to use business rules, thresholds, and behavioral/transactional analysis to monitor any new accounts. Since there will be no previous activity, it's important to start early in examining what transactions are being processed, utilizing technologies such as image forensic AI to analyze the payments being deposited.

Scammers Outing Themselves on Social Media

In terms of how these scammers are getting caught, it often comes down to the scammer themselves advertising their newfound wealth. We previously detailed case of the Nigerian scammer Hushpuppi who flaunted his money on social media with lavish trips and expensive cars -- which brought attention from investigators. This is no different than what many of the scammers are doing today on social media sites like Instagram.


All of these screams out only one thing - 'I'm scamming, please investigate me. -- Chick-fil-A is not paying that much. Stop playing!

He later adds, "At least try to make it a little difficult for the feds. C'mon now!"

While scammers are out there "flashing their cash," banks need to take the steps required to monitor these transactions, working with law enforcement to identify and bring to justice the account holders/scammers.

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