Mail Theft & Check Fraud Victims: Individuals, Businesses, and now Congress?
- A financial contribution to a California congressman was stolen from the mail
- Both Republican and Democrat government figures and organizations are facing postal thefts
- US Government and USPS efforts are not enough
Rep. Ken Calvert, a Republican congressman from California, spotlighted the increase in mail theft/check fraud. He put his money where his mouth is and introduced legislation that would double the penalties for those convicted of stealing from the U.S. Postal Service.
Now, in an ironic twist, an article from Raw Story reports that Rep. Calvert's very own leadership political action committee — Eureka Political Action Committee — experienced an "unauthorized expense" worth $9,900 in late August, according to a filing with the Federal Election Commission.
Calvert's committee told federal regulators that it believes someone stole a check while it was in transit in the U.S. mail, which the thief "recreated and cashed to an unauthorized entity."
The Eureka Political Action Committee filed a police report and a fraud claim with its bank, Wells Fargo, it told regulators. It added that the thief was not believed to be "an internal bad actor."
In other words, the theft was perpetrated somewhere in the "postal pipeline" -- the very kind of theft Rep. Calvert was addressing with his proposed legislation.
Calvert's committee, which ended September with just short of $35,000 cash on hand, has not yet recouped the lost money, but expect to eventually get it back through the fraud claim process, Calvert chief of staff Rebecca Keightley told Raw Story.
In the meantime, "we have changed mail practices for any checks over a certain threshold will be sent via FedEx and for those under the threshold, checks will be wrapped in paper so as to better disguise the content of the mail," Keightley said.
She added that because "mail-related check fraud is a rising problem," the nation needs "stronger penalties in place for those breaking the law" and that the U.S. Postal Service "needs to increase security of mail practices."
Not the First, and Won't be the Last
Rep. Calvert's Eureka Political Action Committee is not the first political committee or figure to be a victim of stolen mail/check fraud. The article notes a substantial number of impacted political figures and organizations from both sides of the aisle.
In September, "an unknown individual created, forged and cashed a fictitious PAC check in the amount of $2,000," the federal political action committee of the Exelon Corporation, the nation's largest power utility company, wrote to the FEC last week...
...Political committees for Rep. Alexandria Ocasio-Cortez, banking giant Goldman Sachs and the Oregon Republican Party are among the latest to get jacked.
These committees admit that their security protocols are flawed, and that much of the money stolen has not yet been recovered despite the efforts of law enforcement.
Government's Effort to Curb Mail Theft/Check Fraud Not Enough?
We've covered efforts by the US Government and the United States Postal Service to curb the stolen mail/check fraud trend. Several political figures have pushed new legislation such as the USPS Subpoena Authority Act and the Ensuring the Safety Our Mail Act. Additionally, the USPS is currently replacing older blue mail boxes that utilize "arrow keys" with new electronic lock mechanisms.
All these actions by the government and USPS enough? According to Frank Albergo, National President of the Postal Police Officers Association, the answer is a resounding NO.
In a recent LinkedIn Post, Mr. Albergo details on of the most recent failed efforts by the USPS:
On October 25, 2023, the United States Postal Service (USPS) and the U.S. Postal Inspection Service (USPIS) provided an update on the Project Safe Delivery campaign which is meant to crack down on postal street crime. Remarkably, the Inspection Service’s uniformed division—the Postal Police Force—plays no part in Project Safe Delivery.
Here’s a closer look at Project Safe Delivery:
USPS states, “Law Enforcement Surges Completed In Chicago, San Francisco, Ohio.”
The USPS OIG found that as a result of the USPIS surge operation in Chicago — only two [2] federal arrests were made. This is not a typo — only TWO federal arrests were made. USPIS surge operations were also conducted in San Francisco and yet, the media has already reported 8 robberies of letter carriers in San Francisco since October 1, 2023. So much for USPIS surge operations being effective.
What Will Curb Mail Theft/Check Fraud?
You may be asking yourself: "So what will stop these criminals?" While the answer isn't clear, we do know have some history to reference.
Back in 2014/2015, credit card fraud was leading the way in terms of attempts and losses. The industry made a bold move, enforcing the utilization of EMV chips, making the payment channel more secure. Fraudsters moved on to a different, less secure payment channel -- you guessed it, paper checks. While the shift was not immediate, over the next 3-4 years, check fraud grew drastically, hitting its tipping point over the last few years.
It only makes sense that financial institutions secure this payment channel. When fraudsters face frustration in their efforts to extract money through fraudulent checks, they will be less likely to exploit that payment channel. This is why financial institutions are bolstering their check fraud detection strategy by deploying image forensic AI to analyze the images of deposited checks for indicators of counterfeits, forgeries, and alterations. Combining this technology with other solutions like transactional analytics creates a strong defense against fraudsters -- which will help deter them from future attempts.
This is one of the many steps to solving the mail theft/check fraud challenge.