U.S. Postal Workers Caught Stealing $40 Million in Treasury Checks
- Mail theft targets checks
- A huge amount of mail was recently stolen from JFK Airport
- It's been found to be an "inside job"
Another story of mail theft -- this time, an inside job.
NBC New York’s Gus Rosendale reports that several postal workers were arrested after being accused of stealing checks -- and, we're not talking about hundreds or thousands of dollars; these were U.S. Treasury checks worth millions.
Detectives with the NYPD tell us they were initially tipped off by a bank that red flagged suspicious deposits. And they ended up joining forces with federal authorities. And that joint effort led to arrests earlier today.
The suspects are accused of conspiring to steal more than 100 checks from the JFK mail facility, valued at more than $4 million. However, the entire scheme is estimated to total over $40 million.
Kudos to Breon Peace, United States Attorney for the Eastern District of New York, for his witty public statement:
"Criminals who cash in on checks stolen from the mail can expect to fill out change of address forms for the federal prison they will be calling home."
Big Time; Small Effort
How huge was it? Prosecutors believe it's the biggest theft that JFK since the famous Lufthansa heist in 1978, when about $6 million in cash and jewelry was stolen from the airport. Indeed, yesterday's "cash and jewelry" is today's "unsecured checks. Why bother with heavy lifting when stacks of checks are highly portable?
The important takeaway from this arrest is the fact that this is shows that stolen mail and checks are not a petty crime performed by a single fraudster, but more sophisticated crime operations -- aka organized crime. As noted in the press release from the United States Attorney's Office for the Eastern District of New York, 5 individuals are being charged in this elaborate scheme:
As alleged in the indictment, between at least June 2021 and August 2023, the defendants Kevaughn Wellington and Ky-Mani Straker engaged in a scheme to steal and sell Treasury checks intended for, among other things, individuals entitled to Social Security benefits, COVID-19 stimulus checks and tax refunds. Wellington stole parcels containing Treasury checks from the JFK Mail Facility where he was employed at the time as a postal worker. Then, together with Straker and others, Wellington sold the stolen Treasury checks for a cut of the profit.
As part of the scheme, Wellington and Straker stole over 125 Treasury checks valued at more than $4 million. Straker falsely endorsed and deposited stolen Treasury checks in a bank account and withdrew the deposited funds for his own financial gain.
What makes treasury checks difficult for financial institutions is that, while a FI is required to report a stolen check within a 60 day window to seek reimbursement, treasury checks do not follow the same policy. Many banks have reported treasury checks being returned years later.
From the information provided, it appears that Mr. Straker was able to deposit the checks into a single account, which should have set off red flags at the financial institution if they were utilizing a transactional analytics system. Furthermore, if the alleged conspirators had altered the payee on the check, image forensic AI would have flagged the alteration, particular if the fonts were inconsistent with the standard fonts used by the government.
While this may seem like an isolated incident, we have seen several different arrests in the past year that include a US Postal worker as a conspirator. It is reasonable to believe that there are many others that are perpetrating the fraud and law enforcement, FIs, and consumers need to work together to stop these criminals.