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Sunday, June 06, 2004

Rockford Register Star - Rockford's Newspaper and Website - Local & State News

Rockford Register Star - Rockford's Newspaper and Website - Local & State News

Following the paper trail in check scam

By CORINA CURRY, Rockford Register Star
>> Click here for more about Corina



ROCKFORD -- Javier Santos Suarez, Misael Sangabriel Alarcon, Leonel Bello Leon and Rogelio Ramos appeared to be hard-working young immigrants, bringing home paychecks for nearly all of 2003 for jobs ranging from light manufacturing to flipping burgers.


An eight-month trail of bank receipts tells the story of four men traveling southern Wisconsin and northern Illinois, hopping from job to job to earn a living. Federal court documents tell a different tale.


While Santos Suarez and his so-called co-workers stood in lines on payday at banks, currency exchanges and other check-cashing businesses, holding official-looking paychecks and photo IDs -- there were no long days at work. Nothing was earned.


The payroll checks were fake, manufactured with identical typefaces, paper quality and bank routing numbers as legitimate paychecks from the companies where the men supposedly worked. The IDs were fake, too -- resident-alien cards linking some of them to as many as eight aliases.


At times, one investigator said, it was hard to tell which names were made up, which were real and who was whom.


Law enforcement agencies in more than 20 cities conducted independent check-scam investigations for months before their cases were woven together in a 32-page affidavit filed by FBI bank-fraud specialist Johnathan Rouske.


Federal authorities brought charges March 9 against Santos Suarez, Sangabriel Alarcon, Bello Leon and Ramos for their alleged multistate path of deceit.


In the affidavit, Rouske says that from Jan. 17 to Sept. 19, 2003, a traveling group of Hispanic men and women took counterfeit payroll checks written on the accounts of more than 20 Wisconsin- and Illinois-based businesses, walked into nearly two dozens places that would cash them and walked away with more than $720,000.


To avoid detection, police say, the group hit small-town banks in places like Poplar Grove, Genoa and Marengo; currency exchanges in Rockford and Beloit; and family-run Mexican grocery stores in Crystal Lake and McHenry. They avoided large institutions, secured high-quality fake paychecks and studied the intricacies of a business' work force: how much they made, when they were paid and where they would go to turn their paychecks into cash.


"What the people in these groups do is very devious," said Master Sgt. Phil Beu of the Boone County Sheriff's Department. "To see what these people can develop and do, it's unbelievable. If they spent as much time doing good versus evil, they could all have fairly decent jobs and make the world a better place."

Increasingly popular scam

Law enforcement officials say check scams like this one are becoming more common, thanks to technological advancements that allow people with enough computer know-how to manufacture counterfeit payroll checks with dead-on accuracy.


Authorities say dozens of scam-artist troupes operate in nearly every region of the country at any given time, drifting through small towns like modern-day gypsies leaving behind a string of unpaid bills and phony check stubs.


The four men share among them 32 counts of bank fraud and possession of counterfeit checks for the purpose of deceiving financial institutions. They face up to 30 years in prison and a fine of up to $1,000,000 for each count of bank fraud and up to 10 years in prison and up to $250,000 in fines for each counterfeit charge. Only one of them is in custody.


The four, as stated in Rouske's affidavit, were linked to their aliases and the crimes through surveillance photos, fingerprints, previous arrest information and copies of resident-alien ID cards made at some places that were defrauded.


Police say their investigation is ongoing, and they'd like to see more of this extensive underground check-scam network brought to justice, if not in federal court than in state courts.


Assistant U.S. Attorney Keith Syfert would not comment on the case because it's a pending prosecution.


Just last month, four men, all illegal immigrants from Mexico, pleaded guilty and were sentenced to four to 18 months in prison for similar scam they were involved in from February 2001 to May 2003 in Illinois and Wisconsin. Police are looking for a fifth man.

Call from Piggly Wiggly

Jeff Davis had seen his fair share of school fights, DUIs and sex-abuse cases in his eight years as a police officer in Fort Atkinson, Wis. He had never seen the likes of an elaborate, well-coordinated payroll scam until Aug. 3, 2003, when the owner of the Piggly Wiggly grocery store called for help.


After learning that unfamiliar men and women just cashed paychecks worth nearly $3,000 from a local company, the store owner -- a target of a check-cashing scheme a couple of years ago -- rushed into the parking lot and jotted down two license plate numbers.


Moments later, police stopped one of the vehicles, which was occupied by four Hispanic men. In the vehicle, police found a payroll check from the same company payable to a Gerardo Flores, an alias used by the car's driver, Bello Leon. They also found an application for a Department of Motor Vehicles ID listing an address in Madison, Wis. Police went there and found the other vehicle that the store owner saw speeding away from the Piggly Wiggly.


Two days later, Madison police searched the address, Davis said. Inside, they found 11 Hispanic men and women, multiple forms of false identification and a handwritten list of names, telephone numbers and addresses. Seven of those names had been used during the past six months to cash counterfeit checks in northern Illinois and southern Wisconsin.


The names were aliases being used by Santos Suarez, Sangabriel Alarcon, Bello Leon and Ramos. Police took pictures of everyone and started matching the faces with images from surveillance video across the Midwest.


"To me, this was a big deal," Davis said. "We're a small jurisdiction up here. We don't get this type of thing very often. When we learned what that search warrant recovered, I thought 'This is something that has to end.' The amount of money these people were getting away with was unbelievable.


"They would use different people if they could, give them IDs and checks to cash. They knew certain places to go to to cash the checks and what times to go. Once it worked, then they go back. They'd change clothes, change hats, sit in different places in the car, go to a different teller."


Because the counterfeit checks were of such high quality, Davis suspects that the checks were purchased. He believes someone in the scam network obtained a legitimate check from an employee, either by stealing or buying it, and shipped it off to be duplicated.


"They're good counterfeits. If you looked at it, you'd think it was good and cash it," he said. "The companies sometimes wouldn't learn of the fake checks for a month. Then they'd tell the banks. By that time, these guys are long gone."

The victims

The real victims are the banks and check-cashing businesses that have lost thousands of dollars -- money that they probably will never see again unless they carry the proper insurance.


To make matters worse, Davis said, many people caught in such scams are illegal immigrants. They're prosecuted, serve their time and are deported. They tend to come back to the United States, but not to pay. They often come to steal again.


That doesn't sit well with Daniel Perez, manager of one of the scam's targets, the La Rosita Grocery. Two La Rosita locations in McHenry County were bilked out of $21,000 in three days last summer.


"We were very mad," Perez said. "After that, our bank stopped accepting checks from us. Only cash."


So La Rosita made some changes of their own. They only cash checks for people they know and only local checks. They ask for multiple forms of ID, too.


A run-in with last year's fake-check group that ended in a net loss of about $19,000 had a similar impact on the owner of three Rockford-area businesses.


"It's a sign of the times we live in," said Marty Cielesz, who operates currency exchanges on Kishwaukee, Charles and West State streets. "In our business of cashing checks, you have to always be aware of what could go wrong. This has become a very sophisticated and lucrative crime. ... These guys who came through here -- they were very good."


To stay a step ahead of them, Cielesz trained his tellers to put an added emphasis on getting to know their clientele and putting information about their customers into a computer database.


"Ninety-nine-point-nine percent of our customers are hard-working people who need to cash a paycheck. It's that 0.1 percent that you have to worry about," he said. "Every business has its risks. You just have to try to minimize them."


Businesses can protect themselves by not accepting resident-alien cards as a valid form of ID, paying attention, taking extra precautions and educating themselves on how these groups work, police advised.


"Be particularly careful if you're in an out-of-the-way, somewhat-small town, somewhat near a major interstate," Davis said. "That's where these groups seem to operate."


Sgt. Bruce Scott, in charge of the forgery and general case unit of the Rockford Police Department, said banks and check-cashing businesses need to get more guarded.


"People have to pay attention. Look carefully at driver's licenses. Check the appearance of the check. Check for misspellings. Make sure signatures match," Scott said. "Call the business named on the check if you have to."


Banks and business also should be leery of large groups of people coming in at the same time with checks from the same place.


"Times have changed so much," Beu, the Boone master sergeant, said. "Unfortunately, everybody needs to be more cognizant of what's going on and be more insistent on what is needed to cash a check. ... If something's out of the ordinary, what does it hurt to write down a few license plates or make copies of IDs?"

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