Workers beware: Watch out for variations on counterfeit check scam
Disabled woman thought she had found the perfect job, but when federal agents came knocking on her door, she realized ‘it was too good to be true’
Jodi Hubler was scrolling through job ads on her computer when she hit the jackpot.
“Payroll,” read the ad. “Work from home.”
It seemed like a perfect position for Hubler, a former legal secretary who is disabled, to do from her Loves Park home northwest of Chicago.
She applied, and after some text and online conversations with the firm’s boss, Hubler got the job in October 2017.
“I was elated,” Hubler says. “It was too good to be true.”
The guy who ran the payroll business called himself “Devon Hockensmith.” He said he was based in Atlanta.
He sent Hubler funds to purchase a printer and supplies and trained her to print paychecks for an army of independent contractors the firm had lined up. Hubler spent her days poring over spreadsheets and mailing checks that were drawn from major banks.
Months later, with federal agents knocking on her door, Hubler would realize the job wasn’t what she thought it was.
But in the beginning, it seemed like a way to be productive and earn a little money.
“I’m disabled. I was looking for kind of a cash job that I could do on the side,” says Hubler, 44, who has since moved out of state. “It just seemed so legit.”
A job becomes a scam
Hubler didn’t realize it right away, but her work-at-home job was part of an array of counterfeit check scams that have stolen billions of dollars from Americans in recent years, according to a Better Business Bureau study released this fall.
This type of fraud is growing, with complaints to the Federal Trade Commission’s Consumer Sentinel database and the Internet Fraud Complaint Center more than doubling between 2014 and 2017, from 12,781 to 29,513 — though experts say the numbers are vastly underreported because many victims are too embarrassed to complain.
At first, Hubler’s job was hum-
ming. Her boss’ firm was doing customer service evaluations for a major retailer. Hubler’s role was to send instructions and checks to people who had signed up to work as secret shoppers to do store evaluations.
The secret shoppers were told to deposit the checks, for $1,780, in their bank accounts, deduct their $300 pay and use the rest of the funds for the store tests.
The assignment: Buy about $60 worth of products and then test the in-store money transfer service by wiring $1,400 to a company representative.
Of course, the whole thing was a scam. The checks were fakes.
By the time the checks bounced, the secret shoppers had already wired real money to the scammers — funds for which they were on the hook to their banks.
“Devon Hockensmith” disappeared. Now Hubler thinks he was never even in the country.
‘Mules’ move scam money
Counterfeit check scams such as mystery shopper frauds are usually directed by overseas criminals, though there are some operating inside the United States, says Steven Baker, former head of the Federal Trade Commission in Chicago and now an investigator for the Better Business Bureau. Nigerian scammers have become especially adept at check fraud, he says.
“Most of them don’t get caught,” Baker says.
The scammers use fake email addresses and spoofed phone numbers with U.S. area codes to make it appear they are in the United States.
And they hire U.S. citizens as unwitting money mules to mail the checks to victims.
The scammers use real checks that are stolen from the mail or swiped by corrupt bank employees to create the graphics files that are downloaded by the mules and printed on paper check stock.
These counterfeit checks have real bank routing numbers and account numbers, so most banks won’t catch them right away.
“It seems really legitimate,” says Nicholas Bucciarelli, a postal inspector in Chicago who has worked counterfeit check cases. “It’s on nice business paper, it’s got all these names and phone numbers.”
Bucciarelli adds that the mules create an extra layer between the victims and the scammers, making the perpetrators harder to catch.
Checks haven’t ‘cleared’
The criminals running the scams count on the fact that under U.S. banking rules, funds from a deposited check must appear as “available” in the depositor’s account almost immediately. Despite this, the check won’t have “cleared” until it has been validated by both banks, a process that can take a couple of weeks.
It’s during this time lag that the scammer persuades the victim to wire funds, or in some cases purchase gift cards for the scammer.
Average consumer losses to counterfeit check scams are about $1,200, according to the BBB report.
Hubler says she made about $700 every other week in the couple of months she printed and mailed checks and information packets to the people who’d signed up as mystery shoppers.
In the end, though, her boss stiffed her out of $400 she had spent on an additional printer — money that was supposed to be reimbursed.
Hubler says the first sign something was amiss came when her boss, who had pre-ordered boxes of Priority Mail envelopes for her to use, started insisting that she drive to several different post offices to mail some at each place.
He would berate her if she went too slowly.
With all that mail, Hubler soon drew the attention of local postal officials. Eventually, three agents from the U.S. Postal Inspection Service showed up at her door and said she was involved in a scam.
“I was so scared,” says Hubler, who has cooperated with authorities, though no arrests have been made. “I was worried to death that I was going to get in trouble.”
Consumer education needed
Though the scammer in Hubler’s case has not been located, authorities have had other recent successes going after counterfeit check scammers.
In July, a Nigerian man in Louisville was sentenced to 15 months in prison for a sweepstakes fraud that included mailing fake checks to victims.
And in August, another man was indicted in Pittsburgh for a mystery shopper scam in which he sent counterfeit postal money orders to victims.
In October and early November, the U.S. Department of Justice made a big push targeting hundreds of alleged money mules in 65 federal districts involved in a variety of scams. FBI agents and postal inspectors sent 300 warning letters to individuals who had recently served as mules, warning them they could be prosecuted if they continued aiding scammers.
Often, however, mules are not prosecuted because they, too, have been victimized, experts say.
For example, a common ploy in online romance scams is not only to bilk the lonely victim but to persuade him or her to unwittingly be a mule for other scams, such as check frauds.
“It’s hard to charge somebody who doesn’t have the intent,” Bucciarelli says. “They’re actually being set up or they’re being tricked into doing this.”
Given the difficulties in catching counterfeit check scammers, consumer advocates say the best tactic is education.
Consumers should be wary of anyone who asks them to deposit a check and immediately wire money or purchase gift cards.
“There’s no such thing as easy money or get rich quick,” Bucciarelli says. “If it sounds odd, it’s probably a scam.”
Hubler says she wishes she would have slowed down for a moment and realized it was too good to be true.
“I fell for this,” she says, “but I want people to know that they should watch out for this stuff.”
“I’M DISABLED.
I WAS LOOKING FOR KIND OF A CASH JOB THAT I COULD DO ON THE SIDE. IT JUST SEEMED SO LEGIT.”
JODI HUBLER, whose work-at-home job was part of an array of counterfeit check scams