"Legal" Scams

[Imalawman]

I've seen a rash of suspicious transactions where someone offers to buy land, stock, etc. for say $5 million. As part of the agreement, the seller will pay a placement fee or some other kind of fee back to the buyer. The transaction usually involves foreign payors. So, at closing, they will have a foreign certified check for the full amount - $5 mill. The seller will then give a check for $300,000.00 for various fees. The bank initial clears the check, but only to find out that it is in fact a phony check. Thus, the buyer is enriched to the tune of $300,000.00.

It has become increasingly common to get these suspicious transactions. They are much more sophisticated than the spam emails from Nigeria. However, they are almost always are unrepresented buyers. To prevent against this, we require that the check clear the bank and the funds are assured to be in our account before proceeding in transactions similar to this. We have even made the bank take responsibility for any error that may occur - this tends to make them very particular about assuring the validity of any checks.

If anyone has tips for identifying this type of scam or additional experience with it, I would be interested in hearing about it.

[notorial dissent]

What part of “certified check” or “foreign certified check” isn’t a tip off to start with?

In this day and age, who in their right mind deals with certified checks for something like this, and particularly coming from a foreign bank? You might as well be accepting a sight draft. Not when the money can be wired within 24 hrs and then you know you have good funds. Unh uhh, not a good sign, not a good sign at all. This is nothing more than a gussied up version of the you be my payment processor for 10% of the checks deposited scam, except that all the checks are fakes, or the we’ll buy this from you, but they send a check for more than the purchase and expect you to send them the difference along with the merchandise so they can screw you twice.

I speak from personal experience here, one of the brokerages I worked with got repeatedly screwed because they would accept large checks for deposit, and then instead of waiting for them to clear, when the account agreement very plainly said that wasn’t acceptable, and the managers would clear them, and then sure enough they would bounce and we’d be out the money, since it was of course long gone by the time our security department got hold of it or could do anything about it. They wouldn’t even make copies of the big checks so they could be looked at as a security item, so I didn’t feel too sorry for loss prevention when it happened, particularly after we had complained about it repeatedly.

[Lambkin]

These are not legal scams. There are a few ways it turns out, here are two:

* The mark provides sufficient information for the scammer to clean out their bank account.

* The mark is asked to pay a fee required to release the mountain of money.

In some ways it is amazing that anyone can be conned this way, but it happens all the time and as usual the victim's greed is the common thread.

[notorial dissent]

CKB, 1 would certainly have been my/our preferred solution, it certainly should have happened, however, they wouldn't listen to anything we said, so it didn't get resolved, and it kept right on happening.

2. by the point we knew what had happened, it didn't matter, the money and the con artist were long gone, to the best of my knowledge they were only able to catch up with a bare handful of them, and never recovered a dime.

Again, as I say, loss prevention refused to listen to us so it was their problem, and they didn't get any sympathy from us when it happened.

[JamesVincent]

I really do have to laugh hearing some of this. When I was a contractor at the Baltimore Sun and the Chicago Tribune bought it my bank put a hold on all of our checks. Since we got paid once a month for roughly around $6k and it was coming from an out of state bank (Bank of Chicago IIRC) M&T put 30 day holds on our checks. Took all of us quite a while to get our banks to release that hold so we could actually pay bills and help and have gas. So if they were allowing that kind of check to go through and we couldnt get our checks cleared from a known company through a known bank while being known customers, theres something wrong in Muddville.

[notorial dissent]

CKB, the "little" company I worked with for a time got the better of BofA in twice in financial transactions, and briefly considered buying them at one point when they were thinking about buying a bank, and decided they could find better ratholes to throw money down and let Nations swallow them up, and you can see how well that worked out. Just because a company is big doesn't mean they can't be stupid, and very often are, they each have their own ways of expressing it.

[notorial dissent]

Actually the stock answer we usually got was "it costs too much" for just about anything that ended up costing us buckets of money in the long run.