As of Thursday, Dec. 28, the Albany County comptroller’s office had been notified that the county had been the target of two attempts to defraud it of hundreds of thousands of dollars through fraudulent checks discovered in India and Malaysia. News of a third fraudulent check, this time in Pakistan, surfaced on Friday, Dec. 29.
Ernesto Anguilla, who handles New York media relations for the Bank of America, said the bank could not comment on its clients’ accounts or whether any money was paid on the fraudulent checks. Because the bank caught the fraud, the county would not be responsible if the funds had been paid out.
The county does not have a loss on this chain of events, said Albany County Comptroller Michael Conners.
In mid-December, Deputy Comptroller Billy Curran was told by Bank of America that an individual had attempted to cash a counterfeit county check on Monday, Dec.18, in the amount of $153,000, at a bank in India.
The fraudulent check, dated Nov. 30, was made payable to M. Raja Paranthaman. An address on the check lists Paranthaman’s address as Tamil Nadu, India.
Bank of America detected the fraud because the check number was the same as a check issued to a county elections official in September for $125. Bank of America then contacted the Albany comptroller’s office to make them aware of the fraudulent activity.
After checking records, the county told the bank to not honor the check.
A week later, Curran was contacted again by Bank of America, indicating that the bank had found another check, this one in the amount of $150,000.50, that again had an identical number to a check that had been issued to a county elections official. This check, also dated for Nov. 30, had been deposited at a Malaysian bank on Dec. 26.
This check was made payable to Mat Noor Bin Sallah, who listed an address in Malaysia on the check.
The most recent fraudulent check was written in the amount of $35,000. This check was made payable to Shahbaz Ahmed, whose listed address was in Pakistan. Once again, Bank of America notified the county.
The fraudulent checks are nearly identical in appearance to the original county checks except the counterfeiters had changed some numbers on the checks, and removed the strip indicating that the check contains security features. The counterfeiters did not change the check numbers on either of the checks.
The county is keeping private the names of the county elections officials who had received the original checks.
On the first check the bank discovered, there was a discrepancy between the numerical dollar amount of $153,000.89 and the typewritten amount that read `One hundred and fifty-three thousand dollars and 50 cents.`
Upon being notified of the scams, the county comptroller’s office contacted the FBI to begin an investigation.
It is unclear at what point the checks could have been taken by the counterfeiters to be altered.
Conners said he is concerned that this could happen again, and added that there were other checks that were issued to county elections officials at the same time these checks were cut. Conners said the authentic nature of the checks bothers him.
`When you look at the fraudulent check, it actually looks like a better check,` he said.
The check was probably scanned into a computer software program and printed. This is something, said Conners, that `someone with an eighth-grade education and a $700 computer` could do.
In addition to the concerns surrounding the possibility of more fraudulent checks appearing, Conners said he was dismayed with the county’s current safeguarding system. Currently, on each check, the county’s system allows bank technology to verify the date, check number, and amount on the check before the bank dispenses any funds.
A system called Payee Positive Pay takes this a step further by allowing the bank to verify the payee’s name on every check. This is the system Conners said he would like to see implemented, and doesn’t understand why it hasn’t been.
`They could turn the key on that this afternoon,` he said, of the county’s division of finance.
Conners said that he hoped after these recent scams, the finance department would `come to its senses.`
`My concern, of course, is Albany County taxpayers don’t get caught holding the bag,` said Conners.
Conners said he was also worried that the county’s insurance against these fraudulent activities was inadequate.
`My concern is the two checks alone are over $300,000,` he said, adding that the amount is greater than the insurance the county has.
Charles Bruce, director of the National Check Fraud Center, said the county was lucky it was not held responsible for the fraudulent funds.
`Should the bank have paid these monies, it would have been hell getting these monies back from international banks,` Bruce said.
Bruce, whose center handles an average of 1,600 cases per day, speculated that the county could expect more problems in the future.
Usually in situations like these, said Bruce, the checks are obtained in the United Stated, passed around the country and then deposited overseas. In these situations, said Bruce, typically the checks are taken from either the mailroom or the local post office annex.
In this case, the elections officials received their checks and both were deposited in two local banks.
Conners speculated the checks could have been taken from anywhere.
`You hope it didn’t occur at the county, but it could have. You hope it didn’t happen at the bank, but it could have,` said Conners.
Charles L. Williams, an expert witness in check fraud and check forgery, said cases of this magnitude are special, and often harder to break than small-scale operations in which someone like a bookkeeper may make checks payable to themselves.
`Two of the real key questions are, how did this happen and who the bad guy is,` said Williams.
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