Mail Theft Related to Check Fraud

March 15, 2023

Mail theft-related check fraud generally pertains to the fraudulent negotiation of checks stolen from the U.S. Mail. Fraud, including check fraud, is the largest source of illicit proceeds in the U.S. and represents one of the most significant money laundering threats. This is a significant problem for the postal service and consumers.

Trends

Despite the declining use of checks, criminals have been increasingly targeting the U.S. Mail since the COVID-19 pandemic to commit check fraud.

• USPIS reports of mail theft from 2020-21 increased by 161%.
• Suspicious Activity Reports (SAR) for check fraud almost doubled from 2021-22.

Criminals target U.S. Mail to steal personal checks, business checks, tax refund checks, and checks related to government assistance programs, such as Social Security payments and unemployment benefits. These criminals include:

• Individual fraudsters
• Organized criminal groups
• Recruiters
• Check washers – Check washing involves the use of chemicals to remove the original ink on a check to replace the payee and often the dollar amount. Fraudsters may also copy and print multiple washed checks for future use or to sell to third-party criminals.
• Money Mules – Individuals (whether witting or unwitting) who transfer or move illicit funds at the direction of or on behalf of another.

These criminals, located throughout the country, target:

• USPS blue collection boxes
• Unsecured residential mailboxes
• Privately owned cluster box units at apartment complexes, planned neighborhoods, and high-density commercial buildings

After stealing checks from the U.S. Mail, fraudsters and organized crime groups will perpetrate fraud in a variety of ways, such as:

• Washing the check – replacing payee information and increasing the dollar amount.
• Producing counterfeit checks – using bank routing and account numbers.
• Selling washed checks to third parties on the dark web and social media.
• Creating fake IDs to match payee on the check.
• Cashing or depositing checks:
  • In person, ATMs or mobile/remote deposit.
  • Once deposited, funds are rapidly withdrawn via ATMs or wire transfers.
• Opening accounts to quickly transfer or withdraw funds.
• Using Money Mules to negotiate item or open accounts on behalf of criminals.
• Stealing Nonpublic Personal Information (NPI) from the checks to use in future scams.

Red Flags of Check Fraud

• Non-characteristically large withdrawals via check to a new payee
• Checks stolen from the mail and then deposited into an unknown account
• Mailed checks that were never received by the intended recipient
• Noticeably different check stock than normally used on account
• New, sudden, and abnormal check deposits and withdrawal or transfer of funds on an existing account
• Examination of suspect checks reveals faded handwriting underneath darker handwriting, giving the appearance that the original handwriting has been overwritten

Consumers can protect against Mail related Check Fraud in a number of ways:

• Limit the use of checks by using online banking and bill pay services.
• When mailing physical checks, take items to the post office and hand directly to postal clerk, instead of using drop boxes.

In the event you become a victim of check fraud contact your bank immediately. Bankers will assist you in blocking your account and recovering funds. The bank is also required to report to the Financial Crimes Enforcement Network (FinCEN) in certain situations. Also, report the incident to local law enforcement.

If fraud is specifically related to mail theft, report to the United States Postal Inspectors (USPIS) at 877.876.2455 or https://www.uspis.gov/report.

For more information on reporting all types of fraud, visit https://www.usa.gov/ for additional resources.