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From Your Attorney General, Darrell McGraw
Could you become a victim of a fake check scam or a wire transfer scheme?
Earl Walls, a 65-year-old disabled, retired factory worker from Wayne County WV, lost more than money when he was duped into a wire transfer scheme. On September 26, 2006, he was handcuffed, arrested and escorted out of a Wayne County bank. Mr. Walls thought he was handling payments from U.S. customers to an acclaimed artist Jack Russell, owner of an art gallery in England.
The scheme began when Mr. Walls was contacted on September 2 through an unsolicited e-mail and when he was offered a 10 percent commission for each check he processed. He believed he was responding to a legitimate job offer to act as a U.S. agent for "Jack Russell."
On September 15, Walls received a Federal Express package with six $500 traveler's checks and instructions to deposit the checks into his account and wire the funds to Anthony Orekoya, "Jack Russell's" "business associate" in Nigeria. According to Mr. Walls the transaction went smoothly. The teller asked no questions. He was given the cash, which he wired through Western Union to Nigeria.
Several weeks later Mr. Walls attempted to cash checks totaling $4,000. The bank informed Mr. Walls that the previous checks were counterfeit. This is when Mr. Walls was charged with 12 counts of counterfeiting, and his reputation shattered.
Mr. Walls' neighbor Felicia Adams contacted West Virginia Attorney General Darrell McGraw's office which assisted Mr. Walls in having the charges dismissed. Mr. Walls' bank accounts and monthly income were frozen when he was arrested. After numerous communications and verification that Mr. Walls was a victim of a consumer scam and not a counterfeiter, Attorney General Darrell McGraw's office was able to unfreeze his bank account and restore his monthly social security payment.
The U.S. Expedited Funds and Availability Act is one way banks can hold their customers responsible for fake check scams. When a consumer deposits a check into their bank account, the bank is actually "fronting" the money until the bank collects the funds from the issuer of the check. This is a system that is upheld by both the trust of the consumer and the bank in which both parties believe the check deposited is genuine. This law limits the time period a bank can "hold" a check that is written for less than $5,000. Money deposited from cashier checks, money orders and government checks must be available to consumers by the next business day. Money deposited from corporate or personal checks cannot be held for more than five days.
Attorney General Darrell McGraw wants consumers to be aware even when funds from these types of checks are "made available," it does not mean the check deposited has actually cleared the bank no matter what a teller or bank declares to you. Collecting funds from the check issuer can take 10 days or longer.
If the teller in Walls' situation had taken a few moments to examine the checks he was cashing, the teller would have discovered they were counterfeit. According to Attorney General Darrell McGraw, some of the checks had no signature and they all had fake routing numbers.
Fake check schemes that transfer funds by wire also link such victims to other types of scams. These fraudulent activities include lotteries, sweepstakes, and overcharges from online auctions, sales and deception through the internet including employment and dating websites. Most of these scams originate in Africa, East Asia, and Eastern Europe. Consumers of all ages should take precautions to protect themselves. Senior citizens should take even more care.
If you have any questions or difficulty resolving issues concerning counterfeit checks or scams, remember that you can always speak with a mediator in the Attorney General Darrell McGraw's Consumer Protection Division by calling 1-800-368-8808.
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