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FRAUD ALERT: With Counterfeit Financial Instruments, Everything Old is New Again

 


September 1, 2005

A fraud scheme involving counterfeit checks and money orders is speeding across the Internet, costing financial institutions and their customers thousands of dollars.

Domestic Postal Money OrderThe scheme begins when a scam artist, typically associated with a Nigerian criminal enterprise, goes on the Internet posing as a student or other person working overseas who needs your help cashing a check or money order. The scammer typically contacts you by e-mail, an Internet chatroom, or an online auction site.

You provide a mailing address, and the scammer sends you a check or money order with a request to cash or deposit it into your bank account. You’re told to keep some of the money as payment for your help and to wire back the remainder.

The catch? The money orders and the checks are counterfeit. They’re absolutely worthless.International Postal Money Order

U.S. Postal Service Money Orders are just the latest financial instrument used in the scam, which has long made use of bank drafts, cashier checks, and other brands of money orders. But the similarity ends there.

U.S. Postal Service Money Orders have security features that distinguish them from other financial instruments. Learning to recognize them will protect you from being victimized by the scheme. Postal Money Orders have special inks, watermarks, and security threads. The two most prominent security features can be viewed by holding the money order in front of a light source. Look for these features:

    Close-up of Benjamin Franklin watermark and security thread
  • A watermark of Benjamin Franklin, the oldest and one of the most famous signers of the Declaration of Independence and the U.S. Constitution, is visible on both the front and reverse side of the money order when held to the light.
  • A dark security thread running (top to bottom) to the right of the Franklin watermark, with the tiny letters “USPS” facing backward and forward.

The Postal Service issues domestic and international money orders. Domestic Postal Money Orders cannot exceed a value of $1,000. They are distinguished by their green, yellow, and blue colors. Most counterfeit Postal Money Orders are domestic, with a face value of $750 to $950.

International Postal Money Orders are printed in pink, yellow, and gold and cannot exceed a value of $700. There has been an increase in counterfeit international money orders printed with values of $500 to $700.

Fake letter of authorizationWith the cooperation and assistance of our law enforcement partners--especially U.S. Customs and Border Protection, the FBI, and local law enforcement agencies across the country, we have seized almost $21 million dollars in counterfeit Postal Money Orders prior to negotiation in the United States. We have seized an additional $74 million dollars in other counterfeit instruments, including cashier checks, bank drafts and non-postal money orders.

A new twist in the scam is the use of an authorization letter advising a financial institution that the sender is authorized by the U.S. Postal Service to negotiate the instrument. Don’t believe it—the letter is a fake! The Postal Service does not issue authorization letters, and the receipt of one should raise a red flag to financial institutions and potential victims.

Any information or questions related to counterfeit U.S. Postal Service Money Orders should be forwarded to the U.S. Postal Inspection Service.

This fraud alert has been issued by Paul J. Krenn, a United States Postal Inspector, and National Public Information Officer for the United States Postal Inspection Service. The Postal Inspection Service is the federal law enforcement and corporate security office of the United States Postal Service. Media and law enforcement inquiries may contact Paul Krenn at 202-268-2000. Consumer inquiries should contact their local Postal Inspection Service office for further assistance.

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