Here’s another clever idea made possible by new technology. Crooks today can go to a junkyard and find a late-model Lincoln Continental that had been totaled in an accident and buy it for one thousand dollars. The car is such a wreck that they can’t even drive it, so they tow it to their home. They say, “Why don’t we go down to the credit union and get a loan against the car? They’d give us twenty thousand dollars on it easily. We give them the car title for collateral, they give us the loan. The car title doesn’t say the car is a wreck [only recently have some states started issuing different titles for damaged cars]. A week later, we’ll default on the loan. We’ll go to another credit union and get another twenty thousand dollars. Then we go to another, and another. In just a few trips, we’re out of here with one hundred thousand dollars from a car that won’t go around the corner.” One of the crooks might wonder, “But how could we get another loan when we gave the first credit union the car title?” And one of the others will reply, “I didn’t say give them the car title, but give them a car title, a copy that we make.”
Five years ago, that was impossible to do, because in all fifty states car titles had to be intaglio engraved. In order to reproduce the engraving, it would take at least a half million dollars in equipment and considerable skill. Today, with a digital copier, I just place the car title on the machine, put a piece of paper in the cassette, and make a copy. I pick up the copy, put it back into the cassette, make another copy, and then another and another. Each time I make a copy I’m building up toner over toner over toner over toner. After the fifth copy, I have the exact raised lettering, the exact engraving, the exact seal of the original. And that’s why con artists regularly pull off precisely the scam I described above.
MALL MADNESS
You go to the mall nowadays, and invariably, some guy will ask you, “You want to buy a gift certificate for the mall?” So you take one for two hundred dollars. He asks you what name to put on it. You tell him that you don’t know who you’re going to give it to, just leave it blank. You go home, type in a name, make fifty color copies at the local copy shop, and return to the mall. Companies that issue gift certificates vastly underestimate the quality of color copiers. Most gift certificates can be copied without a single telltale sign. In fact, in many cases the color copies actually look sharper and brighter than the originals.
These new mall gift certificates are wonderful, because they’re honored at virtually any store in a mall, as well as any store in other malls handled by the same management company. This is a great consumer benefit, and a great criminal benefit. A criminal will go to a mall in Miami, buy a gift certificate, make a hundred copies, and spend that same gift certificate in New York, Los Angeles, Atlanta, and fifty other malls around the country. What a terrific way to travel during the holidays!
During the Christmas rush period, harried and inexperienced sales clerks haven’t a prayer. So you take your $200 gift certificate to the Gap, buy some $50 jeans, and get the $150 change in cash. You go to the frame shop, buy a $28 frame, get the change in cash. One of the things criminals love about gift certificates is they’re as good as cash. Most stores are happy to give cash when making change after a purchase. And since many companies reconcile their gift certificates only on a sixty-to-ninety-day cycle, criminals have plenty of time to complete their holiday shopping.
The security people at the malls call me all the time and say, “Hey, the mall’s getting killed. Thieves are hitting us with all these color-copied gift certificates.”
I tell them, “You have to put out a bulletin to all your store managers about the names on the gift certificates.”
“Uh, we don’t put names on them.”
“Well, you need to send a bulletin out about the serial number of the gift certificates,” I say.
“Uh, we don’t put numbers on them.”
“Well then, you need to tell me where you’re calling from so I can come and buy some of those gift certificates.”
Remember, if they have value, they’ll copy them.
SHOP ’TIL YOU DROP
Con artists have a particular fondness for store receipts. They’re a living in themselves. I was once visiting with the head of security for one of the big discount chains, and he was telling me how incredibly secure his stores were with all their cameras and gadgetry. “Really,” I said. “Well, let’s see.” I walked with him outside the store entrance, rooted around in the trash receptacle there, and fished out a receipt. Customers are constantly throwing away their receipts as soon as they leave a store. I examined the receipt and noticed it included a toaster oven. So I went with the security head to the small appliance area and picked out the same model toaster oven. I told the security director, “Now all I have to do is go to customer service, tell them I just bought this and need to return it, and I’ve just conned the store.”
Criminals aren’t content to just go with what they find in the garbage, and so naturally they make their own fraudulent receipts. Several years ago, Macy’s had a nagging problem with criminals. Armed with fraudulent receipts, the criminals went to the store, picked out the items they had listed on the fake receipts, and then returned them for cash. The clerks at Macy’s had no way of distinguishing a real receipt from a counterfeit one. I was brought in and redid the receipt by adding “Macy’s” on the back in thermochromic ink. Rub your finger over the word and the body heat causes it to disappear. Macy’s trains all of its help to check receipts with their fingers, and the problem has been cured.
A few years ago, there was a guy who drove all over the country in a white Cadillac who had his own inventive scam. One of the big store chains would regularly put its fine jewelry on sale for 50 percent off. This guy would anticipate these sales and go in and buy a necklace or bracelet at full price. The chain had an arrangement where, if you had bought an item of jewelry just prior to the sale, you could come in with your receipt and it would give you the difference back in cash. First, he would take his receipt to a local copy shop and make two hundred copies. Then he’d return the necklace and hit the road. Whenever he encountered another store in that chain, he would bring in one of his fraudulent receipts and get a refund of half the price. He didn’t need to show the necklace, just the receipt. He did this for years. He’d park his Cadillac illegally in the fire lane outside a store, dash in, collect his cash, and head to the next store. Eventually, the chain figured out how to stop him. It ceased offering the cash-back arrangement.
Some of the techniques used to fleece businesses are surprisingly simple, but they can be raised to the level of art by rings of criminals. If I had to anoint the King of the Receipt Scam, it would be Rondal Vickers. Vickers is a sixty-two-year-old Florida man, and an Air Force veteran with a generous white beard. He goes by the name Santa Claus. It’s an unlikely nickname, since he was the ringleader of a crime group composed of as many as twenty thieves known as the Vickers Gang. For more than thirty years, it carried out an elaborate refund scam that was reliant on counterfeit receipts and UPC labels. (In their spare time, the gang indulged in gift certificate fraud and insurance fraud, once collecting insurance claims six times on the same Corvette.)
Santa Claus pretty much had theft in his blood. He got started as a checkout cashier at a Winn-Dixie and augmented his paycheck by never ringing up purchases of beer. Whenever someone had beer mixed in with his groceries, he would pretend to have forgotten to ring it up, hit “no sale” on the register, and then ask for the amount, which he pocketed. From that beginning, he built a formidable organization. One of the masterminds was a fifteen-year-old runaway named Jodi Vickers, who became Santa Claus’ wife. The gang traveled all over the country, generally in “sprees” lasting six to eight weeks, and then they would return to their home base in Florida until they needed to steal some more money. They preyed on the national mass-market retail chains like Wal-Mart, Kmart, and Target. Santa Claus was particularly fond of Target, because it kept enhancing its security in order to foil him. To feed his eg
o, he relished the challenge of beating the toughest system, so he’d often send his soldiers to the other chains and devote his own devilish energies to Target.
The Vickers Gang had multiple scams in its arsenal, but its most common dodge was something it referred to as “marking down.” Members of the gang would visit one store in a chain and identify a sale item. For instance, they’d pick out a tent that was on sale for $19.95. They would jot down the UPC number, and with a hand-held UPC gun anyone can get from a retailer supply house, would make a counterfeit UPC label. They’d return with the label cupped in their hand and stick it over the actual UPC label of a higher-priced tent, say one selling for $129.95, and then put the tent in their shopping cart. They’d mosey around and pick up a shirt, some pants, a bottle of shampoo, maybe some chips and dip, enough other goods to get that receipt high enough to exceed $129.95. Say they’d get it to $149.95. At almost all stores, the receipts didn’t have what’s known as line-item detail. When you returned something, the store computer would read only the header at the top of the receipt. That header gave the date and time of transaction, as well as the total amount of the purchase, in this case $149.95. But the computer won’t search the list of items on the receipt and see if they matched a purchase record stored in the computer.
Once they got out of the store, the crew members would remove the phony UPC label. They’d scan the header of the receipt and then print out a counterfeit receipt containing that header, but with a new list of items, including a tent for $129.95. They would use distraction to steal cash register paper right out of a cash register, so they could print the fraudulent receipt on the actual paper of the chain. Finally, they’d go to a sister store in another town with the receipt and return the tent, earning $110 for their effort. When the customer service representative looked at the receipt, he’d see the tent there and the computer would satisfy itself that the header included a sufficient amount of money. The Vickers Gang would print up additional phony receipts to return as much as possible of the other items, though some of the things they kept because they needed them. In this way, they made as much as $4,000 a day during busy shopping periods. They liked tents because there was such a wide price range. They also liked golf clubs, and for a while they made a killing returning submersible water pumps to Home Depot.
BUT THERE ARE ALWAYS RULES AND REGULATIONS
The Vickers Gang operated like a well-oiled business. Santa Claus schooled his members in a list of professional rules and routines they were to faithfully obey. For instance, the Vickers Gang never did their marking down in the morning, except around Christmas when the stores are continually packed and clerks are easily distracted. Otherwise, they avoided mornings because that’s when clerks and other store employees are most alert. The Vickers Gang would do its shopping in the afternoon, after the clerks have been there for four or five hours. By then, everyone is worn out. Cashiers just want to get you out of there, because they’re ready to go out on a date or pick up their kids, and they just want the last two or three hours at the store to end.
They were told never to return something in Minneapolis with a receipt they got in Chicago. Clerks get confused with out-of-state receipts, because the chains often have different style receipts in different states. They won’t recognize them and will then call the manager. You never want the manager to get involved. Another rule was not to return something with a receipt dated thirty minutes ago to a store an hour away. Also, they were forbidden to return the same type of item twice to the same store. If you bring back pots and pans one day, don’t return pots and pans next week. You can bring in a jacket or a microwave, but not the same thing. There’s always the risk that the store will have figured out the pots and pan return after you left.
Determined to stop the Vickers Gang, Target was fastidious about incorporating fresh security features into their receipts. But when company officials go to sleep at night, criminals stay up late working on new ways to beat the system. The genius about Santa Claus and the Vickers Gang was their ability to adapt. Within days of a retail chain making alterations in its systems, they would make the appropriate changes in their operations. After all, when they began, there were no UPC codes, just ordinary price stickers. So they counterfeited the price stickers. Stores had manual cash registers. So the Vickers drove around with an NCR cash register in their trunk, and would make their counterfeit receipts on the register. When clerks looked at a receipt when he was returning something, Santa Claus would sometimes joke, “If you don’t like that receipt, I can just get another one from my trunk.” When stores moved to computers, they followed suit. At one point, Target switched to a restricted cash register ribbon that printed in two colors of ink, so that the top half of a number might be black and the bottom half red. The Vickers Gang tried unsuccessfully to buy one of the ribbons, and finally managed to steal one.
The Vickers Gang had a long and prosperous run, and some narrow escapes. Sensing she was being watched, Jodi Vickers once had to peel off a bunch of labels she stuck on some pots and pans and chew them up. Both she and her husband got caught in a Kmart but were let off with probation. But the work of Target investigators and law enforcement agents finally succeeded in catching Santa Claus and his gang in Florida in the mid-1990s, and he was sent to prison. He never paid any restitution. While he was in jail, Target became one of the few chains to switch to line-item detail on its receipts, which is what I strongly recommend. When you bring something back to Target now, the computer in the store will not only read the header but also search for that particular item and see that it matches the purchase record in the computer’s data base.
Jodi Vickers agreed to cooperate with prosecutors and received probation. The last I heard, she was remarried, working for the Florida Motor Vehicle Department, of all places, and writing cookbooks for people with gout. Toward the end of 2000, Santa Claus was released from jail. His feet were in bad shape from gangrene, but Target and other retailers put their stores on alert that he was once again a free man. Even at this late date, no one is willing to bet that he is planning to go straight.
THE JOYS OF TRAVEL
Traveler’s checks are another favorite document for criminals to counterfeit, because they can be readily converted into cash. Traveler’s checks are pretty secure. The problem is not enough people who take them know how to recognize the security features, even though it’s not hard, since there are only four brands of traveler’s checks in the world to remember.
The first thing to know is that all traveler’s checks begin with the routing number, 8000. This is the number assigned to traveler’s check companies. Forgers who forge traveler’s checks go to a great deal of trouble and expense to engrave them. In order to make their money back, they need a lot of time to pass them. To give themselves this time, they will remove the 8000 code and insert the check code of a bank located a far distance from where the checks are being cashed. This will give them just enough time to float those checks, so they can cash them. So remember, the only acceptable routing code on a traveler’s check is 8000.
Every traveler’s check also has security features in its paper. For instance, if you hold the Thomas Cook traveler’s check up to eye level, you will discover the image of a Greek goddess to the right in a circular watermark. It’s visible front and back. If the lady’s there, the check is legal. If you don’t see her, it’s worthless. Don’t feel it, don’t look at it, simply bring it up to your eye and see if she’s there.
If I give you a Visa traveler’s check, there will be a big white spot over on the left. If you bring it up to eye level, there will be a two-tone dove flying in it, visible front and back. And the line where you sign your name, as well as the countersignature line, are not truly lines but the word “Visa” repeated over and over in microprinting visible under a magnifying glass.
The Citicorp check has a white spot on the right. If you bring it up to eye level, a Greek god’s face appears inside the spot.
The American Express
check has a centurian printed on the left, but when you look closely, there’s a centurian on the right in a white spot. If you still have any doubt about the authenticity of an American Express traveler’s check, turn it over so the back is facing you. Take your finger, wet the tip, and run it across the left denomination. If the image smears, then it’s good. If it doesn’t smear, then the check is worthless. American Express treats the left denomination with a chemical enzyme so that on contact with saliva or water, it instantly smears. Remember, only on the back left-hand denomination. You can go after the one on the right with Comet cleanser and a toothbrush and it won’t change.
Finally, on the front of American Express traveler’s checks, you’ll notice that it says, “Pay this cheque to the order of United States dollars.” Many times, Canadian-issued traveler’s checks will pass as U.S. currency. On Canadian checks, it says, “Pay this cheque to the order of Canadian dollars.” Make sure that when you’re cashing it you’re cashing it for the right country’s currency.
DOES IT GET ANY BETTER THAN THIS?
If you’re going to counterfeit something, I guess it doesn’t get any better than money. As it turns out, the most counterfeited currency in the world is the American bill. That’s because it’s easiest to reproduce. Most foreign currencies are made up of at least six to eight colors of sophisticated background and etching. In comparison, the American bill is made up of just two colors. With today’s technology, counterfeit American currency comes quite close to the real thing. And there’s a lot of it out there. In 1999, $52.7 million in fake currency was recovered in the United States.
In 1995, 0.5 percent of all the counterfeit money in circulation was done on the personal computer—in other words, none of it. Back then, the Houston police arrested some counterfeiters and brought them into their interrogation room. Where’d you get the money? they asked. The counterfeiters admitted that they worked for a printing company. They had a key to the back door. On the weekends, they would go in, cut the alarm, and print stacks of money on a high-speed printing press.
The Art of the Steal Page 8
