Abagnale, who inspired Hollywood’s ‘Catch Me if You Can,’ says technology breeding crime
The identity fraud master portrayed by Leonardo DiCaprio in the movie “Catch Me if You Can” came to Rhode Island Jan. 26 to tell people just how easy it is to embezzle their money.
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“The number one reason people commit identity fraud is opportunity; it is so simple to do,” said fraud expert Frank W. Abagnale. “If I live another 50 years, I will not witness a more simplistic crime.”
In an eye-opening presentation, Abagnale explained to more than 200 people at the Providence Biltmore Wednesday exactly how criminals create fake checks using everyday technology and how they access identities.
Rhode Island Attorney General Patrick Lynch invited Abagnale to the state to give his presentation at the Fraud, Forgery and ID Theft Summit – the first time an attorney general has ever asked Abagnale to present this information as a community service.
Between the ages of 16 and 21, Abagnale cashed $2.5 million in fraudulent checks in every state and 26 foreign countries during the 1960s.
When he wanted to establish a new identity to open a bank account and cash bad checks, he would go to the Department of Vital Records in the city he was in and ask to see the death records for the year he was born. He would write down the death information of an infant who died at birth and later apply for a birth certificate in that name for $10. Then to the DMV for a driver’s license with his photo and someone else’s name. He had 50 licenses within five years.
Thirty-five years later, these records are available on CD-ROM and Web sites sell Social Security numbers, addresses, dates of birth and criminal records for bargain prices.
“Technology breeds crime. With the Internet and laser printers, forgery is 30,000 times easier than when I did it 30 years ago,” Abagnale said.
The FBI did catch up with Abagnale and he served time in prison in France, Sweden and the United States – though serving time is now rare in identity fraud cases. He was released after five years on the condition he would advise the federal government on fraud cases without pay. He now advises the federal government, cities and companies on how to protect against creative identity theft criminals.
Punishment for fraud and the recovery of stolen funds are so rare, preventative action is critical, Abagnale said
“You need to ask yourself what you are doing to mask the identity of your employees and your customers to prevent their identities from being stolen,” he said.
Companies at risk for embezzlement use the same paper sold to the general public, they print checks using ink that can be easily removed with chemicals, and they don’t track checks with numbers.
Making copies of checks is easy with computer scanners, color printers, and check paper sold at office supply stores. Companies should use checks with security features like watermarks, holograms, and Copy Void Pantographs that show the word “void” when scanned or copied.
More than 1.2 million fraudulent checks are received by banks every day but the majority of banks process checks outside the company and never verify signatures.
The responsibility for losses related to check frauds – which exceed $20 billion annually – lies on both consumers and banks.
Abagnale suggests setting up a check tracking system called Positive Pay with banks. Daily copies of the checks written by the company are sent to the bank and matched with each transaction to prevent fake checks from being cashed. If a corporate check is written for $350 but the amount on the check being cashed says $3,500, the bank will not cash it, saving both parties from loss.
Companies can prevent fraud by taking the following steps:
– Store checks in a secure place, make sure their printing method is tamper-proof and secure signatures on them. Also, don’t include the true signatures of chief financial officers or chief executive officers on information that is widely disseminated, like annual reports.
– Make new employee background checks routine.
– Have someone other than the person who writes checks or handles finances review bank statements regularly. Segregating the responsibilities prevents embezzlement.
The risk of identity theft can also be reduced by giving out your Social Security number only when absolutely necessary; shredding old bank and credit card statements; taking checks directly to the post office instead of sending them through a home or street-side mailbox; examining credit card and bank statements; not giving out personal or credit information over the phone and subscribing to a privacy service like Privacy Guard.
PrivacyGuard.com monitors information from all three credit bureaus – Experian, Equifax and Trans Union – and informs you instantly when your credit report is pulled.
