The Art of the Steal (9 page)

I’ll be long dead, even if I live to a ripe old age, before checks will ever disappear. The amount of checks we write is growing at a rate of more than a billion checks a year. So they’re not even declining in use. They’re growing. I remember fifteen years ago, when we were writing 40 billion checks a year, people said it would never reach 50 billion, and now we’re at almost 70 billion.

People happen to like checks. They’re familiar. Many consumers will say, “I like this check. It has some float to it. I like that much better than when the bank immediately goes into my checking account and takes the money out. I also like the idea that I can get the check back and see who I wrote it to and have a record of it.” And we have a very large generation that is not comfortable with smart cards and electronics. They’re leery of new ways of payments, and they don’t fully grasp them.

Electronic banking is still much more of an unknown frontier. And there’s no forgetting the billions of dollars that banks have invested in electronic readers, sorters, and other check processing equipment. We’re not going to just scrap it and plow money into home banking. There are banks out there pushing electronics, but there are a lot of other banks that would just as soon stay with checks.

So if we’re going to continue to use checks, you had better learn how to protect yourself. After all, awareness is 99 percent of solving the problem. The moment you accept the fact that fraud and forgery are so easy to accomplish, that’s the moment you’ve taken the first step toward combating it.

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[COUNTERFEIT
CAPERS
]

I
once was interviewed about fraudulent documents by Sam Donaldson of ABC television. During the interview, I dug into my briefcase for a moment and pulled out a piece of paper. I handed it to him and said, “By the way, have you seen this letter?” He studied the sheet of paper and his eyes got very wide. “Wait a minute, where did you get this?” he said.

It was a letter of reference on ABC stationery, extolling the many virtues of Frank Abagnale. It was signed by Sam Donaldson.

“You sent me a letter two days ago confirming our interview,” I said. “I scanned the ABC letterhead into my computer. I matched the paper—it was just standard linen paper—with paper I bought at the local stationery store. Then I wrote the new text and printed it out.”

“But what about my signature?” he asked.

“I scanned that off your letter, too,” I said.

That was just a fun thing I did to illustrate a point. But I’m far from the only one doing it. We’re literally awash in phony documents, and I’m not talking simply about those fake IDs that teenagers buy in Times Square to allow them to purchase beer and gain entrance to clubs. Counterfeit documents of every imaginable kind have proliferated: birth certificates, death certificates, Social Security cards, driver’s licenses, store receipts, medical prescriptions, product labels, traveler’s checks, event tickets, amusement park passes, coupons, car titles, green cards, diplomas, college transcripts, passports, voter identification cards, and, the most counterfeited piece of paper of all, money itself. Almost anyone can professionally forge or counterfeit a wide variety of documents, day after day, for an investment of just a few thousand dollars.

Because so much fake paper is floating around, I caution managers that when they hire someone for a sensitive position, it’s more than credentials that they need. They have to make phone calls. They have to write letters. Don’t trust a piece of paper, because anything can be replicated. Just ask Sam Donaldson.

It’s gotten so bad, even the FBI is changing its credentials. Since the days of Hoover, they’ve had the same ones—reused. When an FBI agent retires, he turns in his credentials and a new agent receives them. Now the agency is redoing them with holograms to make them harder to counterfeit.

A CHAIN IS ONLY AS STRONG
AS ITS WEAKEST LINK

The real travesty here is the chain-link effect of counterfeit documents. What happens is criminals use counterfeit papers as “breeder” documents. A breeder document is a phony document used to obtain a genuine one. Generally speaking, criminals will counterfeit a document that has little, if any, security features and then use that to get far more secure legitimate documents.

In most cases, a birth certificate contains next to no security features, so it has become an ideal breeder document. Criminals will create a fake birth certificate to obtain a genuine driver’s license, then use those two documents to get a legitimate passport. Once you’ve got that first authentic document, you’re pretty much on your way. After all, the right documents allow people to get unauthorized benefits, to land jobs they’re not entitled to, to gain illegal entry into a country, to construct new identities, and to fraudulently obtain credit cards and loans.

There’s always been a lot of Mom and Pop document fraud, and there still is, but there are actual document syndicates today that are as well-organized as major corporations. There’s actually a standard counterfeit package that immigrants buy that consists of a resident alien card, Social Security card, and driver’s license. Gangs in big cities like Chicago, New York, and Los Angeles sell these ensembles on the street. The criminals will brazenly approach foreigners in broad daylight and ask, “What do you need?” Estimates are that counterfeit and illegally-obtained documents cost the country something on the order of $25 billion a year. In late 1998, Immigration and Naturalization Service (INS) agents raided two storage facilities in Los Angeles and rounded up more than two million counterfeit identity documents. The agency estimated that the street value of that paper was in excess of $80 million. Hardly chump change.

GOODBYE PEN AND INK MEN

Technology has made life so much easier for the counterfeiter. Years ago, a document counterfeiter was known as a “pen and ink man.” He worked meticulously by hand and needed steady nerves. That’s all changed. To get an idea of the impact of technology on crime, consider the color copier. In late 1977, Xerox invented the machine called the Xerox 6500 Color Copier. And it was quite a machine. At that time, it was considered the most advanced copier in the world. People were reproducing full-color documents in a matter of seconds. All a forger had to do was lay a real check on the machine, close the cover, push a button, and out would come a duplicate check that looked just like the real thing. Forgers loved the Xerox 6500 so much so that they cashed more than $365 million worth of phony checks color-copied by the machine.

Twenty years later, it’s an antique. These days, forgers interested in a wide array of documents use a product called the color laser digital copier, again found everywhere. The quality of the color copies produced by this machine is truly remarkable. Nearly anything on paper can be acceptably reproduced: gift certificates, traveler’s checks, birth certificates, college transcripts, car titles, and even money. It can reproduce such magnificent colors that you couldn’t tell the real thing from the fake even in a side-by-side comparison. Color copiers are so proficient at reproducing dollar bills that, in most cases, the bogus bills will go through a vending machine. They’re so realistic that you find them in ATMs.

If you want to stop document fraud, you have to start building layers of security features into the documents. Because I’m in this business, I even have an array of features on my company letterhead. If Sam Donaldson tried to scan one of my letters the way I scanned his, he’d be in for a rude shock: “void” would show up all over the document.

YOU DON’T NEED A STORK

To counterfeiters, the birth certificate is one of the choicest documents of all, because so much can be accomplished with it. Since it’s accepted by just about every government agency as proof of one’s identity and citizenship, it’s the key to getting a host of benefits and other documents. Thousands of state and local registrars’ offices issue birth certificates in the United States. Many of them produce more than one type. Also, states have revised their certificates many times over the years, and both the old and the new variations are all in circulation. Add this all up, and there could be more than ten thousand variations of the U.S. birth certificate in existence. And that’s great news to a counterfeiter. The more renditions of a document, the harder it is for anyone to say that the one that you have is false.

Some birth certificates have very good security features. Some have none at all. I guess it’s obvious that the best birth certificate to use fraudulently is a genuine one. Normally, it doesn’t take a lot of effort to get one. In many states, birth certificates and death records are part of the public record and are readily available to anyone for the asking. I’ve seen estimates that more than 80 percent of requests for birth certificates are processed through the mail for people who gave nothing more than a name and a return address. Some states have a few requirements, but nothing so onerous that a smart criminal can’t circumvent them. For instance, in certain states, only the next of kin or an attorney can request the birth certificate. But you don’t have to go to law school to become a lawyer. All you need to do is pay a visit to a print shop and get some business cards and letterhead that will transform you into a lawyer, enough of one, at least, to get access to public records.

As with checks, forgers are adept at altering birth certificates. The biographical information is printed onto the surface of the paper. This means it’s easy for the forger to remove it either mechanically or chemically, substitute new information, and be left with a genuine document imprinted with phony information, which can be very hard to detect. And with document scanners, computers, copiers, and the other technologies I’ve mentioned, it’s quite simple to run off counterfeit birth certificates that will pass muster.

I’ve designed high-tech birth certificates for a number of states to guard against counterfeiting and alteration. The security features void the document if someone tries to copy it or chemically change it with bleach, acetone, or other substances. But I tell state officials, “This isn’t going to stop an impostor from getting someone else’s actual birth certificate. You need to make it harder for that to happen.” And their response is, “Well, we know that, but that’s another issue.”

I no longer get involved in securing a state’s birth certificate or driver’s license, if they’re not going to close the other loopholes. A few years ago, I worked on the Florida certificate. Florida makes it very hard to get a legitimate birth certificate. But the document itself was easily counterfeited. And with all the illegal immigrants down there, it was a highly desirable piece of paper. In Miami, a Florida birth certificate had a street value of five thousand dollars. So I designed a very secure document, and the counterfeiting problem has abated.

PICK A LICENSE, ANY LICENSE

Driver’s licenses were initially intended simply to confirm that the holder had the right to drive in the state. But our customs have transformed them into commonly requested identity documents as well. And that has made them of keen interest to criminals.

The validity of a license is hard to determine, because there are so many in circulation and they differ so much. There are hundreds of variations, depending on when and where they were issued. In many states, you can get a legitimate driver’s license simply by showing a driver’s license from another state. Virginia, for instance, does that. So if you get away with passing off a counterfeit Kansas driver’s license in Virginia, bingo, you can obtain a real Virginia one.

In California, they spent a fortune on their new driver’s license. They put holograms on them, used sophisticated sealants in the printing, just poured a ton of money into the design. And a few months after the new license was introduced, the police arrested a forger with fifty licenses in fifty different names. Why? Because it was still easy for someone to go to the Driver’s License Bureau and get a license with false identification. I told the state, “All you’ve done is stop some kid from changing the birth date on his license in order to buy a beer.”

Either close all the loopholes, or you’ve closed none.

FEELING SECURE?

Another case in point is the U.S. passport. We all know how handy a fake passport is to a crook on the lam. So it makes a lot of sense to really secure it. The passport has long had some good features, and I added a new one a few years ago. For the U.S. passport, I helped develop with Standard Register a technique called Mirage Image, which adds encrypted information onto the passport photo. When you put a special piece of milled glass over the photo, your name and birthday are visible. The passport has become a hard document to successfully counterfeit, which is why a fraudulent American passport commands ten thousand dollars on the streets.

Unfortunately, the other loopholes haven’t been closed. Nearly anyone can acquire a fake Social Security card and birth certificate that are good enough to get a genuine passport. Until these other documents are made more secure, the passport remains at risk. Right now, the U.S. Social Security card is about as vulnerable as it gets. Border Patrol Agents routinely intercept thousands of fake Social Security cards every year at traffic checkpoints. In 1999, they collected something like a hundred and twenty thousand of them, more than one every five minutes. This is frightening, because the Social Security card has become our ad hoc identity card, enabling the holder to collect government benefits and to certify that he’s eligible for employment. When you flash a Social Security card, people know you’re for real.

At the moment, there are more than twenty different versions of the Social Security card, and they vary a great deal in their security features. Earlier cards, meaning those issued prior to October of 1983, have no security features whatsoever. Those issued since then contain various things like intaglio engraving and microprinting. But criminals know that it’s possible to get a genuine Social Security card if you have one of two other documents: a birth certificate or a resident alien card.

In recent years, the INS has been steadily tightening its own documents. Just a few years ago, the INS had twenty different types of Permanent Resident and Employment Authorization cards that were valid, too many for comfort. Now there are just five. No longer are the cards good for a lifetime, the way Social Security cards are, but expiration dates have been added, which enables the agency to update photos and implant new security features when a card is replaced. One new feature is a personalized engraving of the person’s photo, signature and biographical data right on the optical stripe. These are important steps in the right direction, for they make it just about impossible for counterfeit cards to be mass produced.

BALL PARK PRANKS

Large public events of any type—sporting, political, religious—invariably draw a great many uninvited participants: crooks. Con artists go where the money is. Wherever there are crowds, there are opportunities for scams. You’d be amazed at how common it is for criminals to make counterfeit tickets and passes. It routinely happens at the World Series, the Super Bowl, and big golf tournaments. Two disasters at soccer matches where scores of fans were injured, some seriously, were attributed to stadium overcrowding. Why were the stadiums so crammed? Because thousands of people had gotten in after buying counterfeit tickets from scalpers.

I’ve worked on a lot of golf passes and the Disney World pass. Generally, I put an invisible dot on them. Then the guard at the entrance gate has a reader that reveals it. Disney also has cruise ships. Most of the employees are foreigners who need a special pass that allows them to get on and off the ship, and so I designed a secure version of that, too, which is printed by the Standard Register Company. With these documents, it makes no sense to incorporate the level of security features that you would put into a check, because you have to consider the value of what you’re securing. If a pass is worth $30, it only pays to put maybe one security feature on it. But a check can cost you millions of dollars.