Con artists scamming Texans with phony U.S. Treasury checks

02:56 PM CDT on Friday, May 15, 2009

KHOU.com staff report

HOUSTON -- The Office of the Attorney General is warning the public about a U.S. Treasury check scam.

Officials say con artists are mailing high-quality counterfeit U.S. Treasury checks to some Texas residents.

In one version of the scam, checks were mailed with instructions directing recipients to cash them and wire part of the money abroad.

In a second version of the scam, recipients were instructed to deposit the checks into their accounts and call for additional information. Over the phone, the con artists advised the victims to wire 90 percent of the checks’ funds and keep 10 percent for themselves.

Because the check is a fake, it transfers no funds, so the victim is out of any funds transferred, may be subject to bank fees and could even have to explain their actions to authorities.

Both of the schemes are variations of a common scam called advance-free fraud.

The scams tend to change often, but officials say there are some underlying characteristic that usually remain constant.

The communications often contain grammar or spelling mistakes, are mailed from Canada or other foreign countries, instruct the recipient to wire rather than mail funds, contain a threat of legal or monetary penalties if the letter is ignored and demand urgent action.

Texans who receive tax-refund checks from the IRS are asked to consider their situation before taking action.

Have they filed their federal income taxes? Were they expecting a refund? Does the amount match that expectation? Were they expecting a check, or did they request direct deposit? Texans should be wary of any unexpected check they receive, especially if it comes from an unfamiliar person or organization.

Legitimate U.S. Treasury checks will always come in an envelope bearing a U.S. Treasury return address, will never be accompanied by a letter from anyone other than the U.S. Treasury, and will never instruct recipients to send a portion of the funds to anyone else. Both legitimate and counterfeit U.S. Treasury checks include warnings on the back that say, “WARNING: Do not cash check without noting watermark. Hold to light to verify watermark.” A watermark saying “U.S. Treasury” on a legitimate check is embedded in the paper stock and will only be visible by holding a check up to a light. However, con artists are constantly perfecting their trade and future versions may appear even more authentic. Texans who are suspicious of a check should disregard it or take it to local authorities for verification.

While many justifiably place great confidence in U.S. Treasury checks, some counterfeits are so convincing that even bank tellers have been fooled. Asking the bank for verification that a check is valid can help protect recipients, but if it ultimately proves to be fraudulent, recipients will not receive any proceeds. Banks and other financial institutions generally will not absorb the loss if Texans fall victim to this scam. In some cases, victims could even face criminal charges for inadvertently cashing counterfeit checks or money orders.

Texans who want more information about fraud or believe they have been targeted for this or other scams can contact the Office of the Attorney General at (800) 252-8011 or online at www.texasnattorneygeneral.gov.