Legal Bytes:  New Scam Involves USPS Money Orders
         by John Brewer   May 2005

       Some people never sleep. They are too busy devising a new artifice to scam someone out his or her bank account. Some criminally inspired diabolical cretins have a new scheme that is very clever.
       According to a recent article in the New York Times, in the last six months, “international forgers - mostly in Nigeria, but also in Ghana and Eastern Europe - appear to have turned new attention to the United States postal money order. More than 3,700 counterfeit postal money orders were intercepted from October to December, exceeding the total for the previous 12 months, according to postal inspectors.”
       The scam works as follows: In the majority of the cases, the victim is contacted by e-mail or via an online chat room. The scammer arranges to purchase an item from the victim and pay for it with a USPS money order. An alternative scam involves cashing money orders for a fee. The money orders are counterfeit. “160 arrests have been made in the United States since October in cases where people have been suspected of knowingly receiving fraudulent postal money orders or trying to cash them, Paul Krenn, a spokesman for the United States Postal Inspection Service, said.”
       The New York Times article told the story of a fellow who joined an international online dating site, Elitemate.com. In late January, he was contacted by someone claiming to be a young woman from Nigeria. She - or perhaps he, or even they, the victim now concedes - went by the name of Ogisi Douglas.” After an exchange of e-mails, “Ms. Douglas” asked the victim for his help buying a laptop computer. The victim purchased a $1,500 laptop, and after he received two United States postal money orders for $950 each, he sent the laptop to an address in Nigeria.
       The victim deposited the money orders at a branch of J.P. Morgan Chase. No one knew the money orders were bogus. His “friend” soon asked him to buy more computers, all paid for with bogus money orders. The victim discovered they were bogus when he tried to cash them at a local post office. He had not shipped more computers but the first purchase was a total loss.
       "I felt, obviously, a bit foolish for not listening to those little voices that say: 'Something's not quite right here. You don't have all the information on this person,' " said the victim. "But it all moved very fast."
       According to the USPS, bogus money orders can be detected.
       Hold the money order up to the light and look for the following security features: Ben Franklin images (watermarks) repeated on the left side (top to bottom). A dark security thread running (top to bottom) to the right of the Franklin watermark, with the tiny letters “USPS” facing backward and forward. If either of these security features is not present when the money order is held up to the light, you are holding a fraudulent Postal Money Order.
       Also be aware that denominations are indicated on two locations. Discoloration of the denomination amounts indicates erasure (fraudulent). Maximum value for domestic postal money orders is $1,000. Maximum value for international postal money orders is $700.
       The FDIC issued a special alert referencing the money orders on March 5, 2005. The special alert gives information regarding identification of the money orders and reporting procedures when they are presented for payment.
       According to the USPS Web site, U.S. residents are lured into the scam when they are told they can keep some of the money as a gift or payment for their help. Unsuspecting victims provide their home mailing address to the fraudster and are told they will receive a check or postal money order that they should deposit into their own bank account. The victim then is instructed to immediately send the money via Western Union or conventional bank wire transfer to a bank or person located outside the United States.
       The NY Times article gives more detail. “Dave Thompson, a bicycling enthusiast from Spokane, Wash., said he had received two $1,000 United States postal money orders for "a piece of bicycle equipment worth 50 bucks."
        A number of people have been arrested according to the NY Times. At least eight arrests have been made in Nigeria in recent months, said Dan Larkin, a chief for the F.B.I.'s Internet Crime Complaint Center, and arrests in the United States are mounting.
        On March 3, Christopher R. Zeblisky was arrested in South Milwaukee, Wis., and accused of trying to withdraw the proceeds of a deposit of eight counterfeit $1,000 postal money orders.
        A week later, in Charleston, W. Va., Manuel G. Roberts was arrested and accused of possessing 64 counterfeit checks written for more than $670,000 and 8 counterfeit postal money orders totaling almost $8,000.
        And two weeks ago, postal inspectors and F.B.I. agents in Puerto Rico arrested William Arocho-Valentï shortly after they said he had cashed 19 counterfeit postal money orders, traced to West Africa, for more than $18,000. Mr. Arocho-Valentï had $35,000 worth of bogus postal money orders in his possession when he was arrested, the authorities said.
       It is amazing stuff … these Internet con schemes. I think P.T. Barnum had a saying for the type of person who buys into these schemes, “There's a sucker born every minute.” This is the principle that keeps these schemes flourishing.

John Brewer practices law in Oklahoma City, is a member of the Governor’s and Legislative Task Force for E-Commerce, and enjoys issues relating to eBusiness and cyberspace. Comments and questions are welcome and can be emailed to johnb@jnbrewer.com.

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