U.S. Postal Inspector Brian Shaughnessy has investigated some of the most noteworthy financial fraud cases in Hawaii over the past seven years. In 2010, he was a finalist for the prestigious Citizenship Award by the City & County of Honolulu for his work in combating identity theft and financial crimes.
Inspector Shaughnessy discussed some of the cases that have led to the successful prosecution of numerous defendants for felony offenses of forgery, theft, identity theft, credit card fraud, and bank fraud. He also discussed some of the challenges law enforcement faces in today’s digital era of financial fraud. Some ongoing issues included the following:
• Check kiting is still a problem in Hawaii, both with stolen and worthless checks being uttered. While fraud involving personal checks have declined slightly in recent years, forgeries involving stolen & altered business checks continue to be a problem. Slow reporting by victim businesses can hinder these investigations.
• Check fraud schemes involving online banking: A suspect in Hawaii opens up numerous online bank accounts with mainland banks, has checks mailed to Hawaii, and then uses the checks issued by those banks to commit check kiting at local banks here.
Money laundering investigations: Postal Money Orders are often the number one choice for drug trafficking organizations to get dirty money back into the U.S. banking system.
• Increase in ACH fraud & corporate account takeovers: $39 trillion went through ACH network in 2013. Criminals like ACH fraud due to the anonymity it provides. Smaller financial institutions and mid-size businesses are being targeted because they are perceived by criminals as more likely to have insufficient controls.
• Synthetic Identity Fraud: Thieves combine real and fake personal identifying information to create new credit profiles, submitting fraud applications with one financial institution after another until credit accounts are approved. This often creates a fragmented file attached to victim’s main credit file that still negatively affects their credit report, but is typically impervious to fraud alerts & credit freezes. It’s the worst case scenario for both person victim and financial institution victim. This scheme is causing millions of dollars in losses on the mainland.
• Operation Plastic Surgery: Postal Inspectors and Secret Service agents in Charlotte & Florida recently took down operators of website, www.fakeplastic.net that was selling counterfeit credit cards. Suspects only accepted payments from other co-conspirators in Bitcoins.
• Operation Rapid Refund: Large-scale stolen identity tax refund scheme that has resulted in more than $5 billion in losses to U.S. Government. Case highlights importance of protecting one’s Social Security Number more than other personal identifying information.
• Elder Abuse continues to be major problem in Hawaii – investigative efforts in these cases are being led by Honolulu Police Department’s Financial Crimes Detail & Elder Abuse Justice Squad at City Prosecutor’s Office. Recent elder abuse cases range from incidents in which the suspect and victim are known to each other (such as family member or caregiver), to cases where the victim receives a fraudulent sweepstakes notice in the mail. In the latter scheme, the victim in Hawaii often mails cash or Postal Money Orders to a middle man on the mainland, who then wires the stolen money to perpetrators outside the U.S., commonly to Jamaica.