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HIGH-TECH SWINDLERS FILCH MILLIONS By Don McLeod
AARP Bulletin, May 1995
Older Americans across the country are losing millions of dollars in
a high-tech revival of an age-old fraud -- the "bank examiner" scam.
"Total losses [for those cheated] must be at least $5 to $10 million
a year," estimates Jon Grow, executive director of the National
Association of Bunco Investigators (NABI). The actual numbers could
be much higher, he adds, because so many cases go unreported.
Average "take" on a bank examiner scheme: $10,000 per victim, Grow
says, adding, "There's not a city in the country that hasn't been
The fraud usually begins with a phone call. Sounding very official,
perhaps a little threatening, the con artist may pretend to be a bank
examiner, or possibly a police officer.
Whatever the caller's persona, the message rarely varies, as the
prospective victim is asked for help in catching a dishonest employee
at the bank.
You can do a good deed, the "official" says. You can even be a hero.
All you need do is go down to the bank and withdraw some money so
they can catch the thief in the act. The victim is told to meet the
phony cop or bank examiner, usually in a parking lot, and give him or
her the money.
The impersonator may say the money will be held as evidence, or that
it will be redeposited immediately into your account. Another scam:
asking to see the money "to check serial numbers" but switching the
envelope containing cash for one with only scrap paper inside.
"Once you hand over your money, there is no recovery," says Melvin L.
Jeter, southern regional security director for NationsBank. "There's
no way any money's going to get back."
Transparent as their act may seem, "bank examiner" flimflammers are
fleecing older Americans out of whopping sums.
A man in Norfolk, Va., handed over $40,000 to one such swindler. A
woman in Winston-Salem, N.C., volunteered $28,000 to another. And a
Sarasota, Fla., retiree went to three different banks to make
withdrawals for people he thought were cops. Before he found out they
weren't, they had relieved him of $26,000.
Such fraud cases are on the rise, authorities say. "[The problem is]
worse now than ever before," says NationsBank's Jeter. "And it's
especially bad in places like Florida, where you have so many elderly
[people] living," he tells a visitor to NationsBank offices in
What's more, he adds, these cases may be just the tip of the iceberg.
"For every [case] we might hear about, there might be 30 that would
happen and people were too embarrassed to report," says Butch Garvey,
an investigator for NationsBank in Sarasota, where officials talked
with a Bulletin reporter.
"This is one of the most unreported crimes going," says Lt. Bill
Stookey of the Sarasota County Sheriff's Department. "This scam has
been around as long as there's been banks, I guess," says Detective
Steve Bowles of the Winston-Salem, N.C., police department. "But
there has been a resurgence of it since 1991."
No one knows exactly why this type of fraud is on the rise. But some
experts cite the proliferation of computers -- through which hackers
can gain confidential bank information about people -- and more
cunning use of the telephone.
Whatever the reasons for the trend, swindlers prey largely on older
people, usually widows, who grew up in an era when people respected
authority. These individuals often are quite willing, even eager, to
do a good deed.
Con artists scan local newspapers for obituaries that tell of women
newly widowed who may have inherited money from a deceased husband or
received a big life insurance payment.
After using the phone to set up a meeting, the impostors dress and
groom themselves to look believable in their roles as cops or
bankers. They flash badges and credentials that look real enough. And
they employ the solicitous "customer relations" manner that one might
expect from such officials. "He was a smooth article, and don't you
think he wasn't," one victim told the Bulletin.
Scare tactics are commonly used to rattle the victim and cloud his
thinking. He is told of a "problem" with his account, that it's being
drained by crooked employees and he must act soon or all the money
will be gone. The "bank examiners" have special tricks for those who
require more persuading. Take the case of Jack Fuller (not his real
name), a 92-year-old widower who lost $16,000.
The con man who called Fuller asked him to fetch his most recent bank
statement and then read him a figure that exactly matched the
balance. "And of course that threw me out in left field," Fuller
tells a visitor to his Sarasota home. "When he read off the balance
right down to the penny, I thought I was doing a good turn for the
Victims assume the caller must be from the bank or he wouldn't know
so much about the account. But the truth is, it's pretty easy for a
criminal to get the most intimate financial data.
Authorities still think most of it comes from the victims themselves,
that they unwittingly tell more than they realize to strangers over
Most banks have automated telephone information services that will
reveal account details to anyone who enters the right identifying
numbers into a push-button phone, says Winston-Salem Detective
Bowles. "If I know your account number and the last four digits of
your Social Security number," he says, "I can find out anything I
want about your account."
Bankers acknowledge that some of it comes from inside sources, bank
employees or computer service workers who have access to information
and sell it. But there is growing concern that outsiders also are
However persuasive these people may sound over the phone, there is
one thing you can do to protect yourself. Law enforcement and bank
officials universally say the best defense is to hang up before they
get a chance to go to work on you.
"The point is, no policeman, no bank is ever going to tell you to
take your own money out of the bank for any reason," says
NationsBank's Jeter. "So, if someone calls you and asks you to
withdraw money for him, you know right off it's a con."
Detective Bowles even warns against callers claiming to be police
officers who ask you to call the police department to check them out.
By tampering with phone lines, they can intercept the call and answer
it themselves, Bowles says.
More and more banks are training their tellers to spot possible
victims. But once customers enter the bank thinking the teller is a
thief, it can be hard to dissuade them from withdrawing.
Milwaukee police have come up with a plan that has virtually
eliminated successful bank examiner scams there. Any time an older
person comes into a bank asking for a large cash withdrawal, tellers
in all Milwaukee banks have a set response.
First, they turn on the surveillance cameras -- intended to capture
on film the swindler who often accompanies his victim inside the
Then the teller hands the customer a one-page bulletin explaining the
crime and warning that perhaps he or she is being victimized. Before
any money is handed over, the customer must read the advisory and
"It gives the victim what they need," says Detective Dennis Marlock.
"It gives them time to think, and often that does the trick."
Yet, says bunco investigator Grow, there's only one real defense
against this type of crime.
"The absolute bottom line," he says, "is if anyone asks you to
withdraw cash for any reason, don't do it."
If you have been approached by a fake bank examiner, call the
National Fraud Information Center at (800) 876-7060.
Copyright 1995 by the American Association of Retired Persons
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