A descriptive study of fraudulent checks :an investigative model

Purpose: The purposes of this study were: (1) to evaluate the respective roles of merchants, banking institutions, and law enforcement agencies in relation to fraudulent check crime; (2) to determine why the consumer is not made aware of the extent and cost of fraudulent check crime; (3) to evaluate the investigative procedures and capabilities of law enforcement agencies assigned the responsibility of investigating fraudulent check crime; (4) to determine if the criminal justice system is organized to respond to this type of crime effectively; and (5) to develop model procedures for the investigation of fraudulent check offenses. Methods: The major procedures used to gather information in this study were: (1) a field survey was conducted in the metropolitan Houston area with large chain stores, banking facilities, collection agencies and elements of the criminal justice system at city, county and federal levels; (2) letters, requesting bibliographic and departmental information concerning investigative procedures for fraudulent checks, were sent to the fifty largest police departments based on the population served; (3) an assessment of the information obtained was performed in relation to the individual operations, inter-relationships, weaknesses and strengths of these various organizations; (5) an extensive review of the pertinent literature was conducted, including : (a) the historical development of the check; (b) the banking system established to process check transactions; (c) a review of the Uniform Commercial Code; (d) a review of written studies on check offenders; € a review of the economic impact of fraudulent check offenses; and (f) a review of those sections of the Texas Penal Code pertaining to fraudulent check crime. Fraudulent checks are divided into two categories: (a) non-sufficient fund checks and (b) forged or altered checks. Findings: 1. Statistics pertaining to the dollar loss caused by fraudulent checks are controversial and virtually impossible to verify at this time. 2. The fraudulent check offender is a highly mobile individual who migrates within regions and is extremely recidivistic. The few studies of the check offender that exist are very old and need to be replicated to add validity to the findings. 3. In one circumstance, considerable effort has been made, over a period of years, to establish a Uniform Commercial Code. In the area of penal law every state has established its own criminal statutes coupled with differing prosecution policy. 4. The business community seeks restitution and not prosecution in all but a few instances. Interviews conducted substantiate that forgery offenses are often not reported to the police. 5. The sections of the Texas Penal Code pertaining to fraudulent checks has turned the Harris County District Attorney’s Office and the Justices of the Peace into tax supported collection agencies. 6. The criminal justice system is currently not adequately organized or prepared to cope with the fraudulent check problem. 7. The business community will not initiate adequate check cashing policies for its protection if the financial loss incurred is collected by government agencies through restitution procedures. Competition between merchants is too keen to install check-cashing policies upon customers unless the public is informed of the fraudulent check problem. The merchants are content to blame the bankers and the bankers to blame the merchants concerning this problem. The business community believes public exposure of the problem will cause a credibility drop with the consumer. 8. Offender identification is compounded by the ease with which fraudulent identification may be obtained. There is a need for federal and state governments to cross-index birth and death certificates. 9. The contention that a drivers license is not issued for the purpose of identification, but only indicates the privilege to drive an automobile, is seemingly unrealistic and out of date. 10. The federal law enforcement agencies appear to be much more sophisticated in the investigative procedures followed in identifying forgery offenders. There is a need for federal investigative agencies to provide a centralized training program to equip municipal law enforcement with the expertise developed in forgery investigations. 11. The numerous city and county jurisdictions involving local law enforcement are restrictive to thorough investigation of fraudulent check offenses. This problem is increased when there is no means to adequately pool investigative knowledge. Municipal law enforcement lacks written policies and procedures for the investigation of fraudulent check offenders. This is not only true in Harris County but may be found nationwide. 12. The key elements suggested for establishing effective fraudulent check investigation are as follows: (a) exposure of the fraudulent check problem to the consumer; (b) revision of state penal codes; (c) establishing an adequate form of identification; (d) creation of a check file system, manual and/or computerized; (e) a regional alert notification system; and (f) written procedures and policy pertaining to forgery investigation.