Group debates how to fight check fraud

Tougher laws, sentencing among recommendations to two state legislators

Rise in counterfeiting seen

General Assembly

January 24, 2004|By Ivan Penn | Ivan Penn,SUN STAFF

Two top legislators got an earful yesterday about the problem of counterfeit checks from law enforcement officials, the banking industry and retailers who urged, among other things, stiffer penalties for forgers.

"Take it right toward the kingpin by making it such a high risk to them that it's not worth it," said Al Banthem, an official with Mars Supermarkets.

One fraud investigator compared the forgers' network to that of organized crime.

In response, state Sen. Thomas M. Middleton, a Charles County Democrat and chairman of the Finance Committee, organized a group to develop ways to fight bogus checks.

Middleton also charged the new group -- which consists of more than two dozen law enforcement and business leaders -- with helping to determine whether the issue of counterfeit checks should be given a broader review nationwide through the National Conference of State Legislatures.

"It's long overdue," Carolyn Henneman, chief of the state attorney general's criminal investigation division, said about yesterday's meeting. "It's a serious problem. I know one bank alone has suffered $1 million in losses a week."

The two-hour meeting yesterday was the first of a series of discussions initiated by Middleton and state Sen. Brian E. Frosh, a Montgomery Democrat and chairman of the Judicial Proceedings Committee, in response to a Sun article in November that showed a fivefold increase in reports of counterfeit checks in Maryland since 1996. The Mars stores reported having lost tens of thousands of dollars to counterfeiters.

The article also chronicled the counterfeiting schemes of Hugh Maurice Allen Wade, who has been convicted several times for stealing hundreds of thousands of dollars using bogus checks but has spent only a few years in prison.

No one keeps track of the amount of losses by banks and other businesses, but experts say the nationwide total reaches into the hundreds of millions of dollars.

The parties meeting yesterday sometimes clashed over what might help resolve the problem, but they agreed that it has grown worse as advances in computers have made it easier for criminals to print fake notes.

"We are being victimized by people who are using our checks," Robert Wade, a representative of the Hechts Co., told the lawmakers during the meeting. The counterfeiters "are smart and they're good. They use all the technology."

Henneman said the attorney general's office sees counterfeiting rings operating all over the state. She said she believes that the laws on the books are sufficient for her agency to prosecute counterfeiters, but she said convictions for such crimes rarely produce lengthy prison sentences.

"It's hard to get the attention of the sentencing judge," Henneman said.

Debby Chenoweth, an economic fraud investigator with the Baltimore County Police Department, said she wants to see tougher laws because, unlike the attorney general's office, local prosecutors do not have the ability to convict counterfeiting ringleaders and repeat offenders on charges that will keep them off the street.

"The law really has to spell out ... what they can be charged with," said Chenoweth, who has been pursuing convicted counterfeiter Hugh Wade for almost a decade. Counterfeiters "have a network that is incredible," she said. "It has been likened to the Mafia or organized crime."

Some of those attending the meeting said many of the state's 24 local jurisdictions lack the human and financial resources to pursue economic fraud. Baltimore County's fraud investigation unit was described as the most aggressive in the state.

Along with tougher sentencing and laws, those attending the meeting also called for more resources for frontline defenses, such as bank tellers fingerprinting people and consulting company-provided employee lists before cashing checks.

Middleton asked the attorney general's office to join him in gathering more facts that will lead to recommendations over the next few weeks.

"I hope whatever comes out of this is some meaningful legislation and policy," Middleton said.

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