The Check Is in the Mail … But It’s Being Stolen

It took Yakov Posner time to realize something was wrong. Patrons of his manufacturing business are generally extended a 30-day credit until payment is expected and, even after that deadline, Mr. Posner extends some grace before looking into a delay. Sixty days or so can pass before anyone will investigate an unpaid bill.

“This past June we noticed we were missing a payment from a customer,” he tells Hamodia, noting that the lion’s share of payments come via checks that are mailed to the company, something which would later prove to be a liability.

“For the first time in 40 years, we called a customer and he told us the check had been sent out, and was deposited,” he says. “Naturally, we started scrambling. We got a copy from the customer’s bank, showing it had an endorsement signature unfamiliar to us, deposited into a bank unknown to us or our customer. But it looked like we had endorsed it.” (The endorsement was by hand rather than rubber stamped, the usual standard.)

He explains that the customer’s bank sent them a copy and then requested an affidavit that the check was stolen, which Mr. Posner promptly provided. Hoping it was a one-off, the incident was somewhat forgotten. Until it happened again, and again, dragging the company into a battle against mail theft, one which would prove to be protracted, fraught, and, unfortunately, still unresolved.

Mail check theft has been on the rise since the summer of 2021, according to the Evidence-Based Cybersecurity Research Group at Georgia State University which has been following the trend. They found over 1,300 checks for sale each week on the black market this October (tallying up at a whopping $11 million), which is twice as high as September, which saw an average of 600 weekly checks (compared to 400 in August). The Cybersecurity group warns that this is just a snapshot of a much larger operation, since their research only covered a fraction of the dark markets out there.

What is contributing to the increase in check theft, how are these interceptions being executed, and what can be done to put an end to it?

INVESTIGATION

For Mr. Posner, his troubles with mail theft were just beginning. By early autumn, another check went missing, and the whole scenario repeated itself. The first check was for $7,099 while the second was $4,015.

By the third, fourth, and fifth time, $5,031, $14,425 and $4,297 respectively, the U.S. Postal Inspection Service got involved. This division told Hamodia they are “federal law enforcement agents who conduct investigations of postal-related crime, such as mail fraud and theft.”

“Two detectives came down,” Mr. Posner continues. “They took copies and pictures of all documents, and then they toured our facility to make sure checks are not getting lost on our premises or taken by a dishonest employee, but it was obvious to them that wasn’t the case. They were very nice and concerned, and they memorized the names of each client. It seems this has been happening in different places in Boro Park; we’re not the only ones.”

And, in fact, Boro Park is hardly the only place. Stories like these of organized theft operations seem to be hitting a bunch of communities from New Orleans to Jersey City.

“They told us mail travels through many points, and it would be a lengthy investigation, although to us it seems obvious that it has to be taking place at a local post office, since our customers are from around the country,” says Mr. Posner.

Thus far, the investigation has proven to be as predicted — lengthy.

The Inspection department continues its statement, stressing that it “takes seriously its role to safeguard America and will continue to aggressively pursue perpetrators that use the U.S. Mail system to further their illegal activity.”

Noting that the U.S. Postal Service safely and efficiently delivers millions of checks, money orders, credit cards, and merchandise each day, it is inevitable that “such items are also attractive to thieves and that is why postal inspectors across the country are at work to protect your mail.” In response to Hamodia’s question as to why there has been a recent increase in mail theft, the service refers readers to another government arm for accurate data but avoids any explanation or context.

EXECUTION

The Cybersecurity Research Group, which has been studying the issue, claims that it is fairly easy for perpetrators to “mail fish” and steal envelopes either from your home box or the big blue ones on the corner. Some even nab keys to the boxes off mail carriers.

Criminals who specialize in mail theft tinker a bit with the checks and then sell them off for a fee. They use nail polish remover to wipe out some information from the check, and then they put it up for sale. An individual’s check can go for anywhere between $120 and $170, while the market value for business checks is $250. And just as a bonus, blue box keys are also available for a fee, essentially giving gangsters the keys to the check kingdom.

None of this is particularly original. Mail theft has been a thing for a long time. But the dark web gives these bandits an edge. However, it’s also what enables researchers to track the activity.

For all those traditionalists who like their funds transferred in paper the old-school way, experts are now recommending the new-school method, e.g., Venmo or PayPal. However, dropping checks directly at a post office is the safer way to go if you’d still like to stick to paper, cutting out potential weak spots in the check’s journey from sender to receiver.

“During the pandemic, there has been an increase in mail theft and thefts of packages outside of homes,” says Paul F. Steidler, Senior Fellow at the Lexington Institute, referring to such mischief makers as “porch pirates.” He also notes that this increase corresponds with a rise in crime nationwide.

“The mail has always been a big target for criminals, including some bad apples within the U.S. Postal Service itself,” he tells Hamodia.

“Those who are expecting checks to be delivered should ask about the packaging,” he suggests. Smaller personal checks can typically fit into a mailbox and are more secure, especially if the mail is received in a locked cluster box.

“Larger business check ledgers, though, may be in packages that could be left outside a home or business. It is important to know the expected delivery date, to track it electronically if possible, and … to make sure someone will be there to get the package when it is dropped off.”

While banks are generally on top of replacing pilfered dollars, sometimes the crime can get quite complex, with stolen identities and the like, making the unknotting more of a time-consuming job. New accounts and loan applications on behalf of a victim can become part of the nightmare.

For Mr. Posner, his story had some additional complicated twists.

“One day, we received a phone call from our bank that somebody has presented a check for $17,321 from our company and it was quickly determined that the check was forged,” he says, in what was a new angle to his saga. “This is the opposite of what happened before. The thieves were originally stealing legitimate checks en route, and now they were forging checks and trying to take money out of our account. Our bank has a good reputation, quickly detected it, and was able to retrieve the funds.”

But things didn’t stop there.

“About two weeks later, another check for $28,078 was also presented at a bank. We were being targeted from both ends.”

While the loss of money was certainly a concern, for Mr. Posner, the biggest misery was the ill will it created between his company and its clients.

“We were going through tremendous difficulty, pestering customers, following up on each missing check, which caused a lot of friction,” he says. “The customer is the victim because the thieves are stealing his check, but we are the ones missing the funds owed to us. There was just so much back and forth with each account.”

In one instance, a customer’s bank required them to close their account and open a new one as a precaution, causing the firm a lot of hassle.

With the investigation ongoing and the culprits still out there, Mr. Posner is taking several precautions.

“At this point we’re doing everything to protect ourselves. We are requesting all our customers to pay via ACH, bank-to-bank money transfers processed through the Automated Clearing House Network,” he says. “For those customers who insist on paying by check, we request closed security envelopes.”

Interestingly, he has noticed that only checks inserted in double-window envelopes were stolen, so he asks customers to avoid using those when mailing a check.

While his own bank has been meticulous in assessing every transaction that looks suspicious, some of the other banks he has had to work with have been difficult to say the least. “One of our customer’s banks has been frustrating,” he says. “They have been ‘investigating’ one of these stolen checks for six months already, refusing to refund the money. The customer is getting irritated because we keep calling him to call his bank.”

He reiterates what he mentioned earlier — the hardest part is the negativity generated between supplier and client. And finally, a most precious commodity — time.

“It’s just been a tremendous headache and so many hours spent.”

Any readers who have been victims of check theft in Brooklyn are encouraged to contact Mr. Posner through Hamodia so he can connect them with the detectives working on his case. If more people come forward, it may help bring additional details to light. 

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Bring Back the PPOs?

Frank Albergo, National President of the Postal Police Officers Association, is a keen interviewee. He starts off by thanking Hamodia for covering a “much ignored story.”

He then describes what the PPO actually is — a federal police branch with unique powers to protect our correspondence.

These officers are the uniformed security force of the Postal Service and play an important role in the protection of employees, assets, and mail on Postal Service property. Generally armed, they wear uniforms, and operate marked vehicles to deter crime and provide physical security at Postal Service facilities. They are not to be confused with postal inspectors.

He notes that when Rabbi Meir Kahane, founder of the Jewish Defense League, was assassinated after delivering a lecture in a midtown hotel in the 1990s, it was a Postal Police Officer, Carlos Acosta, who shot and arrested the assassin. “So think of postal inspectors as investigators similar to IRS agents and PPOs as uniformed cops.”

For years PPOs were deterring mail theft by patrolling areas based on zip codes where mail theft was most prevalent. New York alone had over 300 PPOs, and there were about 2,700 nationwide. However, those numbers have declined to 90 and 400 respectively.

“To make a bad situation worse,” he says, “on August 25, 2020, the Postal Service reinterpreted [the] enabling statute in order to decrease postal police law enforcement jurisdiction, thereby ending all postal police mail theft patrolling activities. Essentially, the Postal Service is defunding its own uniformed police force in the midst of a mail theft epidemic.”

He sounds baffled by the decision.

“One would have logically thought that the Postal Service would have exercised its discretionary authority to put PPOs back out on the street again — where they are needed most — to protect postal employees and the mail. The Postal Service, however, inexplicably refuses to do so. Instead, the Postal Service insists on confining its highly trained uniformed police force to USPS real property while, simultaneously, mail theft and assaults on postal workers are increasing at an exponential rate.”

The Postal Inspection Service data revealed that mail theft reports soared by 600% over three years, from about 25,000 in 2017 to roughly 177,000 through August of 2020. He also references over 7,000 reports of violent crimes against postal employees in the past year, even including a handful of homicides. The National Association of Postal Supervisors (NAPS) has requested Postmaster Louis DeJoy to restore Postal Police Officer patrol. Thus far, the Postal Service has ignored NAPS and all similar pleas.

Ironically, the Postal Service itself touts the importance of using PPOs to protect the mail and letter carriers out on the street. Mr. Albergo points to an article on the USPS’ website from a while back which reads:

“Arriving home safely is a letter carrier’s most important delivery. That’s why the Postal Inspection Service is responding with an extra layer of security to help carriers stay safe and avoid becoming victims of street crime. In the Chicago District, that means using Postal Police Officers on street patrols.”

Yet the Postal Service’s restricting of the PPO’s jurisdiction has turned these street patrollers into “a relic of the past,” he says. “Postal Police in Chicago, New York, and other major metropolitan areas are now prevented from performing these once routine postal police patrolling functions.”

Oddly, aside for benching its uniformed Postal Police Force, it has also canceled all postal police basic training classes in 2021, 2022, and 2023.

In response to Hamodia’s question as to why the PPO’s jurisdiction has been curbed, the U.S. Postal Inspection Service said, “[b]y law, the jurisdiction of PPOs is limited to Postal Service real property and, as such, the primary role of PPOs is to provide physical security for Postal Service property at their assigned work locations,” which hardly answers the question.

Mr. Albergo closes with an impassioned appeal.

“The U.S. Postal Service is the ‘crown jewel’ of our federal government. It serves every household and business across this great nation each and every day. According to Pew Research, 91% of Americans have a favorable view of the Postal Service — leaps and bounds above any other federal agency. More than ever Americans are relying on the Postal Service to stay safe while accessing critical supplies like medication — and now — free at-home COVID-19 tests. …

“The U.S. Postal Service, perhaps America’s most beloved institution, is in peril. Postal workers are being attacked and mail is being stolen at unprecedented levels. Make no mistake, the Postal Inspection Service is doing very little about it. In fact, the Inspection Service has begun the process of defunding its uniformed postal police force during an unparalleled postal crime wave.”