ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, July 28, 1996 TAG: 9607300057
SECTION: VIRGINIA PAGE: A-8 EDITION: METRO
SOURCE: MATT CHITTUM, SANDRA BROWN KELLY, AND MEGAN SCHNABEL STAFF WRITERS
WINN-DIXIE of Botetourt County will have a new system in place in three weeks to aid cashiers in identifying bad checks.
Rodney Alls got hold of a handful of blank checks for a closed bank account last year and decided to parlay them into some real folding money. He knew just where to go.
Alls hit the most popular supermarket in Botetourt County, where he dropped three forged checks in three days, netting a total of $820.
Alls is one reason that store is known around the county courthouse in Fincastle by a name slightly different from the one on its signs - the Bank of Winn-Dixie. The name refers to the store's seemingly uncanny ability to attract check forgers.
From January 1995 to March 1996, 198 felony indictments handed down by Botetourt grand juries - or nearly half of all the indictments in that period - were for forgery, uttering and obtaining money under false pretenses. (The single act of signing and cashing a check that isn't yours draws all three of those charges.) Of the indictments for forgery, 78 involved forged checks cashed at the Winn-Dixie store on U.S. 11 in Troutville, just off Interstate 81 at Exit 150.
Those numbers actually reflect well on the store, law enforcement officials say. It means store officials are doing the right thing once they get burned - pursuing prosecution. We know what Rodney Alls did because he was caught, pleaded guilty and is serving two years in prison.
The store manager, Jerry Sweet, says it also reflects the volume of checks the outlet takes. About 70 percent of its revenue comes in checks.
But Sweet is by no means alone in his troubles.
Counterfeit and worthless checks are an industrywide problem for grocers. Bad checks accounted for a loss of more than $70 million among 65 companies operating 7,000 stores surveyed by the Food Marketing Institute in 1995. The average value of the checks was $73.14; the average loss per company was $1.2 million. Sweet said if his store is getting more than its share of that action, it's because it is one of only two major supermarkets in the county.
Whatever the cause, this store's problems illustrate how check fraud often happens.
The store doesn't have slick, electronic gadgets to monitor the checks it takes. It depends on cashiers' following policies to approve checks on their own or call a manager. But cashiers and managers are fallible, and check forgers know it.
"A lot of the people that accept the checks have very little knowledge of what to look for," said Detective Frank Leftwich, one of two Roanoke Police Department investigators who do nothing but investigate fraud, a good bit of which involves bad checks. Many people don't take check fraud seriously, he said, because it doesn't get all the sexy news coverage violent crime gets. Still, it's "robbery with a pen."
"It takes more of a gutsy person to do a check forgery because they are in there one-on-one using their charm," he said.
According to Sweet, Winn-Dixie cashiers ask for picture IDs. But Sgt. Larry Carr, a check fraud investigator for the Botetourt County Sheriff's Office, said many forgers choose stores and cashiers who know them.
That puts Sweet in a tough position. Because so much of his business comes in checks, he can't afford to make cashing them too much of a hassle.
Winn-Dixie also has a policy against taking two-party checks, or those written to someone other than the store cashing it, but that breaks down, too. The checks Rodney Alls passed at the Winn-Dixie were all written to himself on a Roanoke woman's account. It's unclear why Winn-Dixie cashed them.
Many forged checks are for $25 or $30, and they come in bunches. Forgers often can pass several bogus checks before the store gets word the first one was bad. One woman indicted in December passed seven fraudulent checks at Winn-Dixie in three days. The largest was for $36.28.
"If you see that, it usually means drugs," Carr said. He estimates about 75 percent of the check forgery cases he handles involve drug addicts raising cash to feed their habits.
In about three weeks, Sweet said, his store will have a system that will tell cashiers on the spot if an account has insufficient funds or the account is closed.
"That'll make a big difference," Carr said, but the main thing is that the store remain willing to prosecute. Eventually, word gets around to stay away from stores that do.
Leftwich, the Roanoke investigator, estimates that only about half the area's stores choose to prosecute. The rest take the loss and pass it on to customers.
And, as crooks become more sophisticated, the problem is getting worse.
"The increase in fraudulent checks is tied directly to the accessibility of personal computers and printers," said Jim Reeves, Roanoke-based director of risk management for The Kroger Co.'s Mid-Atlantic Region, based in Roanoke.
Grocery chains wouldn't talk about their security measures in detail; they don't want to help counterfeiters and forgers get around the system, they said. But they do take measures to cut down on check problems.
Kroger's system, for instance, is designed to flag multiple cashings of the same check number, as well as to alert the cashier if Kroger has taken bad checks from the account in the past, Reeves said.
But technology isn't enough if cashiers aren't diligent.
Investigator Steve Perry of the Huntsville, Ala., Police Department said counterfeiting checks is becoming common everywhere. His area is among those being hit hardest by a ring of counterfeiters based in Birmingham, Ala.
Perry's investigators have piled up checks written on Coca-Cola Co., J.C. Penney Co., even a Sears, Roebuck & Co. fake check made out to Ezetrick Coleman. The grocery clerk who cashed Ezetrick's check didn't even catch the joke, he said.
The counterfeit checks look official, but the information often doesn't jibe, he said. An address might have a wrong ZIP code, for example.
Jack Swint, a Roanoke Valley man who created and cashed counterfeit checks throughout the Southeast, said cashiers often don't pay enough attention to the information on checks.
"I could have my picture upside down [on an ID] and have `U. Ben Had' on the name, and they'd never notice," said Swint.
The proliferation of 24-hour self-service copy shops also has contributed to the ease with which counterfeiters can ply their trade. Swint, for instance, used Kinko's. He planned his check-cashing trips around their 851 locations.
"I guess the ironic thing is that it says it's your 24-hour office," Swint said. "Kinko's has made it real simple."
Most Kinko's locations keep their full-color copiers behind the counter, but the same stores often provide "accent color" printers in the self-service area. These machines will reproduce documents in red, blue, brown or green - all the colors Swint needed for checks and drivers licenses.
Laura McCormick, spokeswoman for Ventura, Calif.-based Kinko's, said the company's employees are trained to look for customers who may be using copiers to create counterfeit documents or violate copyright laws. But training isn't always enough, she conceded.
"We can't monitor every customer, because of the self-service situation," she said. "There have been incidents [involving counterfeiting] in the past. Fortunately, it hasn't been pervasive."
If any of the chain's 23,000 employees are found to be facilitating the illegal use of a copy machine, she said, they would be dismissed. "We take it very seriously," she said.
The police in the Roanoke area take it seriously, too. Each month, all the fraud investigators in the area meet to compare notes. Since fraud perpetrators often work in multiple jurisdictions, investigators can help each other. A lead in Botetourt might land a conviction in Roanoke and Salem.
Their methods of detection, including analyzing everything from fingerprints to the type of printer used on counterfeit checks, are getting more sophisticated, too. But these investigators' jobs are pretty secure for now.
"No matter how hard you try," Botetourt's Carr said, "they're still going to slip them in on you."
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