The Art of the Steal

3

[COUNTERFEIT CAPERS]

I once was interviewed about fraudulent documents by Sam Donaldson of ABC television. During the interview, I dug into my briefcase for a moment and pulled out a piece of paper. I handed it to him and said, “By the way, have you seen this letter?” He studied the sheet of paper and his eyes got very wide. “Wait a minute, where did you get this?” he said.

It was a letter of reference on ABC stationery, extolling the many virtues of Frank Abagnale. It was signed by Sam Donaldson.

“You sent me a letter two days ago confirming our interview,” I said. “I scanned the ABC letterhead into my computer. I matched the paper—it was just standard linen paper—with paper I bought at the local stationery store. Then I wrote the new text and printed it out.”

“But what about my signature?” he asked.

“I scanned that off your letter, too,” I said.

That was just a fun thing I did to illustrate a point. But I’m far from the only one doing it. We’re literally awash in phony documents, and I’m not talking simply about those fake IDs that teenagers buy in Times Square to allow them to purchase beer and gain entrance to clubs. Counterfeit documents of every imaginable kind have proliferated: birth certificates, death certificates, Social Security cards, driver’s licenses, store receipts, medical prescriptions, product labels, traveler’s checks, event tickets, amusement park passes, coupons, car titles, green cards, diplomas, college transcripts, passports, voter identification cards, and, the most counterfeited piece of paper of all, money itself. Almost anyone can professionally forge or counterfeit a wide variety of documents, day after day, for an investment of just a few thousand dollars.

Because so much fake paper is floating around, I caution managers that when they hire someone for a sensitive position, it’s more than credentials that they need. They have to make phone calls. They have to write letters. Don’t trust a piece of paper, because anything can be replicated. Just ask Sam Donaldson.

It’s gotten so bad, even the FBI is changing its credentials. Since the days of Hoover, they’ve had the same ones—reused. When an FBI agent retires, he turns in his credentials and a new agent receives them. Now the agency is redoing them with holograms to make them harder to counterfeit.

A CHAIN IS ONLY AS STRONG

AS ITS WEAKEST LINK

The real travesty here is the chain-link effect of counterfeit documents. What happens is criminals use counterfeit papers as “breeder” documents. A breeder document is a phony document used to obtain a genuine one. Generally speaking, criminals will counterfeit a document that has little, if any, security features and then use that to get far more secure legitimate documents.

In most cases, a birth certificate contains next to no security features, so it has become an ideal breeder document. Criminals will create a fake birth certificate to obtain a genuine driver’s license, then use those two documents to get a legitimate passport. Once you’ve got that first authentic document, you’re pretty much on your way. After all, the right documents allow people to get unauthorized benefits, to land jobs they’re not entitled to, to gain illegal entry into a country, to construct new identities, and to fraudulently obtain credit cards and loans.

There’s always been a lot of Mom and Pop document fraud, and there still is, but there are actual document syndicates today that are as well-organized as major corporations. There’s actually a standard counterfeit package that immigrants buy that consists of a resident alien card, Social Security card, and driver’s license. Gangs in big cities like Chicago, New York, and Los Angeles sell these ensembles on the street. The criminals will brazenly approach foreigners in broad daylight and ask, “What do you need?” Estimates are that counterfeit and illegally-obtained documents cost the country something on the order of $25 billion a year. In late 1998, Immigration and Naturalization Service (INS) agents raided two storage facilities in Los Angeles and rounded up more than two million counterfeit identity documents. The agency estimated that the street value of that paper was in excess of $80 million. Hardly chump change.

GOODBYE PEN AND INK MEN

Technology has made life so much easier for the counterfeiter. Years ago, a document counterfeiter was known as a “pen and ink man.” He worked meticulously by hand and needed steady nerves. That’s all changed. To get an idea of the impact of technology on crime, consider the color copier. In late 1977, Xerox invented the machine called the Xerox 6500 Color Copier. And it was quite a machine. At that time, it was considered the most advanced copier in the world. People were reproducing full-color documents in a matter of seconds. All a forger had to do was lay a real check on the machine, close the cover, push a button, and out would come a duplicate check that looked just like the real thing. Forgers loved the Xerox 6500 so much so that they cashed more than $365 million worth of phony checks color-copied by the machine.

Twenty years later, it’s an antique. These days, forgers interested in a wide array of documents use a product called the color laser digital copier, again found everywhere. The quality of the color copies produced by this machine is truly remarkable. Nearly anything on paper can be acceptably reproduced: gift certificates, traveler’s checks, birth certificates, college transcripts, car titles, and even money. It can reproduce such magnificent colors that you couldn’t tell the real thing from the fake even in a side-by-side comparison. Color copiers are so proficient at reproducing dollar bills that, in most cases, the bogus bills will go through a vending machine. They’re so realistic that you find them in ATMs.

If you want to stop document fraud, you have to start building layers of security features into the documents. Because I’m in this business, I even have an array of features on my company letterhead. If Sam Donaldson tried to scan one of my letters the way I scanned his, he’d be in for a rude shock: “void” would show up all over the document.

YOU DON’T NEED A STORK

To counterfeiters, the birth certificate is one of the choicest documents of all, because so much can be accomplished with it. Since it’s accepted by just about every government agency as proof of one’s identity and citizenship, it’s the key to getting a host of benefits and other documents. Thousands of state and local registrars’ offices issue birth certificates in the United States. Many of them produce more than one type. Also, states have revised their certificates many times over the years, and both the old and the new variations are all in circulation. Add this all up, and there could be more than ten thousand variations of the U.S. birth certificate in existence. And that’s great news to a counterfeiter. The more renditions of a document, the harder it is for anyone to say that the one that you have is false.

Some birth certificates have very good security features. Some have none at all. I guess it’s obvious that the best birth certificate to use fraudulently is a genuine one. Normally, it doesn’t take a lot of effort to get one. In many states, birth certificates and death records are part of the public record and are readily available to anyone for the asking. I’ve seen estimates that more than 80 percent of requests for birth certificates are processed through the mail for people who gave nothing more than a name and a return address. Some states have a few requirements, but nothing so onerous that a smart criminal can’t circumvent them. For instance, in certain states, only the next of kin or an attorney can request the birth certificate. But you don’t have to go to law school to become a lawyer. All you need to do is pay a visit to a print shop and get some business cards and letterhead that will transform you into a lawyer, enough of one, at least, to get access to public records.

As with checks, forgers are adept at altering birth certificates. The biographical information is printed onto the surface of the paper. This means it’s easy for the forger to remove it either mechanically or chemically, substitute new information, and be left with a genuine document imprinted with phony information, which can be very hard to detect. And with document scanners, computers, copiers, and the other technologies I’ve mentioned, it’s quite simple to run off counterfeit birth certificates that will pass muster.

I’ve designed high-tech birth certificates for a number of states to guard against counterfeiting and alteration. The security features void the document if someone tries to copy it or chemically change it with bleach, acetone, or other substances. But I tell state officials, “This isn’t going to stop an impostor from getting someone else’s actual birth certificate. You need to make it harder for that to happen.” And their response is, “Well, we know that, but that’s another issue.”

I no longer get involved in securing a state’s birth certificate or driver’s license, if they’re not going to close the other loopholes. A few years ago, I worked on the Florida certificate. Florida makes it very hard to get a legitimate birth certificate. But the document itself was easily counterfeited. And with all the illegal immigrants down there, it was a highly desirable piece of paper. In Miami, a Florida birth certificate had a street value of five thousand dollars. So I designed a very secure document, and the counterfeiting problem has abated.

PICK A LICENSE, ANY LICENSE

Driver’s licenses were initially intended simply to confirm that the holder had the right to drive in the state. But our customs have transformed them into commonly requested identity documents as well. And that has made them of keen interest to criminals.

The validity of a license is hard to determine, because there are so many in circulation and they differ so much. There are hundreds of variations, depending on when and where they were issued. In many states, you can get a legitimate driver’s license simply by showing a driver’s license from another state. Virginia, for instance, does that. So if you get away with passing off a counterfeit Kansas driver’s license in Virginia, bingo, you can obtain a real Virginia one.

In California, they spent a fortune on their new driver’s license. They put holograms on them, used sophisticated sealants in the printing, just poured a ton of money into the design. And a few months after the new license was introduced, the police arrested a forger with fifty licenses in fifty different names. Why? Because it was still easy for someone to go to the Driver’s License Bureau and get a license with false identification. I told the state, “All you’ve done is stop some kid from changing the birth date on his license in order to buy a beer.”

Either close all the loopholes, or you’ve closed none.

FEELING SECURE?

Another case in point is the U.S. passport. We all know how handy a fake passport is to a crook on the lam. So it makes a lot of sense to really secure it. The passport has long had some good features, and I added a new one a few years ago. For the U.S. passport, I helped develop with Standard Register a technique called Mirage Image, which adds encrypted information onto the passport photo. When you put a special piece of milled glass over the photo, your name and birthday are visible. The passport has become a hard document to successfully counterfeit, which is why a fraudulent American passport commands ten thousand dollars on the streets.

Unfortunately, the other loopholes haven’t been closed. Nearly anyone can acquire a fake Social Security card and birth certificate that are good enough to get a genuine passport. Until these other documents are made more secure, the passport remains at risk. Right now, the U.S. Social Security card is about as vulnerable as it gets. Border Patrol Agents routinely intercept thousands of fake Social Security cards every year at traffic checkpoints. In 1999, they collected something like a hundred and twenty thousand of them, more than one every five minutes. This is frightening, because the Social Security card has become our ad hoc identity card, enabling the holder to collect government benefits and to certify that he’s eligible for employment. When you flash a Social Security card, people know you’re for real.

At the moment, there are more than twenty different versions of the Social Security card, and they vary a great deal in their security features. Earlier cards, meaning those issued prior to October of 1983, have no security features whatsoever. Those issued since then contain various things like intaglio engraving and microprinting. But criminals know that it’s possible to get a genuine Social Security card if you have one of two other documents: a birth certificate or a resident alien card.

In recent years, the INS has been steadily tightening its own documents. Just a few years ago, the INS had twenty different types of Permanent Resident and Employment Authorization cards that were valid, too many for comfort. Now there are just five. No longer are the cards good for a lifetime, the way Social Security cards are, but expiration dates have been added, which enables the agency to update photos and implant new security features when a card is replaced. One new feature is a personalized engraving of the person’s photo, signature and biographical data right on the optical stripe. These are important steps in the right direction, for they make it just about impossible for counterfeit cards to be mass produced.

BALL PARK PRANKS

Large public events of any type—sporting, political, religious—invariably draw a great many uninvited participants: crooks. Con artists go where the money is. Wherever there are crowds, there are opportunities for scams. You’d be amazed at how common it is for criminals to make counterfeit tickets and passes. It routinely happens at the World Series, the Super Bowl, and big golf tournaments. Two disasters at soccer matches where scores of fans were injured, some seriously, were attributed to stadium overcrowding. Why were the stadiums so crammed? Because thousands of people had gotten in after buying counterfeit tickets from scalpers.

I’ve worked on a lot of golf passes and the Disney World pass. Generally, I put an invisible dot on them. Then the guard at the entrance gate has a reader that reveals it. Disney also has cruise ships. Most of the employees are foreigners who need a special pass that allows them to get on and off the ship, and so I designed a secure version of that, too, which is printed by the Standard Register Company. With these documents, it makes no sense to incorporate the level of security features that you would put into a check, because you have to consider the value of what you’re securing. If a pass is worth $30, it only pays to put maybe one security feature on it. But a check can cost you millions of dollars.

I served as a consultant to the 2000 Summer Olympics in Sydney, which, from my perspective, I envisioned as a possible gala fraud festival. Before I even got on a plane to go there, I realized that there were bound to be millions of dollars in losses from various cons at the games. At the Atlanta games, traveler’s check fraud alone totaled more than $4 million, and there had been enough improvements in technology during the four ensuing years to make life easier for criminals.

I knew Australia was receptive to fraud. I had heard that there were something like three million more federal tax ID numbers issued in the country than there were actual Australians, which is not a promising sign. Plenty of counterfeit money was bound to be put into circulation—not the Australian currency, but American bills. Forgers don’t do the local currency, because people are familiar with it. American bills were ideal, because newly-designed five-dollar and ten-dollar bills had just been released the month of the Olympics. Even Americans weren’t familiar with them. When I visited the major Australian banks, they already had plenty of samples of fake bills that had crossed their teller windows.

At any event where there are limited tickets for which there is great demand, bogus tickets are always a nettlesome problem. I advised the organizers of the Olympics to use Australian printers to print the tickets for the games, because my experience has been that Australia has some of the best printers of secure documents in the world. In fact, I have all of my corporate checks and personal checks, even my business cards, printed in Australia. The printers there are not only good at making documents secure, but they’re true craftsmen.

For whatever reason, the organizers of the games didn’t follow my advice, and the contracts were given to a small company in Arkansas and another one in England. I thought that was an unwise decision. Even if those printers did a stellar job, there was all the handling of the tickets from America and England to Australia that presented opportunities for fraud.

WHAT TO DO

Since you can’t expect ticket holders to differentiate between genuine and counterfeit tickets, electronic verification systems are necessary at the entry points to big events. As an added precaution, ticket holders should always carry their receipts with them in case someone turns up in their seat with a fraudulent ticket. And I tell people to be wary of anyone who offers to sell tickets for less than their true value; it’s usually a sign that they’re fake.

Because I’m always interested in how prepared people are for con artists, I went around with a reporter to some of the shops in Australia. We dropped in on a clothing store, and the reporter asked the clerk, “If someone came in here and wanted to buy a sweater and all they had was a hundred-dollar American bill, would you take it?”

“Oh, no,” the clerk said, “I’d tell him to go to the currency exchange and bring back Australian money.”

Satisfied that the man was on the alert, the reporter was ready to leave, but I wanted to rephrase the question. I asked the clerk, “Suppose someone came in and said, ’Gee, I really like that sweater. I see it’s the equivalent of seventy-five American dollars. Listen, I’m in a big rush and I don’t have time to get change. Why don’t you take this hundred-dollar bill, and we’ll call it even.’ What would you do?”

“I’d take it in a minute,” he said.

He would have sold a sweater for nothing. And the con man would have gotten a sweater for a bill that probably cost him ten cents in paper. See, the con man knows that the clerk wouldn’t take the money. And he knows how to exploit human nature and go to the next step. That’s why you can never let your guard down.

And the tricks never cease. A couple of years ago, I was hired by Go Transit in Toronto, the metropolitan transit agency, because they were being hindered by ticket fraud on their buses and trains. The ticket they used was a thick piece of paper, with the same fare information printed on both sides. Kids were taking tickets home and putting them in the freezer overnight. When they took them out, the paper was split perfectly in two. Most paper will split when frozen. So they now had two tickets. Go Transit was losing something like a couple of million dollars a year from the scam. I redesigned the ticket using a special paper that won’t split, making for a lot of grumpy kids who had to start paying the full fare again.

MY DENTIST FOR LIFE

There’s nothing that you can look at today and be certain that it’s real. And that opens a lot of doors. Interested in getting some drugs? That’s not a problem. You put on a nice suit and go down to a dental office in a wealthy part of town at eight forty-five in the morning and tap on the glass. “Excuse me,” you say, “I woke up this morning with this abscessed molar. I’m in serious pain.”

The receptionist asks if you’re a patient. “No,” you say. “I just moved to town, but everyone told me he’s a great dentist and if I can slip in this morning and see him, he’s my dentist for life.” The receptionist checks with the dentist, and comes back and tells you that he’s booked up solid, but he’ll stay late and squeeze you in at the end of the day. He’s sympathetic to your anguish, she says, so he’s given you a prescription for a painkiller. You take the prescription, make fifty copies of it, go to fifty pharmacies, and you’ve got fifty bottles of painkillers to sell on the street.

For a new college graduate to get a good job, or to get into a top-notch graduate school, he needs the best transcript possible. But if his actual transcript doesn’t quite pass muster, that’s easy enough to rectify. He scans his transcript into his computer and, in a revisionist touch, improves his 3.0 grade point average to a perfect 4.0. Many employers and graduate schools require applicants to send in their transcripts through the registrar’s office, but that’s fine. You simply call your university and ask them to mail you a university application. When you get the material, which comes with a nice letter from the registrar, you scan the university’s logo, letterhead, registrar’s envelope and signature, and mail it off. One thief had the nerve to put a counterfeit degree and transcript from the University of South Florida up for auction on eBay. He offered it for fifty dollars. Seventeen bids later, it went for $356.

Here’s another clever idea made possible by new technology. Crooks today can go to a junkyard and find a late-model Lincoln Continental that had been totaled in an accident and buy it for one thousand dollars. The car is such a wreck that they can’t even drive it, so they tow it to their home. They say, “Why don’t we go down to the credit union and get a loan against the car? They’d give us twenty thousand dollars on it easily. We give them the car title for collateral, they give us the loan. The car title doesn’t say the car is a wreck [only recently have some states started issuing different titles for damaged cars]. A week later, we’ll default on the loan. We’ll go to another credit union and get another twenty thousand dollars. Then we go to another, and another. In just a few trips, we’re out of here with one hundred thousand dollars from a car that won’t go around the corner.” One of the crooks might wonder, “But how could we get another loan when we gave the first credit union the car title?” And one of the others will reply, “I didn’t say give them the car title, but give them a car title, a copy that we make.”

Five years ago, that was impossible to do, because in all fifty states car titles had to be intaglio engraved. In order to reproduce the engraving, it would take at least a half million dollars in equipment and considerable skill. Today, with a digital copier, I just place the car title on the machine, put a piece of paper in the cassette, and make a copy. I pick up the copy, put it back into the cassette, make another copy, and then another and another. Each time I make a copy I’m building up toner over toner over toner over toner. After the fifth copy, I have the exact raised lettering, the exact engraving, the exact seal of the original. And that’s why con artists regularly pull off precisely the scam I described above.

MALL MADNESS

You go to the mall nowadays, and invariably, some guy will ask you, “You want to buy a gift certificate for the mall?” So you take one for two hundred dollars. He asks you what name to put on it. You tell him that you don’t know who you’re going to give it to, just leave it blank. You go home, type in a name, make fifty color copies at the local copy shop, and return to the mall. Companies that issue gift certificates vastly underestimate the quality of color copiers. Most gift certificates can be copied without a single telltale sign. In fact, in many cases the color copies actually look sharper and brighter than the originals.

These new mall gift certificates are wonderful, because they’re honored at virtually any store in a mall, as well as any store in other malls handled by the same management company. This is a great consumer benefit, and a great criminal benefit. A criminal will go to a mall in Miami, buy a gift certificate, make a hundred copies, and spend that same gift certificate in New York, Los Angeles, Atlanta, and fifty other malls around the country. What a terrific way to travel during the holidays!

During the Christmas rush period, harried and inexperienced sales clerks haven’t a prayer. So you take your $200 gift certificate to the Gap, buy some $50 jeans, and get the $150 change in cash. You go to the frame shop, buy a $28 frame, get the change in cash. One of the things criminals love about gift certificates is they’re as good as cash. Most stores are happy to give cash when making change after a purchase. And since many companies reconcile their gift certificates only on a sixty-to-ninety-day cycle, criminals have plenty of time to complete their holiday shopping.

The security people at the malls call me all the time and say, “Hey, the mall’s getting killed. Thieves are hitting us with all these color-copied gift certificates.”

I tell them, “You have to put out a bulletin to all your store managers about the names on the gift certificates.”

“Uh, we don’t put names on them.”

“Well, you need to send a bulletin out about the serial number of the gift certificates,” I say.

“Uh, we don’t put numbers on them.”

“Well then, you need to tell me where you’re calling from so I can come and buy some of those gift certificates.”

Remember, if they have value, they’ll copy them.

SHOP ’TIL YOU DROP

Con artists have a particular fondness for store receipts. They’re a living in themselves. I was once visiting with the head of security for one of the big discount chains, and he was telling me how incredibly secure his stores were with all their cameras and gadgetry. “Really,” I said. “Well, let’s see.” I walked with him outside the store entrance, rooted around in the trash receptacle there, and fished out a receipt. Customers are constantly throwing away their receipts as soon as they leave a store. I examined the receipt and noticed it included a toaster oven. So I went with the security head to the small appliance area and picked out the same model toaster oven. I told the security director, “Now all I have to do is go to customer service, tell them I just bought this and need to return it, and I’ve just conned the store.”

Criminals aren’t content to just go with what they find in the garbage, and so naturally they make their own fraudulent receipts. Several years ago, Macy’s had a nagging problem with criminals. Armed with fraudulent receipts, the criminals went to the store, picked out the items they had listed on the fake receipts, and then returned them for cash. The clerks at Macy’s had no way of distinguishing a real receipt from a counterfeit one. I was brought in and redid the receipt by adding “Macy’s” on the back in thermochromic ink. Rub your finger over the word and the body heat causes it to disappear. Macy’s trains all of its help to check receipts with their fingers, and the problem has been cured.

A few years ago, there was a guy who drove all over the country in a white Cadillac who had his own inventive scam. One of the big store chains would regularly put its fine jewelry on sale for 50 percent off. This guy would anticipate these sales and go in and buy a necklace or bracelet at full price. The chain had an arrangement where, if you had bought an item of jewelry just prior to the sale, you could come in with your receipt and it would give you the difference back in cash. First, he would take his receipt to a local copy shop and make two hundred copies. Then he’d return the necklace and hit the road. Whenever he encountered another store in that chain, he would bring in one of his fraudulent receipts and get a refund of half the price. He didn’t need to show the necklace, just the receipt. He did this for years. He’d park his Cadillac illegally in the fire lane outside a store, dash in, collect his cash, and head to the next store. Eventually, the chain figured out how to stop him. It ceased offering the cash-back arrangement.

Some of the techniques used to fleece businesses are surprisingly simple, but they can be raised to the level of art by rings of criminals. If I had to anoint the King of the Receipt Scam, it would be Rondal Vickers. Vickers is a sixty-two-year-old Florida man, and an Air Force veteran with a generous white beard. He goes by the name Santa Claus. It’s an unlikely nickname, since he was the ringleader of a crime group composed of as many as twenty thieves known as the Vickers Gang. For more than thirty years, it carried out an elaborate refund scam that was reliant on counterfeit receipts and UPC labels. (In their spare time, the gang indulged in gift certificate fraud and insurance fraud, once collecting insurance claims six times on the same Corvette.)

Santa Claus pretty much had theft in his blood. He got started as a checkout cashier at a Winn-Dixie and augmented his paycheck by never ringing up purchases of beer. Whenever someone had beer mixed in with his groceries, he would pretend to have forgotten to ring it up, hit “no sale” on the register, and then ask for the amount, which he pocketed. From that beginning, he built a formidable organization. One of the masterminds was a fifteen-year-old runaway named Jodi Vickers, who became Santa Claus’ wife. The gang traveled all over the country, generally in “sprees” lasting six to eight weeks, and then they would return to their home base in Florida until they needed to steal some more money. They preyed on the national mass-market retail chains like Wal-Mart, Kmart, and Target. Santa Claus was particularly fond of Target, because it kept enhancing its security in order to foil him. To feed his ego, he relished the challenge of beating the toughest system, so he’d often send his soldiers to the other chains and devote his own devilish energies to Target.

The Vickers Gang had multiple scams in its arsenal, but its most common dodge was something it referred to as “marking down.” Members of the gang would visit one store in a chain and identify a sale item. For instance, they’d pick out a tent that was on sale for $19.95. They would jot down the UPC number, and with a hand-held UPC gun anyone can get from a retailer supply house, would make a counterfeit UPC label. They’d return with the label cupped in their hand and stick it over the actual UPC label of a higher-priced tent, say one selling for $129.95, and then put the tent in their shopping cart. They’d mosey around and pick up a shirt, some pants, a bottle of shampoo, maybe some chips and dip, enough other goods to get that receipt high enough to exceed $129.95. Say they’d get it to $149.95. At almost all stores, the receipts didn’t have what’s known as line-item detail. When you returned something, the store computer would read only the header at the top of the receipt. That header gave the date and time of transaction, as well as the total amount of the purchase, in this case $149.95. But the computer won’t search the list of items on the receipt and see if they matched a purchase record stored in the computer.

Once they got out of the store, the crew members would remove the phony UPC label. They’d scan the header of the receipt and then print out a counterfeit receipt containing that header, but with a new list of items, including a tent for $129.95. They would use distraction to steal cash register paper right out of a cash register, so they could print the fraudulent receipt on the actual paper of the chain. Finally, they’d go to a sister store in another town with the receipt and return the tent, earning $110 for their effort. When the customer service representative looked at the receipt, he’d see the tent there and the computer would satisfy itself that the header included a sufficient amount of money. The Vickers Gang would print up additional phony receipts to return as much as possible of the other items, though some of the things they kept because they needed them. In this way, they made as much as $4,000 a day during busy shopping periods. They liked tents because there was such a wide price range. They also liked golf clubs, and for a while they made a killing returning submersible water pumps to Home Depot.

BUT THERE ARE ALWAYS RULES AND REGULATIONS

The Vickers Gang operated like a well-oiled business. Santa Claus schooled his members in a list of professional rules and routines they were to faithfully obey. For instance, the Vickers Gang never did their marking down in the morning, except around Christmas when the stores are continually packed and clerks are easily distracted. Otherwise, they avoided mornings because that’s when clerks and other store employees are most alert. The Vickers Gang would do its shopping in the afternoon, after the clerks have been there for four or five hours. By then, everyone is worn out. Cashiers just want to get you out of there, because they’re ready to go out on a date or pick up their kids, and they just want the last two or three hours at the store to end.

They were told never to return something in Minneapolis with a receipt they got in Chicago. Clerks get confused with out-of-state receipts, because the chains often have different style receipts in different states. They won’t recognize them and will then call the manager. You never want the manager to get involved. Another rule was not to return something with a receipt dated thirty minutes ago to a store an hour away. Also, they were forbidden to return the same type of item twice to the same store. If you bring back pots and pans one day, don’t return pots and pans next week. You can bring in a jacket or a microwave, but not the same thing. There’s always the risk that the store will have figured out the pots and pan return after you left.

Determined to stop the Vickers Gang, Target was fastidious about incorporating fresh security features into their receipts. But when company officials go to sleep at night, criminals stay up late working on new ways to beat the system. The genius about Santa Claus and the Vickers Gang was their ability to adapt. Within days of a retail chain making alterations in its systems, they would make the appropriate changes in their operations. After all, when they began, there were no UPC codes, just ordinary price stickers. So they counterfeited the price stickers. Stores had manual cash registers. So the Vickers drove around with an NCR cash register in their trunk, and would make their counterfeit receipts on the register. When clerks looked at a receipt when he was returning something, Santa Claus would sometimes joke, “If you don’t like that receipt, I can just get another one from my trunk.” When stores moved to computers, they followed suit. At one point, Target switched to a restricted cash register ribbon that printed in two colors of ink, so that the top half of a number might be black and the bottom half red. The Vickers Gang tried unsuccessfully to buy one of the ribbons, and finally managed to steal one.

The Vickers Gang had a long and prosperous run, and some narrow escapes. Sensing she was being watched, Jodi Vickers once had to peel off a bunch of labels she stuck on some pots and pans and chew them up. Both she and her husband got caught in a Kmart but were let off with probation. But the work of Target investigators and law enforcement agents finally succeeded in catching Santa Claus and his gang in Florida in the mid-1990s, and he was sent to prison. He never paid any restitution. While he was in jail, Target became one of the few chains to switch to line-item detail on its receipts, which is what I strongly recommend. When you bring something back to Target now, the computer in the store will not only read the header but also search for that particular item and see that it matches the purchase record in the computer’s data base.

Jodi Vickers agreed to cooperate with prosecutors and received probation. The last I heard, she was remarried, working for the Florida Motor Vehicle Department, of all places, and writing cookbooks for people with gout. Toward the end of 2000, Santa Claus was released from jail. His feet were in bad shape from gangrene, but Target and other retailers put their stores on alert that he was once again a free man. Even at this late date, no one is willing to bet that he is planning to go straight.

THE JOYS OF TRAVEL

Traveler’s checks are another favorite document for criminals to counterfeit, because they can be readily converted into cash. Traveler’s checks are pretty secure. The problem is not enough people who take them know how to recognize the security features, even though it’s not hard, since there are only four brands of traveler’s checks in the world to remember.

The first thing to know is that all traveler’s checks begin with the routing number, 8000. This is the number assigned to traveler’s check companies. Forgers who forge traveler’s checks go to a great deal of trouble and expense to engrave them. In order to make their money back, they need a lot of time to pass them. To give themselves this time, they will remove the 8000 code and insert the check code of a bank located a far distance from where the checks are being cashed. This will give them just enough time to float those checks, so they can cash them. So remember, the only acceptable routing code on a traveler’s check is 8000.

Every traveler’s check also has security features in its paper. For instance, if you hold the Thomas Cook traveler’s check up to eye level, you will discover the image of a Greek goddess to the right in a circular watermark. It’s visible front and back. If the lady’s there, the check is legal. If you don’t see her, it’s worthless. Don’t feel it, don’t look at it, simply bring it up to your eye and see if she’s there.

If I give you a Visa traveler’s check, there will be a big white spot over on the left. If you bring it up to eye level, there will be a two-tone dove flying in it, visible front and back. And the line where you sign your name, as well as the countersignature line, are not truly lines but the word “Visa” repeated over and over in microprinting visible under a magnifying glass.

The Citicorp check has a white spot on the right. If you bring it up to eye level, a Greek god’s face appears inside the spot.

The American Express check has a centurian printed on the left, but when you look closely, there’s a centurian on the right in a white spot. If you still have any doubt about the authenticity of an American Express traveler’s check, turn it over so the back is facing you. Take your finger, wet the tip, and run it across the left denomination. If the image smears, then it’s good. If it doesn’t smear, then the check is worthless. American Express treats the left denomination with a chemical enzyme so that on contact with saliva or water, it instantly smears. Remember, only on the back left-hand denomination. You can go after the one on the right with Comet cleanser and a toothbrush and it won’t change.

Finally, on the front of American Express traveler’s checks, you’ll notice that it says, “Pay this cheque to the order of United States dollars.” Many times, Canadian-issued traveler’s checks will pass as U.S. currency. On Canadian checks, it says, “Pay this cheque to the order of Canadian dollars.” Make sure that when you’re cashing it you’re cashing it for the right country’s currency.

DOES IT GET ANY BETTER THAN THIS?

If you’re going to counterfeit something, I guess it doesn’t get any better than money. As it turns out, the most counterfeited currency in the world is the American bill. That’s because it’s easiest to reproduce. Most foreign currencies are made up of at least six to eight colors of sophisticated background and etching. In comparison, the American bill is made up of just two colors. With today’s technology, counterfeit American currency comes quite close to the real thing. And there’s a lot of it out there. In 1999, $52.7 million in fake currency was recovered in the United States.

In 1995, 0.5 percent of all the counterfeit money in circulation was done on the personal computer—in other words, none of it. Back then, the Houston police arrested some counterfeiters and brought them into their interrogation room. Where’d you get the money? they asked. The counterfeiters admitted that they worked for a printing company. They had a key to the back door. On the weekends, they would go in, cut the alarm, and print stacks of money on a high-speed printing press.

Now when the police arrest counterfeiters, they hear an entirely different story. It turns out that more than half of all counterfeit bills are produced on a personal computer in the privacy of a home, and by someone younger than nineteen. Kids are sitting in their rooms, fooling around, and one of them will say to his friend, “Look at this. I place this twenty-dollar bill on the scanner and watch what comes up on my screen.” “Wow,” the friend says. “Check the detail.”

So the kid goes down to an office supplies store and buys some rice paper, the closest paper to currency paper you can buy, loads the paper into his color ink-jet printer, and prints out bills that look great. He could pass them anywhere. So he goes to the school cafeteria, buys his friends lunch, and the cashier doesn’t bat an eye. He takes a trip to the mall, and no one says a word. So he starts printing them all the time, and his parents no longer need to give him an allowance. He can give his parents an allowance.

Now, if your kid is more of a purist, he can try this scam. Go into a bank and ask to buy five hundred one-dollar bills. If the teller questions him about why he needs all of those singles, he can say, “Well, it’s not your business, but if you really want to know, our school has a school project and they take money at the commissary, and we need change.” He goes home and washes the bills in a washing machine with a bleach eradicator that washes all the ink off so they come out as blank bills. He scans a twenty-dollar bill, puts the bleached bills in the printer, and ink-jets twenties. Now he’s got real currency with inflated amounts on them. It’s a trick that started in Colombia and has been imported here.

Another common type of counterfeit bill is the paste-up bill. This is where a dollar bill is converted into, say, a twenty-dollar bill or a five into a fifty or a ten into a hundred. Most commonly, however, the paste-up artist converts ones into twenties, because they’re easiest to pass. The paste-up artist never changes the back of the bill, only the front. And all he changes are the denominations in the corners. The giveaway is that George Washington is still staring out from the center instead of Andrew Jackson, and there’s a one written across the seal. So it’s worth paying attention to who’s in the center when someone gives you a twenty-dollar bill.

One more thing kids love to do is copy five-dollar bills. They take the bills to a local copy shop. They place them on the machine and copy them right onto white bond paper. They only copy the front. They don’t bother with the back. Then they cut out the copies and go to the video arcade, the laundromat, or the car wash, or anywhere that has a change machine. All change machines work on the same principle. Inside the machine is an optical scanner, and it only scans one side. If a facsimile is within 5 percent tolerance, it goes through every time, and these copies make the cut.

FIGHTING FIRE WITH FIRE

The way we fight technology is with technology. Real money has always had its protective features that have made counterfeiting something of a challenge. Genuine money is printed, then engraved, then intaglio engraved, which gives it depth. The intaglio engraving is what makes it tough to duplicate. On real money, the portrait of the famous American in the middle looks three-dimensional. The eye sockets look sunken, the hairline recedes. This is three-dimensional engraving. On a counterfeit bill, these items appear flat, like a picture in a newspaper or a magazine. The real bills are printed on special paper made under government control; it’s fibrous and strong, and red and blue fibers are visible. Over the Treasury seal are tiny hash marks which make up the word or number of the bill’s denomination. On real money, you should be able to read the words on the seal clearly. Even on the best counterfeit bill, the hash marks become bars, making it difficult to discern the words of the seal.

But technology has overwhelmed these safeguards, and so the government has battled back with a new round of technology. In 1996, for the first time in seventy-two years, the government made changes in the currency. Over the last few years, these new bills have been introduced with additional security features. Then the government said, don’t worry, we won’t change them again for another twenty-five years. Actually, they’ll be changing them in 2003 to multicolored bills with additional safeguards, because technology has already found ways to defeat them.

The new bill is actually not a bad bill, but the problem is that the people who take it have no idea what to look for in order to gauge whether it’s real or fake. Management hasn’t taken the time to teach them. What management prefers to do is go out and buy them a cheap one-dollar pen. It tells them, just take this pen and mark the bill and if it stains then you know the bill’s good. That pen is ridiculous. All it has is a chemical that checks the Ph level of paper. That’s all it does. Money has a very high Ph level, because the paper is bleached white in order to engrave it. But so do about thirty-five hundred other stocks of paper that are sold at office supplies stores. And even if you didn’t have that paper, take a sponge, dip it in a pail of Clorox, wring it out, and pat it on the paper you’re using. When it dries, the paper will have the same Ph level.

We’ve become so utterly convinced of the authority of this pen. A clerk will run the pen over a bill and say to the customer, “Well, even though you’ve got a misspelling on this bill, as long as it’s got that mark on there, no problem, I’ll take it.”

WHAT TO DO

I tell people who handle a lot of money, take five minutes and learn the proper way to identify a genuine bill. Let’s consider the new hundred-dollar bill. To the right of the portrait of Ben Franklin is a registered mold watermark. When the bill is viewed above eye level, an image of Franklin appears on the far-right side of the bill, front and back. It shows up right away. If you have to hunt for it, you don’t have it. A counterfeiter cannot reproduce this watermark, for it requires a $200 million paper mill. There are only six in the world, and only one capable of doing it in the United States.