Not Just a Paper Trail

Examining Financial Records in a Bank Fraud Case

By Rafael A. Garcia;Colin May;Mark F. Zimbelman
rafael-garcia-50x50.jpg   Starting Out

When I first started investigating bank fraud, I was taught two basic, yet vital lessons: thoroughly examine all your documents and follow the money. This foundation almost always will tell you how the fraud occurred and help you identify all parties that benefitted from the criminal activity. Experience, however, has taught me that documentation isn’t always in paper form, and, because each fraud is different, I better be prepared to think creatively. 

I’ve investigated fraud at financial institutions of various sizes. Every institution for which I’ve worked had numerous tools and techniques for detecting and preventing fraud. They all maintained various forms of records beyond the traditional paper statements and signature cards. But no computer program can help a fraud examiner interpret records; only experience can do that. That creative know-how became crucial during my investigation of a fraudulent yacht loan scheme I worked as a fraud investigator at a Miami bank.

It was a typical morning at my office: I had my café con leche (that’s Cuban coffee with milk) in hand and was reviewing a fraud detection report, which indicated someone tried to apply for a yacht loan using a stolen identity. The analyst who sent me the report said Ana, one of our loan officers, submitted an electronic application for Roger, a customer, for the purchase of a 33-foot, $300,000 “go-fast boat.” Go-fast boats are the infamous, cigarette-style boats popular in the 1980s for smuggling drugs into South Florida.

Our automated identity theft detection software spotted an anomaly and raised a red flag. The address and phone numbers for Roger on the application didn’t match anything found on official records. The analyst contacted Roger using information found on a credit report. Roger confirmed he had never applied for a loan with the bank and wasn’t in the market for a boat of any kind.

At this point, the analyst could have simply denied the application and succeeded in preventing any losses to the bank. But, fortunately, the analyst sensed something was further amiss. When the analyst called Ana to obtain details on the suspect who presented the application for a yacht loan, Ana said he was a short, skinny, tanned man.



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