has as its routing number, "000000518." Forgers who forge government checks remove the first three zeroes and encode the check with the code of a bank in another state. That way the computer treats the check as an ordinary business check, and routes it to a destination other than the U.S. Treasury.
IN ADDITION, BE SUSPICIOUS IF . . .
Most forged checks don't have perforated edges. Real checks do. The only exception to this rule are United States Government Treasury checks. Forgers could create checks with perforated edges, but few bother as it's expensive. When forgers buy check paper, they usually buy standard 81⁄2 x 11 sheets. They print out three checks on a sheet of paper and then cut them apart. When you're handed one of their checks, there is no perforated edge anywhere on the check. It's smooth on all four sides. That's usually a dead giveaway that it's a forgery.
Most forgers don't use magnetic ink to do the routing numbers. It's not because they aren't able to. Anyone can go into an office supplies or computer store, and buy a magnetic ink cartridge for their printer. Forgers don't do it because of the float. Meaning, if I put magnetic ink on the check and cashed it at a grocery store, the bank computers would read it overnight and reject it. But if I use regular blank ink, the computer in the clearing house can't read it. The next day, the check will have a Lundy strip put over the routing number. They'll reencode it with magnetic ink, but they'll still use the routing number that I put on the check. It'll still go to Hawaii, but now I've bought two more days. If you're passing six- hundred-dollar checks and you're doing ten a day, that's twelve thousand dollars more profit.
DON'T KEEP IT SIMPLE, STUPID
One of the main reasons forgers are so successful today is because we give away so much information. Businesses commonly establish an M.D.A., or maximum dollar allowed amount, for their checks. That puts a cap on the amount a check can be written for. A company, for instance, might set up its checking account with instructions that checks are not to exceed $1,500. The bank will lock that into their software, and if a check comes in for $1,500.01, it will reject it. It's a great feature, except many companies print those instructions right on every check: "Not valid over $1,500." That tells every forger, if you're going to forge this check, you better stay under $1,500. Why are you telling the forger how to defraud you?
Or a forger will pick up a check that says right on the face, "Two signatures required on checks over ten thousand dollars." He'll simply make sure he puts a second forged signature on the check.
Here's another way that companies unwittingly assist criminals in robbing them. If you look at the annual report of any Fortune 500 company, on page two or three is the signature of the chairman of the board, the chief financial officer, the treasurer, the controller, all in camera-ready art. That's where most forgers get their signatures for fraudulent checks, straight out of annual reports. A forger digitizes that signature, puts it on a check or letter of credit, and he's in business. Your business.
When you prepare an annual report, put in a picture of the officer, put in the name of the officer, and put in the title of the officer. But don't put in the signature. If you feel some obligation to show a signature, have an artist do a rendition of it rather than the true signature. If you do include the real signature, that signature is going to show up on a check that you won't be happy paying.
Except on large checks, what's remarkable is a forger doesn't even need a signature anymore. On most checks, banks don't bother looking at signatures, because everything is automated. Banks process 69 billion checks a year, and nobody really sees most of those checks. Banks practice "selective check inspection," whereby they set a limit below which they will clear checks without examining their signatures. It's rare nowadays for a major bank to look at any check for less than twenty-five thousand dollars. These checks whisk through a high-speed bank check sorter at a rate of two thousand items per minute, or forty checks a second. When the checks go down the sorter rails, they're traveling at a speed in excess of four hundred miles