Cybercriminals are now turning paper checks into Bitcoin

Just when you thought cybercriminals couldn’t get more creative… There’s a new trend – stealing paper checks from the US Postal Service and personal mailboxes and selling them for Bitcoin.

 

Cybercriminal activity is growing by the day, along with an interest in the hot topic. What grabbed our attention this time, however, is a mix of traditional and new age methods that has caught thousands in the US by surprise. And it's already spreading further – all starting from a mailbox.

Back to stealing basics

A new crime ecosystem, which began by ransacking the US Postal Service and personal mailboxes in search of filled-out paper checks, has developed in recent months, and is marking a steady growth. Criminals gather and sell the checks over the internet through common social media platforms or darknet communication channels.

The purchasers then use nail polish remover to delete the original payee name (to replace later with a new one) and increase the amount on the checks, depriving the victims’ bank account of thousands of dollars. Not only have many banks suffered already, by reimbursing the lost sums, but the identities of victims have also been at stake. For those affected, the consequences of these mail scams can be horrifying.

Stealing paper checks is far from a recent phenomenon. Check frauds are almost as old as the first modern checks – which have been around for over 300 years – but what makes the authorities' job tracking them down particularly difficult this time is the involvement of cryptocurrency money laundering. There's also an element of surprise, since no one expected the sudden resurgence of checks theft, as transactions have become mostly electronic nowadays.

Georgia State University’s findings

At the time of writing, a Cybersecurity Research Group from Georgia State University, led by David Maimon, Associate Professor of Criminal Justice and Criminology, continuously monitors 60 online chat rooms with suspicious fraudulent documents traffic. Some of those chat rooms exist on public channels such as messaging apps (WhatsApp, Telegram, ICQ), others are more private and require specific software, configuration, or an invitation to get assessed.

Although little historical data on this practice exists, a one-week pilot study we conducted in October 2020 places these numbers in some perspective.

Professor David Maimon

So far, Professor David Maimon has published findings from August to October 2021 showing a clear upward trend of the stolen checks’ sale. In August 2021, approximately 409 stolen checks were sold per week. In September the total reached 634, and, by October, that number increased to 1,325. Just a year earlier, that number was over 8 times smaller, 158 – as shown by a one-week pilot study the research group conducted in October 2020.

These figures likely only represent a small fraction of the number of checks actually being stolen and sold. We focused on only 60 markets, when in fact there are thousands currently active.

Professor David Maimon

The research group discovered that the total face value of the checks totaled at approximately $10.2 million in September and $11.6 million in October. However, the research group admits that these numbers likely represent only a small fraction of the actual amount of money pilfered – since criminals usually rewrite the checks for much higher amounts. According to the research, most victims of the theft live in Florida, Texas, and California.

Prevention is better than cure

As with most present-day scams – prevention is the best cure. So avoid sending paper checks via post whenever you can. Nowadays, your bank will allow you to transfer money electronically for most of your private and business payments, directly from your account, and often without a fee. Of course, electronic payments are not completely risk-free either, but they are a lot safer, all risk factors considered.

If you can’t avoid paying your bills with checks (some private businesses will only accept them), or if it’s a matter of preference, we suggest personally dropping off any envelopes containing checks to your local post office while following these tips from the US Postal Inspection Service.

Written by: Danka Delić

With her BA in English Language and Literature, Private Pilot Licence, and passion for researching and writing, Danka brings further diversity to the team. As a former world traveler, she learned to appreciate cyber security and the necessity for digital privacy. Danka is a nature, animal, and written-word lover. She enjoys staying on the go, both mentally and physically, and spends most of her free time either reading or hiking with her dog.

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