Shedding Light on the Con
Fighting Fraud Makes for Crowd-Pleasing Conference

By Jay Dismukes

As a teenager posing as assorted white-collar professionals, Frank W. Abagnale, the subject of Steven Spielbergh’s 2002 blockbuster Catch Me If You Can, cashed $2.5 million in fraudulent checks over a five-year period in the 1960s. Today, the reformed con artist and longtime FBI Academy lecturer says check fraud is a thousand times easier to perpetrate.

An international authority on forgery, embezzlement and secure documents, Abagnale served as the keynote speaker for the June 20 Foundation for Accounting Education Anti-Fraud Conference. Abagnale’s appearance—as well as several other high-profile speakers, such as Edward M. Stroz, whose firm played a critical role in the forensic investigation of Enron’s computer files—helped draw more than 300 people to the event, building on the success of previous conferences and nearly doubling last year’s attendance.

“Technology breeds crime, always did and always will,” said Abagnale, whose speech touched on many of the issues he raises in his book The Art of the Steal. “Today, crime is faster, easier to commit and harder to detect.”

In that light, Abagnale said, computers function as a powerful tool that can be used to either help prevent white-collar crime or to spread it, depending on the character and ethical background of the user.

To mitigate corporate fraud, Abagnale said, companies should have a code of ethics that is regularly impressed upon, read and signed each year by every employee. In his experience, he said, there have been fewer instances of fraud or defalcation in companies that have employed and taken seriously a code of ethics compared to those that don’t.

During his speech, Abagnale covered an array of white-collar crimes, including the steps criminals take to perpetrate different acts. For example, to make fake personal checks, a forger only needs to go to a bank and look over a person’s shoulder, thereby stealing the victim’s name, address, bank account number and check number. He then must find the same grade of paper on which the check is issued, but, as Abagnale pointed out, this is not terribly difficult to do. The vast majority of banks, about 80 percent, hire external companies to create their checks, and these companies use paper widely available in most office supply stores.

After purchasing the correct paper and placing the bank logo (downloadable from the American Bankers Association) onto it, the forger then just needs to number the bogus checks several digits beyond what the victim was using. Of course, this scam is made easier by the fact that more than half of the population don’t balance their check book and there is only a 2 percent imprisonment rate for check forgery in the U.S., he said.

Creating false records isn’t any more difficult to carry out, according to Abagnale, and can be just as profitable, given that credit bureaus don’t check death records. Knowing this, a con man goes to the Bureau of Records and Statistics to obtain a copy of a birth certificate of a deceased infant that died the same year the con man was born. The copy of the birth certificate is then taken to the Department of Motor Vehicles to get a new driver’s license. Abagnale added that, for a fee, certain Web sites can also provide detailed information on individuals, including date of birth, Social Security number and date of death.

Fortunately, Abagnale said, there are equally simple measures that can help prevent fraud. One of these, and a cheap one at that, is to use a Uni-ball 207 Gel Pen when signing corporate checks. The ink in the pen becomes part of the paper and cannot be removed when dipped in acetone—the chemical criminals commonly use to wipe out the information written on a check.

The NYSSCPA’s Litigation Services Committee, chaired by S. David Belsky, of S.D. Belsky & Associates CPAs, sponsored this year’s conference. Debra A. Cutler, of Kramer, Love & Cutler, LLP, and Timothy P. Hedley, of KPMG Forensic, served as the conference cochairs.

Suvro C.K. Banerjee, NYSSCPA quality assurance manager, ethics, contributed to this article.