Michael Edwards's ring stole more than 2,600 checks from postal collection boxes from January 2022 to July 2024, with keys bought to open boxes in Manhattan. It rewrote the payees, paid the checks into recruits' accounts and aimed at over $55 million. Edwards got eight years on 7 October 2026 (US Attorney, Southern District of New York).
What is check fraud?
Check fraud is one of the types of fraud that hit banks. The OCC defines it: "Check fraud occurs when an unauthorized person uses someone else's checks, or images of a check, to make unauthorized purchases or withdrawals."
FinCEN's wording is wider, "any use of paper or digital checks to fraudulently obtain funds" (FinCEN, August 2024), so a kite on the fraudster's own accounts fits. In the UK the instrument is a cheque, "a bill of exchange drawn on a banker payable on demand" (Bills of Exchange Act 1882, s73).
Why is check fraud rising when fewer checks are written?
About 11 billion checks were written in 2021 (Federal Reserve, 9 December 2025). Despite the declining use of checks, FinCEN says, criminals have increasingly targeted the US Mail since the pandemic.
Check fraud reports to FinCEN passed 350,000 in 2021 and 680,000 in 2022 (FinCEN alert, 27 February 2023). In 2023 check fraud made up about 30 percent of fraud related suspicious activity reports (Federal Register, 20 June 2025).
UK cheque fraud losses went the other way, down 49 percent to £4.1 million in 2025, the "Lowest loss total ever reported" (UK Finance, p. 30).
How do US and UK law treat a forged or washed check?
In the US check fraud can be a federal crime, and state commercial law decides who carries the loss; England, Wales and Northern Ireland apply fraud and forgery Acts.
Table 1. Check fraud law by jurisdiction.
| Where | Law | Scope | Penalty or loss rule |
|---|---|---|---|
| Federal (US) | 18 U.S.C. 1344, bank fraud | Defrauding a financial institution, or getting money in its custody by false pretenses | Up to $1,000,000 in fines, 30 years, or both |
| Federal (US) | 18 U.S.C. 513 | Making, passing or holding a forged or counterfeit security (a check counts) issued by a state or an organization, to deceive | A fine, 10 years, or both |
| Federal (US) | 18 U.S.C. 1708 | Stealing mail, or buying or holding stolen mail | A fine, 5 years, or both |
| State (US) | UCC 4-401 and 3-406 | Only "properly payable" items may be charged; a customer's lack of ordinary care can bar the claim | The paying bank bears a forgery unless the customer's negligence substantially contributed |
| State (US) | UCC 4-406(f) and 3-417 | One year from the statement to report an unauthorized signature or alteration; whoever obtains payment warrants the check "has not been altered" | A late customer bears it; an alteration goes back to the presenting bank |
| Federal (US) | Regulation CC, 12 CFR 229.13 | New accounts; holds where the bank has "reasonable cause to believe" a check is uncollectible | In a new account, next day rules cover only the first $6,725 a day of certain checks; longer holds |
| Federal (US) | 12 CFR 229.34(f) | Remote deposit capture indemnity | The bank that took the image covers a paper bank's loss on a check already paid |
| England, Wales, Northern Ireland | Fraud Act 2006, section 2 | Dishonestly making a false representation to gain or to cause loss | On indictment, 10 years, a fine, or both (s1(3)(b)) |
| England, Wales, Northern Ireland | Forgery and Counterfeiting Act 1981, section 1 | Making a false instrument, such as a forged cheque | On indictment, 10 years (s6) |
| United Kingdom | Bills of Exchange Act 1882, s89A | Cheques presented as images | Typically, funds by 23.59 the next weekday (Pay.UK) |
| Scotland | Fraud Act 2006 sections 1 to 9 do not extend there (s15(2)) | Scottish law is outside this table | Not stated here |
A forged or altered check is not properly payable, so the paying bank starts with the loss. It can pass an alteration back to the presenting bank, and a negligent or late customer can end up carrying it. In a fake check scam the depositor pays, because "Banks do not assume the losses in this case" (USPIS).
> "When one check is deposited twice, as a phone image at one bank and on paper at another, Regulation CC makes the image bank cover the paper bank's loss unless the paper check bore a restrictive endorsement that did not fit a paper deposit (12 CFR 229.34(f)); the endorsement line decides who pays," says Ufuk Gürdaş, Compliance Specialist.
How is check fraud different from ACH fraud?
Check fraud works on a paper item or its image; ACH fraud works on electronic entries over the ACH network. Checks run on UCC Articles 3 and 4 and Regulation CC, while a consumer's ACH claim runs under Regulation E.
What are the common methods of check fraud?
The Federal Reserve's toolkit names five types of fraudulent check: altered, counterfeit, forged maker, forged endorsement and unauthorized items.
Table 2. Common methods of check fraud. FinCEN: approximate shares of 15,417 mail theft check fraud reports, 27 February to 31 August 2023 (over $688 million, actual and attempted). UK Finance: 2025 losses and cases.
| Method | What happens | FinCEN share | UK Finance, 2025 |
|---|---|---|---|
| Washing and other alteration | Payee or amount erased or written over | 44% (altered) | £1.9m, 292 cases |
| Counterfeit | A new check printed from real or invented account details | 26% | £0.5m, 139 cases |
| Forged maker signature | Real check stock, signature not the account holder's | 20% (fraudulently signed) | £1.7m, 364 cases (forgery) |
| Forged endorsement | The payee's signature on the back forged or missing | n/a | n/a |
| Kiting | Checks between banks inflate a balance before they bounce | n/a | n/a |
| Paper hanging | A check on an account the writer knows cannot pay it | n/a | n/a |
| Duplicate deposit | One check deposited twice, as a phone image and on paper | n/a | n/a |
| Fake check scam | Scammers get the victim to deposit a fake check and send money on | n/a | n/a |
Check washing techniques use chemicals to erase ink so the payee and amount can be rewritten (OCC). FinCEN found the payee line altered most often, then the amount. Kiting runs on the fraudster's own checks. Andrew Blassie, a bank's executive vice president, inflated his balance with checks on accounts at four other institutions that lacked the funds (US Attorney, Southern District of Illinois).
How does a stolen check become cash?
Edwards's ring covered theft, alteration and deposit in Table 3, and after his arrest offered about $32 million in stolen checks on Telegram.
In FinCEN's account, thieves open blue collection boxes with authentic or counterfeit Arrow Keys, wash or copy the checks, and deposit them in person, at ATMs or by remote deposit into accounts opened for the scheme or a money mule's existing account. The funds often leave fast, by ATM or wire, and personal details in the stolen mail can feed later credit card fraud.
Table 3. A stolen check, stage by stage.
| Stage | What criminals do | What the bank or victim sees | Who can stop it |
|---|---|---|---|
| Theft | Open collection boxes with Arrow Keys | A mailed check never arrives | The sender, posting inside the post office |
| Alteration | Wash the payee and amount, or print copies | Nothing yet | No one |
| Deposit | Branch, ATM or phone deposit into a new or mule account | Sudden check deposits | The bank of first deposit |
| Cash out | ATM withdrawals or wires soon after | Rapid withdrawal or transfer | The bank of first deposit |
| Payment | The altered check reaches the paying bank | A payee that does not match the issued file | The paying bank, with positive pay |
| Discovery | Move on to the next check | A check paid to an unknown account | The customer, within one year |
How can you identify a fake check?
Six places give a fake check away.
- MICR line. The magnetic ink line at the bottom holds the routing, account and check numbers; raised or glossy characters mark a counterfeit (Federal Reserve).
- Routing number. Its first two digits name one of twelve Federal Reserve Districts, and a forger may change them "to buy more time" (Georgia's banking regulator).
- Check number. It should match the MICR encoding (Georgia).
- Paper and edges. A personal check without a perforated edge is unusual (Georgia).
- Handwriting. Faded writing under darker writing means overwriting (FinCEN).
- Unknown bank. Confirm a foreign drawee bank with a SWIFT/BIC checker, then call it on a number found independently (Georgia).
What red flags do banks look for?
FinCEN says no single red flag decides. A bank weighs the customer's history and how many flags appear together, and monitoring transactions ties the deposit to the cash out.
Table 4. Bank red flags for check fraud.
| Indicator | Data | Control |
|---|---|---|
| New account used only for check deposits, then withdrawals (FinCEN) | Account age, deposits | New account hold (Regulation CC) |
| No check history, then sudden deposits moved out (FinCEN) | Deposit and transfer history | Velocity rule, review before release |
| Abnormal electronic deposits, then rapid transfers (FinCEN) | Mobile deposits, outbound payments | Reasonable cause hold, transfer score |
| Check stock unlike the issuing bank's (FinCEN) | Check image | Image comparison |
| Large, unusual check to a new payee (FinCEN) | Issued check file | Positive pay, payee match |
| The same image deposited twice (Federal Reserve) | Image archive, consortium data | Duplicate detection |
| Someone without an account cashing large checks with a doubtful story (FinCEN) | Teller notes | Escalate, file a SAR |
How do banks detect and prevent check forgery?
A business wrote a $14,750 check to a trusted vendor. Thieves stole it and changed the payee; payee validation at the paying bank flagged the mismatch with the issued check file, and analysts returned it (Federal Reserve).
Against duplicate presentment the Fed lists duplicate image detection at ATMs and in remote deposit capture (Federal Reserve). An insider can also beat the control. Blassie scrubbed his name from the bank's suspected kiting reports, so his case is employee fraud too.
How can you prevent check fraud?
To prevent check fraud, make checks hard to steal or wash and let the bank match them to what you issued (Federal Reserve guide for businesses, OCC).
- Positive pay. This check fraud protection matches checks presented against your issued file.
- Anti fraud checks. Microprinting and watermarks; stock locked and handled by few.
- Gel ink and security envelopes. Black gel ink is "highly resistant to check washing" (OCC).
- Dual control. A second person approves each check.
- Alerts and reconciliation. Alerts on every transaction, and daily reconciliation in online banking.
- Mail. Collect it promptly and post checks inside the post office.
- Shredding of voided checks.
Be wary of sending money to anyone after taking a check from them (OCC). If it happens, tell the bank and dispute the charges, then report mail theft to the Postal Inspection Service, internet crime to the FBI's IC3 and the fraud to the police.
What does each bank in a check's path do to stop check fraud?
The bank of first deposit owns KYC and AML monitoring on the accounts the checks land in; the paying bank runs positive pay. Either can file a suspicious activity report; for mail theft cases, FinCEN asks for FIN-2023-MAILTHEFT in field 2 and the narrative and box 34(d) checked.
complead, formerly Sanction Scanner, keeps one risk score per customer across onboarding, screening, monitoring and fraud. Its bank transaction fraud monitoring checks the receiving account for mule links and scores each transfer before it is executed; the fraud team holds, blocks or releases it. That solution sees the cash out, not the check image.
Every check Edwards's crew washed still needed a real account, lent by a recruit. When the account holder was invented, the case becomes synthetic identity fraud.
Related terms
- Wire fraud. Fraud by wire, radio or TV across state or national lines.
- ACH fraud. Fraud on electronic ACH debits and credits.
- Money mule. A person whose account passes criminal money on.
- Identity fraud. Using someone else's identity details.
