Forgery & Altered Documents? Part I

By Dana Turner

Note from Editor: We've done training pages on Forgeries before, but Dana Turner has just rewritten a whole program on details not previously covered. We felt it was worth an in-depth review.

Negotiable and non-negotiable documents and devices are frequently stolen, counterfeited, altered or forged. The documents most commonly forged today include:

• Driver's licenses and identification cards issued by the state;
• Commercial and personal checks issued for cash - or for purchases or payments;
• Local, county, state and federal government warrants that are mis-routed and stolen;
• Credit card drafts issued for cash or the purchase of goods and services;
• Money orders purchased for $1 and "raised" to a higher dollar amount;
• Travelers checks;
• Signature cards that are forged when the account is opened; removed from the institution's premises by the offender; or altered by an employee;
• Documents containing falsified or stolen Notary seals and stamps or other official markings (e.g., COUNTY CLERK, ORIGINAL, FILED, CONFORMING COPY);
• Loan and other credit applications and supporting documentation;
• Wire Transfer instructions

Employees should be familiar with methods that offenders use to forge, alter and counterfeit documents - because each method leaves a telltale clue.

Most forgeries are created by one of four (4) methods:

• Tracing;
• Simulation;
• Facsimile; and
• Blind.

Tracing
The offender obtains a genuine signature and places the document to be forged over the genuine signature. Both documents are then placed over a light source, so that the genuine signature is shadowed beneath the document to be forged. The genuine signature is then traced in pencil and over-written with a pen. This technique leaves pencil residue evidence, especially from erasures.

Simulation
The offender obtains a genuine signature and places it next to the document to be forged. The offender then looks back and forth between the genuine signature and the forgery he/she is creating, imitating the writing. This technique either leaves ink spots or pressure marks if the writer is too careful - or an inaccurate formation of characters if the writer is not reasonably careful.

Facsimile
A person or business may use either computer-generated (scanned) or "rubber stamp" facsimile signatures to process a large volume of documents. These devices may be stolen, duplicated or misused by either internal or external offenders. There is no technique for determining if a facsimile signature is genuine or forged - but there is one technique that will reduce the likelihood of this type of forgery. Black ink is clearly reproduced by a photocopier, and the resulting copy may appear to be an original. Inked stamps are used by governmental agencies such as the County Clerk's Office; by businesses by an authorized signer on checks, credit applications and loan documents; and by financial institutions on many negotiable documents.

Accept only documents containing original inked-stamped information with any color ink except black. Because these stamps use a "bleeder" ink process, the colored ink will still create a clearly defined image for microfiche or photocopy. A document containing what appears to be a black-inked stamp should be referred to a supervisor for evaluation.

Blind
No genuine signature is available, and the offender makes one up - most obvious method.

Signature Verification Process
Most forgeries can't withstand a careful examination - and forgers hope that their "work" is good enough to pass a casual inspection. The most appropriate signature verification process is conducted in three parts, and the goal is to determine if the signatures are "reasonably similar".

If a signature is suspicious or doesn't even pass a casual inspection, consider investigating further. You'll need two tools to perform a more detailed inspection: a halogen-type flashlight; and a magnifying glass.

First, use the flashlight to shine up from underneath the document - obvious tracing or alterations will be readily visible. Second, use the magnifying glass and the flashlight to look for other telltale clues on both the face and the reverse of the document.

Next, using a genuine signature item, place the document to be compared directly below the genuine signature item. Then compare the signatures - first upside down, then sideways, and finally, right side up. Compare and look for differences - not similarities - in the:

• Slant and direction of characters;
• Relative size of the characters;
• Shape and formation of characters;
• Connections and spacing between characters; and
• Misspelled words.

Red Flags
Many forged documents contain clues that should alert an employee to pay particular attention to both the person and the document involved with the transaction. Look for:

• Smeared, smudged or watermarked writing;
• Amounts exceeding any restrictions printed on the document's face;
• Unclear, illegible writing;
• Writing in a foreign language;
• Misspelled words;
• Uneven spacing in the writing;
• Facsimile signature or endorsement;
• Writing in more than one writing >Payroll checks whose company name is written in, stamped or typed, or payroll checks in even dollar amounts;
• Negotiable documents that are addressed "C/O" the person presenting the document (e.g., Payee: Thelma Henry C/O David Thomas);
• Any document that requires a power of attorney or other legal document to negotiate; and
• Negotiable documents payable to a business account, when the person presenting it wants cash. This document should only be deposited into the business account, and then a check written for cash.
• Large dollar checks drawn out of state being deposited into an elderly person's account

(to be continued?)

Copyright © 2006 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 16, No. 6, 7/06