WINNIPEG – The trend from cash to e-money has created new temptations for people who might otherwise have had no criminal intent, or at least no convenient means of executing a crime.
These are not the kind of robberies that take place in dark alleys at gunpoint. They take place in people’s home and on the electronic networks we use to manage our money and business affairs.
Because the victim often feels embarrassed, threatened or doesn’t even realize a crime has happened, many in-house thefts are never reported.
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It’s one thing to lose every penny in a specific bank account. But victims can actually lose more money than their accounts contain.
This is the situation Tom (fictitious name) found himself in. Tom was born and raised on a prairie farm, married, moved to the city, raised four kids and had a successful career in an agriculture related business. He’s now retired.
But one problem has followed Tom for years. His youngest son Brian, age 30, has never learned responsibility.
Tom and his family tried everything to help Brian straighten out his troubled life. They ran the full gamut of therapy, addiction clinics, support groups, spiritual and medical treatments. But alcohol and drugs have a devastating grip on Brian.
A few years ago, Brian moved out, contacting home only when desperate for money, usually about once a month. Tom would either mail or wire the money.
With the advent of electronic banking, Tom thought he saw a more efficient way to transfer money to the wayward son. So, in 2002, Tom talked to his local bank branch manager and explained he would like to set up a separate account specifically to deal with transferring funds.
“The purpose of this account was to have two debit cards for transferring money on short notice to my son. The bank assured me there was no way he could ever take out more money than I put in,” said Tom.
“That soon proved to be wrong, because they didn’t tell me they had included an optional $100 overdraft. Once my son figured this out, the imaginary $100 was turned into cash and disappeared.
“I stopped the overdraft feature in the summer of 2002. Again, I was told there was no way he could withdraw a cent more than I put in.”
All went well until spring of 2003 when Brian moved to Calgary for a construction job. This paid well, but he soon got involved with a rough crowd.
“This next crisis cost me $1,350,” Tom said. “He used the debit card to deposit an empty envelope. Over the next few days, he withdrew money claimed to be in the empty envelope.
“Once he got to the limit, my branch informed me that the account was overdrawn $1,350 and I had to make it up immediately. What choice did I have? The branch manager said it was my fault because I had authorized a maximum daily withdraw of $500.
“Most people don’t comprehend that this feature is, in fact, a pre-authorized loan. Without knowing it, I had signed for a daily loan of $500. As a result, the bank said there was no need for them to wait for the bogus deposit envelope to be opened because I had already signed my name. I had agreed in advance to cover any future losses up to $500 per day.”
According to bank statements in Tom’s possession, the empty envelope trick happened again for $1,200 and $961, plus some smaller amounts.
In frustration, he finally e-mailed the bank’s head office suggesting that the system of allowing cash withdrawals from automated banking machines based on empty envelope deposits was not a sound, logical way of conducting business. It opens up too many avenues for fraudulent banking.
Within days, the bank e-mailed its response: “Each and every client is accorded their own ‘access to deposited funds limits’ based on the client profile, credit bureau, etc. The access your son had available to him was based solely on your profile and credit background.”
The e-mail stated that while the bank’s computer system suspected a fraudulent deposit, it would not intervene.
Tom asked why their fraud detection system didn’t immediately freeze the card instead of putting it on a warning list.
Again the bank said “limits set on the card were based on your profile and not that of your son. In conclusion, you are fully responsible for all activity on this account and (you) failed to take the necessary precautions in safeguarding your card. …. (we, the bank) … are not in a position to consider your request for compensation.”
Tom reluctantly admitted he had no recourse.
“Once you hand that plastic card and PIN to another person, you are at risk. The bank has your signature, which allows them to treat these thefts as a loan. And they will collect the money from you – there’s no doubt about that.”
Sally (fictitious name) determined that her only grandchild, Ann, was stealing cash from her when she came to visit.
Ann, a trained professional with high earning potential, had developed a chemical dependence that cost her her career.
She often came to live for months at a time with Sally in her highrise senior complex. It was during these stays that Ann secretly gathered detailed information on Sally’s accounts.
At night, when she thought her grand-mother was asleep, Ann also cleaned out the cash from Sally’s purse and secret hiding spots in the apartment.
By early 2003, Sally had gathered enough evidence and she went to the police. Unfortunately, cancer caught up with Sally before the police caught up with Ann. To further complicate matters, the only will of Sally’s that could be found left her entire life savings and possessions to Ann.
By early 2004, Ann had converted everything she could to cash and moved to Central America. For all intents and purposes, it’s case closed.
These stories came no surprise to me. I’ve already been through it.
When my parents died 15 years ago, I was appointed executor of the estate. I lived in Ontario at the time. They had lived in Fargo, North Dakota, where the estate, bank, family accountant and family lawyer all lived.
Over the next 18 months, there were to be numerous cheques written on the estate account for typical expenses such as real estate taxes, house insurance, heating and maintenance on the empty house and the final funeral and medical bills.
To simplify the payment process, I left a number of signed cheques with a family member who lived near Fargo. This person could use the cheques to pay bills, saving me the trouble of conducting business long distance over the border.
Once the family house sold and the money was deposited in the estate account, I again travelled to Fargo to wrap up the remaining details.
That’s when I discovered that as soon as the house sale money went into the estate account, the family member used one of the signed cheques to withdraw $28,000 and deposit it in their own pocket.
The next day, the bank manager and family accountant went into their respective files to look at cash withdrawals over the previous year and a half. They concluded that the actual theft was much higher than $28,000.
The bank manager and family accountant each had their own sets of corresponding records documenting the 18 months of thievery. But, because I had signed the cheques, they assumed the withdrawals had been legitimate.
The teller said that she alerted the branch manager at the time of the final $28,000 cash transaction. But there was nothing they could do to stop the withdrawal. The cheque carried my signature, and it matched the signature sample in their files. According to their terms of reference, they were required to honour the cheques. It was my problem and I would have to deal with it.
The bank manager, family accountant and family lawyer all suggested I go to the county sheriff to file criminal charges. Technically, it was out of their hands.
Going to the sheriff’s office to file charges against a family member is a difficult thing, especially when jail time is possible. So, years went by as I waited for some sort of repayment.
After 10 years, I finally lost patience and contacted lawyers in Minnesota and North Dakota regarding criminal action.
Their opinion? I waited too long. I had gone past the statute of limitations in both states. Even with the distinct signature of the trusted family member on cash withdrawal slips, there was nothing I could do a decade after the theft.
There is one common thread that weaves its way through dozens of these kinds of stories:”I never saw it coming. I had no idea. I just can’t believe this is happening to me.”
Cpl. Phil Carver, with the RCMP commercial crime unit in Winnipeg, works full time investigating these types of cases.
“A large percentage of these crimes are directed at seniors because they’re more trusting and they often have that nest egg which people with criminal intent are eager to attack,” said Carver. “But it’s not all senior citizens by any means. I’m right now working with fraud victims in their 40s who have lost large sums of money. It can happen to anyone.”
