Victims stuck with $80,000 scam loss
By Peter Boylan
Advertiser Staff Writer
By Peter Boylan
Two Windward O'ahu residents who thought they had been hired by legitimate foreign companies to distribute checks were in fact victims of a scheme that's left them on the hook for $80,000.
One victim is a Kane'ohe businessman who negotiated a contract with a Japanese company. The other is the wife of a Kane'ohe Bay Marine who filled out an online application in August with a Chinese corporation claiming to be a subsidiary of oil giant Sunoco Inc.
Both believed they would be acting as "check distributors" for companies.
After being "hired," the local residents agreed to receive checks from these companies and keep a percentage while wiring large sums to accounts in China and Japan, police said. Unwittingly, both the man and woman were about to cash fraudulent checks and wire the money back to the perpetrators.
The checks from the "foreign companies" initially cleared the local banks, and the residents were each able to wire $40,000 to accounts in Japan and China as instructed by their employers, police said.
But federal regulators discovered that the checks deposited by the residents were counterfeit, and the banks are holding the residents responsible for the funds. There is little law enforcement can do to hold anyone overseas responsible for counterfeiting the checks and perpetrating the fraud.
The two Windward residents fell victim to a new twist on an old scheme: the "Nigerian letter fraud."
The scheme involves people who often claim to be with a foreign government or foreign company who send letters or e-mails, saying they are willing to share large sums of money in return for bank account information or a person cashing what turn out to be fraudulent checks and wiring the money to other accounts.
What most fraud victims don't realize is that they become responsible for the money they deposit into their account once they cash the check. The burden of proving the check's legitimacy falls on the customer, not the bank, according to police and prosecutors.
"These cases are very difficult to investigate and prosecute," said city deputy prosecutor Chris Van Marter. "Advance fee scams like this pose difficult problems for law enforcement. It requires the cooperation not only from law enforcement officials in Hawai'i but in the foreign country. In my experience, we hear about these schemes in the prosecutor's office every week. It's not an easy task to obtain financial documents from foreign financial institutions, and trying to identify the suspect associated with the account is much more difficult."
If caught and extradited — a task made more complicated by the nebulous web of international extradition treaties between governments — advance fee scam perpetrators face numerous charges, including first-degree fraud, second-degree forgery, and identity theft.
Police investigate each formal complaint made, Van Marter said, but local law enforcement has neither jurisdiction nor resources in foreign countries where the perpetrators are usually living.
Makoto Hinai, senior consul at the Consulate-General of Japan in Honolulu, said he has never heard of a group of Japanese criminals targeting Hawai'i residents during his 3 1/2 years in Honolulu. The Japanese consul in Honolulu coordinates with local law enforcement when contacted about possible frauds and other crimes committed by or against Japanese citizens.
Hinai, however, acknowledged that communication between Japanese law enforcement and local police can be complicated.
"When it involves criminal investigations, we will do what we can do here to help them," he said yesterday. "We are always willing to help, but government-to-government contacts (at the law enforcement level) all must be handled by our embassy in Washington, D.C."
Reach Peter Boylan at email@example.com.