Chicago business owner fighting for nearly $30K she lost to check washing scam: ‘It’s an injustice’

CHICAGO (WLS) — Local businesswoman Marianne Mandel said she recently lost almost $30,000 to an extreme check washing scam.

It is a crime that is on the rise, and now, she wants answers from the banking industry and the bank which cashed her altered checks.

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“It was awful. It was I was a basket case for several days,” Mandel said.

Mandel had a sinking feeling when she saw three checks cashed at the end of May and almost $30,000 drained from her account.

“And a small business, and that is payroll. That’s, you know, bills that rent, that is insurance expenses,” Mandel said.

The Eddison Park business owner sent the three checks for much lower amounts to vendors and brought them directly to her post office, but she says all three checks were stolen and altered: From $375 to $9,375, $25 to $9,825 and $300 to $9,300.

“So, they were blatantly whited out and overwritten for much larger amounts,” Mandel said.

The thieves were able to cash the washed checks after using mobile deposit feature through BMO. Mandel is wondering why the mobile deposit did not catch it.

“You would think that the guy, some sort of technology would catch it,” Mandel said.

Mandel immediately filed a mail theft report with the United States Postal Inspection Service and fraud affidavits with her bank, Huntington.

She says her bank has been working with BMO, but after months of waiting, she has not gotten her money back. In an email from BMO in September, a bank manager told her that the suspects’ accounts were cleared out, saying, “The accounts are already closed with no funds remaining to return.”

“I feel like, the BMO is the one who looks at these mobile deposits, that they should have some sort of technology in place that can read an altered check and/or a whiteout on a check, because it would blatantly wait it out,” Mandel said.

So, the I-Team reached out to BMO about the case. The bank did not respond to questions about mobile bank security, but said, “It is unfortunate for anyone to be a victim of a scam or fraud. We have resolved our role in the matter through our standard industry practice which involves working closely with other financial institutions to review claims and support the return of funds to customers. We thank them for their patience.”

Then, Mandel received an email from BMO, saying, “A check has been ordered to satisfy this claim.”

ABC7 also asked the American Bankers Association what is being done to enhance security on mobile deposits. The organization would not talk on camera but told the I-Team that banks spend billions of dollars every year on anti-fraud measures, “including a wide range of approaches to counter check fraud like deposit reviews, fraud detection tools, hold policies teller/branch controls and customer education.” The ABA said it is also working with banks to “implement innovative solutions that target the real problem.”

“We recently launched a national #PracticeSafeChecks campaign to raise awareness about check fraud and to provide tips and information to help consumers protect themselves. In addition, we have an ongoing collaboration with the United States Postal Inspection Service to help fight check fraud,” the ABA continued.

In November 2022, the I-Team told you about the increase in local mailbox thefts and postal carrier robberies.

USPIS reports continue to climb. The I-Team found that in 2023, there were 26 check washing cases nationwide, totaling $183,924. Data for this year shows that there have been 32 cases so far, totaling $620,838.

The Department of Treasury has more concerning numbers, saying there has been a 385% increase in check fraud since the COVID-19 pandemic. That agency says it has implemented AI to mitigate fraud of its checks.

“They basically whited out everything. I think the only thing that is us is the date on the check and my signature,” Mandel said.

Mandel said she wants to feel more at ease when she mails a check.

“I’m upset. I feel like it’s just, it’s an injustice,” Mandel said.

To avoid mail theft, you should sign up for USPS Informed Delivery to know when to expect important mail. Consider using electronic payments. Use pens with indelible black ink, which cannot be removed, and do not leave blank spaces in the payee or amount lines.

Also, remember to drop checks off directly at the post office. This is something Mandel did, but unfortunately, that did not help her.