|Subject:||URGENT-Memorandum Advising of Fradulent Activity|
|Date of Memorandum:||04/14/2000|
|Expiration Date:|| |
|Signed By:||Smith, Roland|
|FCA Contact Person:||Paulsen, Roger|
|List of Attachments:||none|
April 14, 2000
To: The Chief Executive Officer
All Farm Credit System Institutions
From: Roland E. Smith, Director /s/
Office of Examination
Subject: URGENT--Memorandum Advising of Fraudulent Activity
The Farm Credit Administration (FCA) was notified yesterday that parties unknown had recently obtained and used counterfeit checks in an unsuccessful attempt to draw upon a checking account of a Farm Credit System (System) institution. The checks were made out and delivered to multiple computer suppliers for payment of computer equipment orders totaling nearly $1 million. The orders designated that the equipment was to be exported to a foreign country. The situation was discovered when one computer supplier called for verification of funds, thus alerting the institution. The checks used were close replicas of the institution’s checks and contained the forged signature of an employee of the institution. The appropriate authorities were notified of this fraudulent activity.
This institution was targeted for a much smaller amount last fall under similar circumstances. While that check was honored by the institution’s bank, the check used at that time did not remotely resemble the institution’s checks. The institution ultimately recovered the amount in question from the bank. It is possible that the parties involved had used the check in the smaller amount to test the controls over the account to determine whether it was possible to defraud the institution for a larger amount.
We encourage you to contact your depository institution(s) to verify recent activity on your accounts and notify them of this situation. In light of the above circumstances, you may want to review your records for at least the last 6 months. While this may have been an isolated attempt, we are uncertain whether this is part of wider efforts to defraud other System institutions.
If you find any irregularities during your review, please make the appropriate notifications and referrals required by FCA Regulation 12 CFR 617.2, and notify the Director of your respective Office of Examination Field Office immediately. If you have any questions regarding this memorandum, please call Roger Paulsen, Special Examination and Supervision Division, Office of Examination, at (703) 883-4265, or correspond on the Internet at e-mail address firstname.lastname@example.org.