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Anatomy Of A Fraud

Most fraud victims clam up. In this check-tampering case, the victim-a small-business owner-decided to speak out. The resulting cautionary tale offers a rare, detailed look into the mechanics and psychology of fraud. And its aftermath.

By Scott Berinato

As a private investigator confronting a suspect, Hodgson has an advantage over the police. "I don't have to advise him of his rights. I tell him up front that I represent the company and we want to know how much damage there is."

Hodgson drew up a confession, read it to Jackson and then said to him, "I want you to read it, change it if you have changes and initial them and then sign it."

Jackson said, "OK."

The primary question for rosen was how 900-series checks had cleared in her company's name when her own statements showed no record of 900-series checks at all. Eventually Hodgson and Rosen cracked the scheme. Jackson had allegedly intercepted Rosen Group bank statements and used liquid paper to delete the records of the 900-series checks. He then made copies of the statements. The bastardized copies were passed off as originals and the stolen checks were then ghosts.

Hodgson and other fraud experts appreciate the cunning, albeit typical, details of this scheme: The stolen checks came from the middle of a block of check stock to buy time before anyone realized they were missing. A single missing series also might look like a printer's error to the unsuspicious. When processed, 900-series checks wouldn't be so far out of sequence that they'd immediately raise red flags. Also, the higher number series ensured that illegitimate transactions would appear together at the bottom of a bank statement, making it easy to delete them without affecting the legitimate transactions on the statement.

Jackson signed hodgson's confession. It sounds astonishing and unlikely, but this is actually a common and effective tactic for PIs, especially when the perp is presented with evidence against himself. Hodgson plays a good cop to the specter of an unknown bad cop. It might seem bad to cooperate with me, he's suggesting without saying it, but I can't know how bad it might be if you don't.

Hodgson stayed in contact with Jackson, primarily because he hoped Jackson would disclose the whereabouts of the Lexus. That never happened. However, Hodgson says, "He put me in touch with a couple of attorneys who had walked away when he didn't pay them. He tried to use a Rosen Group check to pay one attorney."

In the end, jackson would be accused of taking $127,383.75 from The Rosen Group. He was indicted on charges of continuing theft against The Rosen Group on Aug. 11, 2003. He was arrested on Aug. 27. It turns out that it wasn't the first time.

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