The Holiday Island City Council has given the green light for the city to start making some of its financial transactions electronically instead of by check after being the victim of a counterfeit transaction for the second time.
The council’s approval at its regular meeting on Tuesday, Oct. 24 will allow city recorder/ treasurer Wes Stille to set up electronic payments for services such as utilities and other service providers and avoid instances such as what happened in September, when a check for $1,494.25 sent to Pinnacle I.T. in Little Rock, a computer security provider, was stolen from a post office in North Little Rock.
The information from the city’s check was then used to create a counterfeit check, with someone adding $20,000 to make it $21,494.25 and cashing it at a bank in Mississippi.
The same thing happened at the North Little Rock post office last year involving a counterfeit check for “around $3,800,” Stille said.
“When the postal inspector called me last year and talked about it, he explained that what is happening down there is mail is being stolen from the post office,” Stille said. “Then they take the checks and prepare a new check somehow and transpose our signature onto the check and make them out to someone else. And in this recent case they added $20,000.
“What I was told last year is they steal these checks and put them online and auction them off and people can take them and alter them and make counterfeit checks and put our signatures and our account information on them. Apparently it is happening very commonly down there. It’s not the first or second time it’s happened to our service provider.”
Stille said the counterfeit check was discovered when it was debited from the city’s CS Bank account, which according to financial documents provided to the council, happened on Sept. 8.
“We reported it to our bank,” Stille said. “They filed a police report and opened a new account for us with a new account number so they couldn’t do it again.”
The city was refunded the money “a couple of days” after it was reported, Stille said.
“You would think a check in that amount, for someone to cash it or even deposit it, they would have to have an account at that bank,” Stille said. “You would think the bank would have some information about the individual that had the account, but I don’t know. It all looked very legitimate so I can see in the banking system, where everything is done electronically anymore, that they’d send it through and it would go through.”
The counterfeit check did have some discrepancies to the city’s check, though, Stille said.
“In comparing the checks, taking a close look at the check they cleared and comparing it to our checks you can see that the border is different and the person at our bank said it was a different font, too,” he said.
When the same issue happened in 2022 the original amount and check number wasn’t changed before it was cashed at a bank in New York, Stille said.
“They just cashed it for the same amount for what we had written the original check for,” he said. “Apparently they might have figured if was for the same amount we might not catch it in doing our reconciliation … this time they used a new check number.”
Stille said someone involved in the operation was caught during last year’s incident but he hasn’t heard from the postal inspector about the recent counterfeit.
“Last year I was contacted but that has not happened this year,” he said. “I don’t know if some bank in Mississippi, or even the one in New York, had to take the loss for the amount for accepting the check.”
While the issue was resolved on the city’s end and a new bank account is now being used, Stille said now taking care of some of the city’s bills electronically will cause a little ease of mind.
“I was reluctant to send any more checks down there,” he said. “It’s a common problem nationwide. I’ve read a couple of articles in the last couple of months about the problems the postal service is having with this. We’re talking hundreds of thousands of cases.
“This will probably make it easier to do it electronically than to write a check and put it in the mail. … This will be more timely. … I keep telling people to be careful about sending checks in the mail anymore. You’d think that would be safe, but it’s not.”
