Honolulu police Detective Daniel Goo said counterfeit payroll checks from various companies throughout the state have been cashed in a scheme that has netted about $100,000 so far. First Hawaiian Bank, Bank of Hawaii and Bank of America are among the financial institutions that have been hit by the counterfeiters, bank sources said, and they will absorb the losses.
Similar scams involving payroll checks have been reported in mainland cities over the past two years, from California to North Carolina.
Charles L. Owens, chief of the FBI's Criminal Investigative Division, told a congressional committee earlier this year that Vietnamese gangs originating in Orange County, Calif., are "the most notorious groups engaged in large-scale counterfeiting operations."
Owens said banks across the country lost $850 million from check fraud in 1993, with half of the total attributed to professional and organized groups.
Former Honolulu Police Chief Douglas Gibb, now vice president and security chief at First Hawaiian Bank, said the recent activity in Hawaii appears to be the work of one of the Vietnamese gangs.
Gibb said the scheme involves high-quality copies created by computers and scanners, which translate the original checks into electronic form. After scanning a company check, the counterfeiters can electronically alter the date, amount and the payee's name. The duplicates, which are then printed onto blank check paper, are extremely difficult to distinguish from the real thing, Gibb said.
Police and bank officials do not know how the original checks were obtained or whether the copies are being made in Hawaii or brought in from the mainland.
Both large and small companies have found themselves victims of the scheme. Three counterfeit payroll checks from Honolulu Restaurant Supply Co., a small Kakaako firm, were successfully cashed at different First Hawaiian Bank branches last week. The same man went to each bank and presented identification matching the Vietnamese name on the check, but finally fled to a waiting limousine after a teller took the identification and check for further inspection, Gibb said.
Aston Hotels and Resorts had 11 payroll checks cashed by the counterfeit ring, a company representative said yesterday.
Bank of Hawaii spokeswoman Piia Aarma declined to comment except to confirm the bank is working with the police. "I don't want to say anything that will compromise law enforcement efforts," Aarma said.
FBI and Secret Service officials met with police detectives yesterday about the situation. Mark Posey, assistant special agent in charge of the Secret Service office in Honolulu, said the two federal agencies share jurisdiction on bank fraud cases. But Posey said his agency is not actively involved in the case at this time.
FBI officials could not be reached for comment yesterday afternoon.
Gibb said financial institutions "will have to take a step back and examine payroll checks more carefully, even from major customers." He urged business customers to be patient with increased security measures.