A press release from the U.S. Attorney’s Office:
Crystal Lake Man Indicted in Fraud Scheme
ROCKFORD — A Crystal Lake, Ill. man was indicted yesterday on federal charges of mail fraud. MICHAEL S. MACKAY, 46, was charged with two counts of mail fraud for his role in a “secret shopper scheme,” where victims applied to work-at-home advertisements on the Internet believing they were being hired to work as a “secret shopper” or payment processor.
According to the indictment, from September 2011 to at least May 16, 2012, Mackay was involved in a scheme to defraud victims into falsely believing that they were hired as “secret shoppers” to evaluate and report their experiences with local businesses.
After applying for work, victims received a letter with at least one counterfeit negotiable instrument, such as a counterfeit money order.
The victims were instructed to deposit the counterfeit negotiable instrument in their financial institution, retain a certain percentage as payment for their services, go to the nearest Western Union and wire transfer the remaining proceeds as instructed.
The victims were also instructed to report their experience, believing they were hired as secret shoppers to evaluate local businesses, via email to an email address contained in the letter.
The participants in the scheme received the proceeds via the wire transfers before the victims learned that the money orders were counterfeit.
During the course of the scheme, Mackay received at least $2,000,000 in counterfeit negotiable instruments in packages sent to Crystal Lake from New York, Nigeria, and Ghana.
Each package contained counterfeit money orders, in amounts ranging from $900 to $2,000 each, that appeared to be issued by
- the United States Postal Service
- American Express
- Capital One Bank
- Citizens National Bank of Texas
- First National Bank
- Navy Federal Credit Union.
Mackay received email instructions attaching a “secret shopper” letter and United States Postal Service Express mailing labels.
According to the indictment, Mackay then placed a “secret shopper” letter in a United States Postal Service express mailing envelope along with at least two counterfeit money orders to at least 665 victims throughout the United States.
The indictment alleges that Mackay mailed over $1,000,000 in counterfeit money orders to the victims, receiving wire transfers of at least $10,000 from his victims and others involved in the scheme as payment for his role in the scheme before the victims learned that the negotiable instruments were counterfeit.
Each count of mail fraud carries a maximum penalty of 20 years in prison, and a $250,000 maximum fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater, a period of supervised release of up to 3 years following imprisonment, and restitution. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution.
The indictment was announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Pete Zegarac, Inspector-in-Charge of the Chicago Division of the United States Postal Inspection Service; and Gary J. Hartwig, Special Agent-in-Charge of Homeland Security Investigations in Chicago.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of the defendant beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Michael D. Love.
See internet work at home advertisements.
Receive money order via the US mail.
Receive request for Western Union wire transfer.
The wire transfer request was the big red flag.
Because there are many types of wire transfer scams.
These scams originate on Craigslist, other internet sites, telephone solicitors, and US mail.
Seller wants you to prepay for item via wire transfer.
Seller wants you to prepay a “processing charge” before they send you a prize you have won.
There are combination check and wire fraud scams.
Or in the case above a combination money order and wire fraud scam.
The seller may issue you a fraudulent check.
The seller may “accidentally” overpay and want you to wire transfer the difference back to the seller.
There are check scams not involving wire fraud.
For instance once again the seller may issue you a fraudulent check.
Your bank may accept the fraudulent check.
As a courtesy, banks often provide an advance to customers of typically up to $100, before the check officially clears.
The further away the sellers bank the longer it takes for the clearing process to complete.
If the check doesn’t clear, the bank will rescind the advance.
So what’s the clearing process?
The clearing process is the check moves from your bank to clearinghouse to sellers bank, and then funds move back from the sellers bank to the clearinghouse to your bank.
The fraudulent check may go undetected until it reaches the sellers bank.
Except it’s not the sellers bank because it’s a fraudulent check.
The so called sellers bank notifies your bank the check is invalid, the check bounces, your advance is rescinded, and you are charged a fee.