CAD Files

Cheque fraud checked

Reports by
Wong Wei Kong (Business Times 1 Mar 2004)

CHEQUE FRAUD

An alert from DBS Bank led the Commercial Affairs Department (CAD) to smash a cheque fraud syndicate. A group of Bangladeshis was stealing cheques from letterboxes in industrial buildings, altering the particulars and presenting them for payment. The syndicate used the POSB accounts of fellow Bangladeshis who had left Singapore, making it difficult for investigators to trace the fraud. The syndicate also deposited the forged cheques in quick cheque deposit boxes to avoid detection.

Last year the CAD smashed a syndicate that was stealing mail from letterboxes, altering the particulars, and then presenting them for payment.

CHEQUES in the mail are so common these days that no one would stop to think twice about it. But, as some companies found out the hard way, the seemingly innocuous cheque lying in the letterbox could be a target for criminals.

On Feb 18, 2003, the Commercial Affairs Department (CAD) was alerted by DBS Bank to a possible case of cheque fraud. The subsequent investigation led CAD to smash a cheque fraud syndicate at work. A group of Bangladeshis was stealing mail from the letterboxes of tenants at industrial buildings, altering the particulars of the beneficiaries in the cheques found, and presenting them for payment. The syndicate used the POSB accounts of fellow Bangladeshis who had left Singapore, which made it difficult for investigators to trace the fraud. To avoid detection, the syndicate also deposited the forged cheques in quick cheque deposit boxes at various POSB branches.

Obstacle to Investigators

The case highlights the importance of vigilance when banks handle cheques. The case came to light because staff from POSBank Hougang Central Branch noticed that the original beneficiary's particulars on a cheque had been tampered with. DBS' fraud control unit was informed, and fearing that more tampered cheques could have been deposited, it alerted all POSB branches of the incident. True enough, many altered cheques were found to have been deposited into the POSB accounts of five Bangladeshis.

For the CAD investigating team led by Mohd Azrin Rahmad, the first obstacle they encountered was the fact that of the five POSB accounts identified, four of the account holders had already left Singapore. The remaining account holder, Shahiduzzaman, was working as a foreman in a construction company in Singapore. In late February, investigators traced Shahiduzzaman to his employer. But the employer informed them that Shahiduzzaman had completed his contract and was preparing to return to Bangladesh. The officers moved swiftly to track him down before he left the country, and he was brought in for questioning at CAD.

As Shahiduzzaman talked under questioning, the pieces of the jigsaw started coming together. The investigating team established that on Feb 11, 2003, one of the syndicate members, later identified as Sahidulla, had approached Shahiduzzaman and told him that another man, later identified as Mokhles and the syndicate leader, wanted to 'borrow' his POSB ATM card, PIN number and bank book.

Shahiduzzaman was told that the ATM card and bank book would be returned after a few days. When he asked for the reason behind the request, Sahidulla cursorily told him that it was to carry out some personal transactions. Shahiduzzaman eventually agreed because he owed Sahidulla money, which Sahidulla said would be settled by the loan of his bank documents. The next day, Shahiduzzaman handed over his ATM card and bank book.

A week later, however, the ATM card and bank book were not returned as promised, and Shahiduzzaman tried unsuccessfully to contact Sahidulla. On Feb 24, 2003, he finally managed to meet up with Sahidulla at a coffeeshop near Aljunied MRT station. By then, Shahiduzzaman was growing suspicious. Sahidulla persuaded Shahiduzzaman to let him retain the ATM card and bank book, and the following day, brought him to the syndicate's hideout at Blk 336, Hougang Avenue 7, to assure him that they were not engaged in any unlawful activity. There, Shahiduzzaman was introduced to Mokhles, not knowing that he was the syndicate leader. It was only when he was later questioned by the CAD that Shahiduzzaman realised that Sahidulla and Mokhles were breaking the law.

Financial Distress

Acting on the information from Shahiduzzaman, the CAD team set up an ambush at Blk 336 in the early hours of the morning. Their patience paid off, when Mokhles was spotted walking towards the block. He was immediately detained and he led the investigation team to his hideout where Sahidulla was arrested. Investigators later recovered a briefcase from a cupboard which contained paraphernalia used in cheque forgery, including a simple penknife used to scrape off the names of the original beneficiaries and items like ball-pens and ATM cards.

Mokhles revealed more under questioning. He said that he was in financial distress, and claimed that sometime in August 2002, he met a man named Khokhon who told him that all he needed to do was to steal cheques from letterboxes at industrial estates, alter the details of the beneficiaries and present the cheques for payment using the accounts of other people.

His accomplice, Sahidulla, also needed money at that time and together, they went around industrial estates in Kallang, Ubi Avenue and Eunos to steal cheques from letterboxes. They found it easy to fish for mail in the letterboxes because the boxes were either filled to the brim or the openings were wide enough even for them to insert their hands. They were careful not to force open the boxes, which is the reason why the letterbox owners did not suspect anything amiss until much later.

Lessons in Forgery

After stealing the first cheque, Mokhles said that he and Sahidulla met up with Khokhon who taught them how to alter the beneficiary's details on the cheque. Mokhles then forged the cheque.

Prior to the theft, Mokhles and Sahidulla had secured POSB ATM cards and bank books from fellow Bangladeshis who were returning to Bangladesh. They used one of these POSB accounts, under the name of one Rana, to deposit the cheque, which was dropped into the quick cheque deposit box at the POSB branch at Hougang Central. The bank duly processed the cheque and the money was credited to Rana's account. Mokhles then used the ATM card for Rana's account to withdraw the money.

After their success with the first forged cheque, the gang went on a cheque-stealing spree, altering them and depositing the money into various accounts. The money was always promptly withdrawn. Within two months, from January to February 2003, they stole 42 cheques on 29 separate occasions. Of these cheques, 39 were altered and deposited. They managed to withdraw a total of almost $50,000 before being caught.

Mokhles was convicted and sentenced to 68 months imprisonment for 39 counts of abetment by conspiracy to commit forgery, 29 counts of abetment by conspiracy to commit theft and one count of overstaying under the Immigration Act, for which he was sentenced to five strokes of the cane.

His accomplice, Sahidulla, was sentenced to five-and-a-half years imprisonment and five strokes of the cane. The whereabouts of Khokhon remains unknown. 'Khokhon was named by Mokhles. He was, however, not able to provide useful leads on Khokhon's identity. To date, we are unable to establish the identity of Khokhon,' said CAD.

The prosecution pressed for a deterrent sentence in this case, noting the magnitude and consequences of the syndicate's operation and the fact that hardly any cash was recovered.

'There has also been a rise in the number of fraud cases since 2002. Such syndicates are difficult to apprehend and prosecute, as they are persistent and well organised in trying to elude the authorities with their clandestine operation,' said CAD.

'More significantly, such offences could seriously undermine the financial system and the commercial integrity of Singapore, thereby tarnishing Singapore's reputation as a global commercial and financial centre.'

'If not for the vigilance of the bank in detecting the forgery early, the extent of the loss would be far greater.'

Clear Mail Daily

CAD said all tenants of industrial buildings should clear their mail daily to prevent theft of mail, which in this case, led to the fraudulent use of cheques. Banks should continue to be vigilant so that forged cheques are duly identified and immediately reported, as in this case, by POSB.

'Criminals like Mokhles are scheming and unscrupulous. They make use of other people's bank accounts to facilitate a criminal act and avoid detection,' said lead investigating officer Mohd Azrin Rahmad. 'Fortunately in this instance, the bank detected the tampered cheques and quickly notified the police. This enabled police to nab the culprits and put a stop to their illegal activities.'

Lessons to Learn

  • All tenants in buildings should clear their mail daily to prevent theft of mail and cheques, which could lead to fraud.
  • Banks should continue to be vigilant so that forged cheques are duly identified and immediately reported as in this case, by POSB and DBS.

"Fortunately in this instance, the bank detected the tampered cheques and quickly notified the police. This enabled police to nab the culprits and put a stop to their illegal activities."

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This is part of a series produced in collaboration with the Commercial Affairs Department and the Legal Division of the Subordinate Courts.

Last Updated on 21 April 2016