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Freaky fraud-ee 

In a bad economy, even simple savings accounts look enticing to local (and global) scammers

When the first call came in about an attempt to cash a check on the World Mountain Running Association's savings account, Nancy Hobbs' reaction was abrupt.

"Arrest him!" she told the California bank teller. "We don't do checks."

That didn't happen, so by the time Hobbs, the group's treasurer, got a third call in regard to a $7,180 check, also from a teller in California, she was ready to take matters into her own hands.

"Why don't you hold on, and I'll call police," she said.

When Hobbs called, she found a system so overburdened with fraud investigations that the idea of an arrest in her case seems almost laughable.

"We have cases from '08 that still haven't been looked at," notes Jason Ledbetter, one of eight detectives in the Colorado Springs Police Department's financial crimes unit. "We try to get to them, but we also want to get the heavy hitters."

In 2008, Ledbetter says, Colorado Springs police received about 7,000 reports — nearly 20 a day — of check frauds, identity thefts and acts of embezzlement. Investigators focus on big cases, like the embezzlement investigation of former Grace Church rector Rev. Don Armstrong, and those in which the architects seem to be located nearby.

One recent scam ensnared several locals desperate for employment, Ledbetter says. After responding to an online ad to work at home for a computer company, they were sent realistic-looking checks for up to $1,500, with instructions to buy $200 software for their computers and to send checks for the remainder back to the "company."

Detectives followed the money to a local guy in Colorado Springs, Ledbetter says, but it turns out even he was a sucker in a scheme that netted thousands for head-honchos back in the scamming mecca of Nigeria. That put a damper on the local investigation.

Nationally, the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center, reported $265 million in Web-related losses in 2008 alone.

Katie Carrol, a spokeswoman at the Better Business Bureau of Southern Colorado, feels that scammers are getting better at exploiting current fears and trends. She notes that it only took hours for schemers somewhere to throw up a Web site and blast out e-mails aimed at duping the worried out of $19.95 for a useless "swine flu survival guide."

Printing fake checks, Ledbetter warns, is now so easy that it's risky to give real ones to anyone you don't know. With account and routing numbers, and other basic information on a check, would-be forgers can go wild.

That seems to be what happened with Hobbs.

A longtime member of the Colorado Springs running community, she volunteers as treasurer for the World Mountain Running Association, which oversees annual mountain racing world championships. Member countries typically pay annual dues by wire transfer, and someone apparently thought it would be helpful to put account information in the group's annual newsletter.

In two days, Hobbs learned of five fake checks that unknown schemers tried to cash on the WMRA's account. Though money was replaced for the single check that a bank let through, it took hours to set things right.

Carrol says that while the nation remains in a slump, we can expect more such stories.

"We're all in worse economic shape," she says. "Consumers are much more vulnerable now."

lane@csindy.com

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