Nigerian Check Fraud Victims Who
Are Arrested for Bank Fraud
Check from a Nigerian scammer bounces fraud
victim into jail
08/06 - San Francisco resident Matthew Shinnick tried to sell a
pair of mountain bikes on Craigslist late last year. He attracted
a buyer, received a check in the mail -- and ended up handcuffed
by police in a downtown Bank of America branch and jailed for almost
12 hours.
BofA calls the bizarre episode "an unfortunate series of events" and
says that "clearly and without equivocation, Bank of America
regrets what occurred." But the bank says it was only doing
its duty by notifying the cops when a bad check surfaced.
It also says Shinnick has no grounds to sue for thousands of dollars
in legal costs because of a 2004 state Supreme Court decision that
shields institutions and people from liability when reporting suspected
crimes to the police.
Legal experts say that BofA is right about Shinnick's lack of recourse
and that incidents like this, while unusual, could happen with greater
frequency as Craigslist, eBay and other online services increasingly
become hunting grounds for fraudsters and identity thieves.
Craigslist founder Craig Newmark acknowledged that cases of wrongful
arrest are "an increasing possibility" and said the onus
is on institutions like BofA "to show a greater commitment to
customer service."
Shinnick, 38, told me he'd received an e-mail in December from someone
who said he was in Canada and was willing to pay a total of $600
for the two bikes offered on Craigslist.
"We never talked in person," Shinnick said. "We just
corresponded by e-mail over a series of weeks."
The buyer finally said he was going to cut a check on his company's
Bank of America business account and arrange to have the bikes shipped
north. Shinnick said he received a check for $2,000 shortly after
Christmas and was informed that the extra cash was to cover shipping
costs "and for my trouble."
Shinnick, it appears, was a victim of the classic "Nigerian
419" scam, adapted in this case to sucker in unwary Craigslist
users.
Typically, the scam involves a bogus check being sent by a fraudster
as a part of a transaction. The transaction is subsequently canceled
and, before the bank has spotted the check as a phony, the fraudster
requests some or all of his money back -- money that the victim unknowingly
pays out of his own pocket.
Shinnick said he wasn't aware of the scam while he was negotiating
to sell his bikes -- his first foray onto Craigslist. But he was
made suspicious by the unexpectedly large payment.
"That was kind of a red flag because it's a lot of money," he
said. "I didn't want to deposit it into my account because I
didn't want it to bounce."
So Shinnick, who resides on Nob Hill, stopped by a BofA branch near
Union Square in early January. He said he asked a teller if sufficient
funds existed in the BofA business account to cover the check.
"She said it was a valid account and that there were funds
to cover it," Shinnick recalled. "I said, 'Great,' and
asked to cash the check."
He signed his name on the back.
What Shinnick didn't know is that he'd just become party to a crime.
The bank account may have been real but the check was phony.
What he also didn't know is that, according to the police report
for the case, a warning had been placed in BofA's computer system
to watch for fraudulent checks drawn on the account in question.
The teller contacted the business and was informed that no check
had been written to Shinnick for $2,000 or any other amount. She
immediately passed the check to the branch manager.
"I saw him talking on the phone and staring at me," Shinnick
said. "A few minutes later, four SFPD officers came into the
bank. They didn't say a thing. They just kicked my legs apart and
handcuffed me behind my back."
The police report for Shinnick's arrest says he was taken into custody "for
the safety of the bank employees as well as the bank customers."
Shinnick said he was never read his rights. He said he was instructed
by one of the cops to keep his mouth shut and not say anything. Shinnick
said he remained handcuffed in the bank lobby for about 45 minutes
while the police spoke with BofA workers.
"As people were coming in to do their banking, I was in plain
view of everyone," he recalled. "I was absolutely mortified."
Shinnick was taken to Central Station on Vallejo Street, according
to the police report. He said he was taken by van about an hour and
a half later to the Hall of Justice on Bryant Street.
At the Hall of Justice, Shinnick said, he was finally allowed to
call his parents after almost five hours in custody. He said he was
photographed and fingerprinted, and then strip-searched and given
an orange jumpsuit to wear.
"I was so humiliated, it was beyond belief," he recalled. "It
was an absolute, living nightmare. I felt like I was going to be
one of those people who gets caught in the system and has no way
of getting out."
Shinnick said he was placed in a cell with about a dozen other inmates,
mostly drug dealers and drug users.
"It was a small cell," he said. "One guy was unconscious
underneath the one toilet that was there for all of us to use. There
was only one bed to sit on. I sat on the ground."
Shinnick was finally released around 11:30 p.m., after his father
paid $4,500 of $45,000 in bail. Within 24 hours, the district attorney's
office dropped all charges against Shinnick.
In July, a San Francisco Superior Court judge ruled that Shinnick
was innocent by "findings of fact" -- a decision that essentially
erases all record of the case.
But by this time, Shinnick said, he'd spent about $14,000 clearing
his name. He wanted that money back and he felt BofA should pay it.
BofA felt otherwise. Earlier this month, a bank vice president,
William Minnes, wrote to Shinnick's lawyer to say that "Bank
of America can certainly understand that your client is angry at
the bank."
However, he said, BofA has no legal liability in the case because
of the 2004 Supreme Court ruling. Minnes warned that "litigation
would not prove financially beneficial" to Shinnick.
Minnes declined to comment when reached by phone this week.
The Supreme Court case, Hagberg vs. California Federal Bank, was
remarkably similar to Shinnick's. It involved a woman who presented
an unusually large check for deposit from her stockbroker.
A teller believed the check was phony and called the police. The
check turned out to be real, but by then the police had arrived and
had handcuffed the woman.
The woman subsequently sued for damages, but the court ruled that
all reports to the police are absolutely privileged. In other words,
no liability can be connected to telling police of a suspected crime,
whether real or not.
"The court wants to protect people when reporting criminal
activity," said Paul Glusman, a Berkeley attorney who has written
about the Hagberg case. "But this can be abused. At this point,
there's nothing that will protect ordinary citizens from a false
police report."
Jennifer Becker, a San Francisco attorney who specializes in malpractice
cases, stressed that the intent of the court's decision is important.
There shouldn't be repercussions for reporting a suspected crime,
she said.
But Becker observed that incidents of wrongful arrest "could
get totally out of hand with online commerce and eBay and all the
opportunities for fraud."
Shinnick, who works as a salesman in a San Francisco clothing store,
said it's up to banks not to call the police until they're certain
that a crime has been perpetrated -- and that the person standing
there is a crook and not a victim.
"I've been in retail for 18 years," he said. "I know
about customer service and dealing with fraud. The way to handle
something like this is to take the person into a back room and work
things out before you call the police."
Shinnick said he feels doubly violated: once by his wrongful arrest
and a second time by BofA's refusal to compensate him for his losses.
"It's infuriating," Shinnick said. "And if this could
happen to me, it could happen to anyone. That's what's so scary about
this."
San Francisco Chronicle
Third Time's the Charm
08/06 - ALLEGAN -- Even after police revealed former Otsego Baptist
Principal James Millward secretly solicited up to $80,000 from school
backers -- then sent thousands overseas to a Nigerian investment
scheme -- his supporters stood by him.
Friday in an Allegan County courtroom, more than a dozen were there
to support him again as he was sentenced to eighth months in jail
and five years of probation for embezzlement.
They said he simply took the wrong path in a quest to raise more
money he intended to give to the school.
But prosecutors were never convinced. Two past convictions for fraud-related
crimes is too much of a coincidence, they said.
Police said Millward solicited donations from various individuals
and groups on behalf of the school, then sent much of it overseas
for legal fees to secure a supposed $15 million inheritance. He never
received the inheritance.
He told some donors that funds were being used to buy computers
for the school.
Millward, 51, has insisted to friends that he planned to give inheritance
money to Otsego Baptist Academy.
"I can say his first and foremost love was the academy," said
Karen Steffens, who worked at the school. "He still loves it."
Millward, a three-year school employee before he resigned in March,
also was ordered to complete 500 hours of community service and must
wear an electronic tether for one year. His sentence prohibits him
from handling finances at any future job.
Millward earlier pleaded guilty to embezzlement involving a $15,000
gift he solicited from the Alfred W. Chase Foundation in Kalamazoo.
He gave $5,000 to the school but sent $10,000 overseas.
He apologized to family and friends Friday and said he hopes to
pay back the money.
"As I stand before you, inside of me I am crushed and I am
broken ... I realize I have betrayed the trust and let many people
down that believed in me," he said.
Millward has a 1986 misdemeanor conviction for larceny by conversion
and a 1994 embezzlement conviction for taking funds from Paw Paw
Schools.
Judge George Corsiglia was skeptical about Millward's ability to
reform.
"This isn't the first instance of dishonesty," he said. "I
think you put your vanity, greed and avarice, so you could look good,
ahead of everything."
Grand Rapids Press
Traverse Treasurer Loses Town's Treasure
06/07 -TRAVERSE CITY, Michigan (AP) - A former county treasurer
in Michigan was ordered to prison for up to 14 years after stealing
county funds and losing them in phony Nigerian investments.
Former Alcona County Treasurer Thomas Katona pleaded guilty in
May to eight counts of embezzlement, two of forgery and one of attempted
embezzlement. A judge gave him the maximum legal punishment Tuesday
on each count. He will serve from nine years and four months to 14
years.
Katona, 56, made a brief statement in court indicating how sorry
he was and praying for forgiveness, said his attorney, Dan White.
Katona will appeal, he said.
Katona was charged in January with siphoning money from an investment
pool belonging to the rural county where he was treasurer, an elected
post, from $1.2 million in county funds, plus $72,500 of his own money,
by contributing to a notorious scam that generally asks people to pay
up-front costs in exchange for a share of large sums purportedly being
transferred out of Nigeria.
Man Sentenced To Prison In Nigerian Internet
Scam Case
06/07 - PORTLAND (AP) -- A 47-year-old Westbrook man who lost everything
he owned in an Internet scam and then defrauded others is going to
prison for 18 months.
At Thursday's sentencing hearing in U.S. District Court, Todd Denson
was also ordered to pay nearly $55,000 in restitution to four victims.
Judge George Singal called the matter "a troubling case" and
said he hoped Denson's sentence would deter others who might be tempted
by get-rich-quick schemes.
The case began when Denson fell for an Internet scam out of Africa and
sent $60,000 in hopes of getting an inheritance of nine million dollars.
After he ran out of money, Denson used a variety of stories to get nearly
$80,000 from seven "investors," still in the hope of getting
the money. Denson admitted to bilking seven people, but only four of
those sought restitution.
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