gribson t1_iyemi2f wrote
Reply to comment by WildlifePolicyChick in ELI5 why fraudsters like Anna Sorokin managed to deposit bad checks and immediately withdraw cash elsewhere without banks stopping it? by 6horrigoth
Supposedly, there used to be a way to doctor cheques in a way that would keep them in transit perpetually. The fake cheques never cleared; but also never bounced, so the bank wouldn't try to reclaim that float.
rsclient t1_iyevk72 wrote
Yes, I know how it's done! Every check has written on it the bank (routing number) and the bank's account number. The numbers are written in magnetic ink and read with a magnetic check reader.
However, not all banks use the fancy magnetic equipment. In the very old days, there would literally be bank courriers with bags of checks who would meet at a "clearing house" to swap all their checks around. Big banks with lots of volume really wanted to automate the process; small banks were happier with just a manual process.
To make a "perpetually routed" check, print a routing number (bank number) using magnetic ink that points to a small, manually-sorting bank. Then cover that over with a non-magnetic ink routing number of a big bank.
Deposit the check into the big bank, and they will read the magnetic routing number and send it to the small bank. At the small bank, they will see that the check isn't really for them, and they will send it back to the big bank. And then the big bank read the magnetic routing number, and sends it back to the small bank...
Nowadays it seems like most banks work with the check optically, so the magnetic routing number isn't really needed any more.
Digital_loop t1_iyf9p19 wrote
Til...
And countdown until someone posts this in the til subreddit.
zvii t1_iyfbrjy wrote
Good movie on this with Leonardo DiCaprio called Catch Me if You Can
LetMeBe_Frank t1_iyfegrg wrote
Now that we've learned the truth about the actual person it's based on, the real con is the friends we made along the way
zvii t1_iyfbmic wrote
Good movie on this with Leonardo DiCaprio called Catch Me if You Can
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