
A Man Walks into a Bank - jkharness87
http://www.ft.com/intl/cms/s/2/93a47a62-daf0-11e1-8074-00144feab49a.html
======
zalew
Heh, a check in 1995 you say. Ok, hear this. This year 2 guys here in Warsaw
put a bag full of newspaper into a cash deposit and walked away with 1.5
million Euro on their account. By 'their' account I mean an account set up on
a fake or some bum who gave them their ID for a few hundred. Supposedly they
had an insider who thought them how to build trust on the account, so after
some time the deposits are cashed in before verified. The scammers vanished
into thin air, in the meantime cashing out about 1 mil Euro, and the guy
putting the bag on the cctv probably turned out to be some other drunkard.

~~~
shin_lao
I'm sorry I don't understand the scam. How did they make the cashier believe
the newspaper was actually cash?

~~~
mbateman
ATMs don't scan a deposited check or cash. They wait for someone in the bank
to open it and determine whether it is legit, then the account is credited.
But after a while your account becomes "trustworthy" and any deposits are
credited to the account _before_ it is checked.

~~~
PakG1
Living in China, I can say that when you deposit, you deposit bills that go
through a counter and counterfeit scanner. If any bills don't pass the test,
they're separated out and given back to you. You can try to submit again if
you wish. It's amazingly efficient and works well. I'm surprised we don't have
similar machines in Canada from where I originally hail, especially after the
currency revamps.

edit: I have no idea how depositing cheques (checks for you Americans! :D)
works here though.

~~~
MengYuanLong
This is true outside the banks as well. If you make any purchase exceeding 250
USD (approximating a purchase requiring 10+ 100RMB bills), chances are the
store will have one of these machines.

China is also the only country I've found myself in possession of counterfeit
currency. Sigh, I guess I should just take the loss of 100 RMB but I keep
thinking a little luck in a taxi could keep the system flowing...

~~~
PakG1
Heck, I get scanned in some restaurants these days for 30RMB meals. :)

------
derda
It amazes me everytime, that in the US day-to-day banking still consists
mostly of writing, sending and cashing cheques.

In germany (I dont know about the rest of Europe, but I guess the situation is
similar), cheques are virtually non existent. You can still get and cash them,
but you will get weird looks from the person behind the bank counter, most of
the time there will be a hefty fee associated with it(I once cashed a cheque
from an US-bases affiliate program and my bank charged me a ridiculous amount
for the process).

~~~
veyron
Checks are still useful because most online transfer mechanisms cost money.
For example, my bank recently started charging for ACH transfers, and wires
are always expensive.

~~~
theorique
Yeah, exactly.

I was going to try some new method (PopMoney?) to pay my roommate for rent and
utilities, and then I noticed it cost $1 per transaction. Back to paper checks
(= free).

It's not the fact that it costs something - a dollar is no big deal - it's the
fact that the alternative is free.

~~~
cdcarter
Does your bank offer an online bill-pay system? Mine does for free, and if
they can't deliver the money electronically they cut and mail a check for you.

~~~
theorique
The banks I use do offer this. I call it "electronic on at least one side"
because it appears like an electronic payment for me, even if it's old-school
on the other end.

It works fine for the "paying utility" case (or "mailing combined rent
check"), but it feels kind of silly when it's for transferring money to my
roommate who lives 20 feet away.

------
corin_
A couple of people have already linked to the author's website where the
original story is, but for those of you who (like me) read the FT article and
then wanted the ending... rather than reading the entire, rather lengthy,
story (which begins at
[http://www.goodthink.com/writing/view_stories.cfm?id=11&...](http://www.goodthink.com/writing/view_stories.cfm?id=11&page_id=2))
you can skip right to the conclusion at
[http://www.goodthink.com/writing/view_stories.cfm?id=11&...](http://www.goodthink.com/writing/view_stories.cfm?id=11&page_id=14)
\- just the first few paragraphs.

~~~
megablast
He returned the cheque after getting a written letter from the bank, and had
to pay for the interest he made.

------
larrys
I question this story actually.

Checking the newspapers from that era I find several stories that were all
based on the same AP wire story. Here is one (or search news.google.com for
others)

[http://news.google.com/newspapers?id=2UlWAAAAIBAJ&sjid=G...](http://news.google.com/newspapers?id=2UlWAAAAIBAJ&sjid=G-sDAAAAIBAJ&pg=5323,648814&dq=patrick+combs+first+interstate+bank&hl=en)

[http://www.nytimes.com/1995/10/04/us/fake-check-story-
ending...](http://www.nytimes.com/1995/10/04/us/fake-check-story-ending.html)

A few things about this.

1) From what can find there is no attempt to verify anything with any bank. I
understand that banks aren't going to want to trot out that this happened. But
at the very least good reporting (this was also in the NY Times) would require
verifying that it actually happened, even with a "no comment" from the bank or
the attorney.

2) The type of career he decided to pursue. He wrote a book about "Make
College Easier, Beat the System and Get a very cool job".

3) The fake check has a micr on the bottom for the amount. But you don't get
cancelled checks with micr, the person who wrote the check does. The photo
byline clearly says "Patrick Combs's fake cheque, which arrived as junk mail"

4) The micr says "95,093.55" and the check is for 95,093.35.

5) I haven't checked the routing number but there is no mention of the bank
that the check was drawn on.

------
portman
I remember this story flooding the Internet in 1995. I'm confused why the
author is doing a "one-man comedic show" 17 years later.

~~~
redwood
Has it been 17 years since 1995? OH MY

~~~
dasil003
Argh, 20-year high school reunion coming up. 10-year didn't seem so bad,
20-year means OLD.

------
petenixey
This story was from a little while back but what's to stop you just printing a
cheque from someone else and paying it into a bank today? There's no alerting
to the originator that a cheque's been paid out and there are no obvious
authentication tokens on the cheques.

Frank Abignale only had to get past an initial look-test so what techniques
protect against (and are consistently used) to prevent cheque forgery today?

~~~
sudonim
As far as I know, there are just 2 things preventing fraudulent checks:

1\. Obscurity : Someone has to know your account number and routing code.

2\. ...

Ah, make that just one thing preventing fraudulent checks. It's scary. Any
legitimate check, for any amount contains enough information to create a
fraudulent check to drain a bank account.

~~~
dalore
What about signatures? Surely the signature has the match the one on file or
the cheque bounces?

~~~
sudonim
How would that process work?

Check gets deposited in ABC bank (issued by XYZ bank). ABC bank sends a scan
of the check to XYZ bank. And XYZ bank has an employee whose job it is to look
at every inbound check to make sure the signature matches? Or maybe they have
computers to recognize the signature and compare them for similarities. If
it's too different, then it's flagged and sent to an employee for further
review?

I suppose it's possible that this happens. I honestly have no idea. Next time
you write a check, sign it "Snoopy" and see if it still clears. My guess is
that it would.

~~~
spacemanaki
> Or maybe they have computers to recognize the signature and compare them for
> similarities. If it's too different, then it's flagged and sent to an
> employee for further review?

Yeah, that'd be nice, and I think it's well within the grasp of the big banks
to deploy some image recognition software to do this, and yet I'm fairly
certain they do not. Anecdata to follow...

I recently had a blank check stolen from me and filled out with a completely
fake looking signature, it was really almost cartoonish. Yet the bank (Chase)
did nothing to stop this from being deposited by the thief, and debiting my
account. I only found out a month or so later, and filed a dispute, which they
resolved. But the only reason I noticed it was that I don't use checks very
often, so even though the amount was not an outrageous sum, it stood out. The
bank's suggestion to me, for the future, was to NOT USE CHECKS. Ever. The low
level employees at the local branch, when I was there closing the account and
opening a new one, told me NOT to order checks at all, and pay rent with a
direct transfer or bill-pay feature.

This is what people mean when they say the only innovation in consumer level
banking is improvements to ATMs.

~~~
cdcarter
Bill-pay features are a pretty good innovation, I'd say.

~~~
spacemanaki
Fair enough I suppose, and I'd add the rest of online banking is a big
improvement too.

The fact that checks are not anywhere near as secure as I would want (or
apparently the bank's own tellers would want) just irks me, since they're much
more convenient than bill-pay, which takes 5 business days to process while
handing a check to my landlord takes less than 1.

------
wrath
Am I missing something here?

The transit, bank and account number on the check must all be fake (or I would
hope that this get-rick-quick company didn't actually send their real bank
information!). So whether or not the check has non-negotiable printed on it is
a mute point. The check cannot be routed anywhere and would have been flagged
immediately. This is not the good ol' days of bank fraud, ala Catch Me If You
Can.

Does the fact that he knowingly deposited a fake check constitute fraud in the
US?

~~~
Symmetry
They might have just Photoshopped an image of a check the company had laying
around, in which case the routing details, etc, would all be correct for some
unlucky entity out there.

~~~
mseebach
If that was the case, the company sending out the checks would be due for a
lengthy prison-term on a couple thousand charges of mail fraud.

------
alan_cx
To amuse: Dunno if things have changed here(UK) but a cheque can be (or could
be) anything. It's just a bit of paper with some details on it. In fact, I'm
not sure there is a requirement for it to actually be on paper. Legend has it
some students in the UK banked a cow (yes a large moo moo thing) because it
had the right details on it.

Anyway, if this fake cheque had all the right details on it, or enough to make
the transaction, how is it fake? Or how could it clear if the details were
wrong? Surely US banks clear the cheque before crediting the account with the
money?

~~~
staticshock
_Legend has it some students in the UK banked a cow_

Not according to snopes: <http://www.snopes.com/business/bank/cowcheck.asp>

------
dabeeeenster
I once paid a fairly big cheque (> 10k sterling) into the wrong business
account. It cleared but I only realised the mistake a couple of weeks later.

I rang the bank (Santander in the UK - terrible bank don't use them) and they
said "Oh yeah, we generally don't check the payer".

Really.

------
three14
More details (many more...) here:
[http://www.goodthink.com/writing/view_stories.cfm?id=11&...](http://www.goodthink.com/writing/view_stories.cfm?id=11&page_id=2)

------
DanBC
There's a reasonably well known scam where BadBob will order £2,500 worth of
goods. The cheque will be sent, made out for £12,500.

BadBob then calls and tells you to cash the cheque, send the goods when the
cheque clears, and to just money transfer the excess when the cheque clears.

As this story shows a cheque clearing means almost nothing. The bank will
discover the fraudulent cheque, normally a long time after you've sent the
goods and the extra cash to BadBob, and they will take the money off you.

You are out the time; the goods; and the extra cash.

------
corin_
Good story, shame (though understandable) that it cares more about promoting
his show than actually finishing the tale for readers.

~~~
DeepDuh
"So... WHAT HAPPENED?"

If you want to know what happens next, order our DVD now!

~~~
jj_aa
IIRC from this guy's site, before it was a show, he had a stand-off with the
bank for a while before learning that this check was holding up a merger
between his bank and another company, so the whole executive suite was
freaking out. Eventually he gave the check back with no repercussions and some
token like a letter of apology.

~~~
aoprisan
he didn't apologize, the bank did. that was the whole point of him cashing
$95k and holding it until the bank acknowledged that they screwed up.

~~~
jj_aa
sorry, should have clarified: I meant the bank was the one with the token
apology, not the guy who deposited the check.

------
jorgenhorstink
In the Netherlands the use of cheques is abolished in 2002. We all use
internet banking now, using (at least) two-factor authentication, and we are
able to transfer money from and to our current or savings accounts.
Transferring money to other bank accounts (paying rent, paying to friends
etc.) is also very easy.

Most banks also have mobile applications for smartphones making money transfer
even easier. I'm able to transfer money to people I've already sent money to,
by just using an iPhone app, and a personal pin code. When I loose my phone, I
can just block the app, just like what I'd do when I loose my plastic (credit)
bank card.

In Holland we also use iDEAL [1], a nation-wide system for online shopping. It
works a little bit like OAuth; I provide the webshop the bank I use, the
webshop requests a money transfer, the bank creates a unique transaction, the
webshop sends me to the bank, bank requests credentials and processes payment,
and sends me back to the webshop proving details about the transaction. This
system sounds much more secure to me than the credit card paradigm; only using
a credit card number, an expiration date and a 'security code'.

I just don't understand why the USA is still using a method so susceptible to
fraud.

[1] <http://en.wikipedia.org/wiki/IDEAL>

~~~
joshmlewis
In the US with the major banks you can easily transfer between accounts and
other accounts in the same bank easily online. As someone noted this article
is from the mid 90s and is a little outdated.

------
joakin
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corin_
What looks scary to you? Most sites give you cookies without asking you, so
why is being told that it happens more scary?

Anyway, the reason for it is an EU directive, find out about it from the UK
government branch tasked with these things, the Information Commissioner's
Office:
[http://www.ico.gov.uk/for_organisations/privacy_and_electron...](http://www.ico.gov.uk/for_organisations/privacy_and_electronic_communications/the_guide/cookies.aspx)

------
fishercs
Most systems today are completely automated, they'll check that the routing
number is valid but not the account number the check is drawn on. Routing
numbers don't change, but hundreds of thousands of account numbers are created
every day throughout the US.. banks are different on how they do their
internal account numbers, different algorithms are used when generating these
account numbers. I work for a relatively small bank and on a normal day we'll
clear 100,000 checks.

With the changes put in place after 9/11 and the Check 21 legislation float
has diminished quite a bit but it still exists. Unfortunately there's just so
much blue tape that banks are required to jump through that money that is
fraudulently acquired takes some time to get back.

the reason this even happened is he was a good standing customer, and they did
have his account information so of course they let him deposit it. it would be
the responsibility of the bank that the check was drawn off of to catch the
mistake. The man's bank just issues a credit to the bank that is drawn on..
it's when that bank catches the error they have to send off for a correction,
this normally takes quite a bit of time.. we're talking 2-3 weeks especially
in 1995.

the minute the man withdrew the cash their internal system red flags such a
large withdrawal amount, this is why the bank was suddenly made aware of that
transaction.

~~~
bryanlarsen
"suddenly made aware". According to the long version of the story, FICAL was
made aware of the error within the 24 hour window, but did not notify Combs
until almost 3 weeks later.

------
kitsune_
I live in continental Europe, can someone please explain the American cheque
system to me? Is it still widely used?

We have giro and SEPA transfers. If I want to transfer money to someone, I
simply order my bank to withdraw said amount from my account and transfer it
to the destination account. I could even do this without having a banking
account. Anybody could walk to a post office or bank and pay into someone's
bank account with cash on hand.

~~~
peckrob
American here. Checks are basically little pieces of paper (about the size of
two credit cards; they usually come in a book of 25-50) that allow the
recipient to make a demand against my account. I write on the check the name
of the recipient, the date, the amount (in two places, one in long form and
one in numeric form) and sign the bottom. They have a set amount of time in
which they can deposit the check (I think it's somewhere between 30 and 90
days, but I can't remember). The recipient endorses it on the back by signing
it and deposits it at their bank, and their bank handles transferring the
money between the banks and into the appropriate accounts.

Printed on the bottom of the check is my account number and a routing number
for my bank. They're printed in a format called MICR, which uses magnetic ink
(or used to, not sure if they still do) so that computers can scan them
quickly. When I worked at a grocery store in the 90s, our systems were
supposed to actually verify whether or not a check was "good" by checking the
amount against the amount available in their accounts. Not sure if this really
worked, because I never saw a check get rejected.

It used to take several days for the whole thing to play out. What would
happen is that, when the recipient deposited one of my checks, their bank
would credit them the amount of the check immediately (there are some
limitations on this depending on the size of the check; banks have various
policies about that) and the check would enter the inter-bank system. A day or
so later, the actual amount would be withdrawn from my account.

In most places, passing a bad check (called "bouncing") is a crime, though
most banks will provide some type of overdraft protection (usually with an
accompanying steep fee) to keep you from getting in trouble with the law.

Checks were widely used up until the early-mid 2000s, when debit cards started
to become widespread. These days, they are primarily used by the elderly who
refuse to adopt newer technology, in businesses that do not use direct
deposit, and in complex financial situations (such as purchasing real estate).
Other than that, the vast majority of purchases in America happen via the card
networks.

I write maybe three checks a year and receive maybe two. Everything else is
done online or by the card networks. And best of all, when I receive a check,
my bank (USAA) lets me just take a picture of it with my iPhone and
immediately credits me the amount, as a scan is considered a valid
reproduction of the check.

------
bluesnowmonkey
It sounds more like he was hoping to get $95k than that he was playing a
practical joke. As if banks have senses of humor. And after the bank and media
noticed the situation, he was probably enjoying the attention in addition to
holding out hope that he'd still get to keep the money somehow. It's sleazy
how he tries to spin it as if he had some moral high ground.

------
lincolnwebs
That wasn't a story, it was a trailer.

------
Bricejm
I'm surprised that this wasn't considered fraud. Sometimes bank tellers make
mistakes, but that shouldn't lead to the bank taking a $95k loss. This guy
played a joke on his bank - which would normally be considered illegal, but
didn't like that the bank was angry?

------
DiabloD3
I'm sorry, but from what I know of banking law (ianal, nor do I play one on
the Internet, but it helps to know enough to defend yourself from banks)...
why isn't he in jail? I thought knowingly doing what he did constitutes bank
fraud and numerous other charges?

~~~
veyron
He didn't generate a fraudulent check, so he didn't do anything illegal. It's
akin to receiving a forged bill and then using it at the next place.

~~~
corin_
Worth noting that (at least according to him) it's not just that he didn't
make the fake cheque, it's that when he gave it to his bank he meant it as a
joke, he wasn't actually trying to get the money.

------
mortenjorck
Why, in August of 2012, is the _Financial Times_ running a piece _by Patrick
Combs himself_ rehashing the same story he's been telling for the better part
of two decades? I mean, it's a cool story and all, but... The Financial Times?

------
snorkel
In other words, banks use lazy evaluation to validate checks.

------
timkeller
Remind me why we still have cheques in our banking system?

~~~
freehunter
Because cash doesn't leave a paper trail and not everyone can accept cards.

~~~
jarek
And third point necessary here: because U.S. banks don't have any other
reasonable inter-bank transfer system.

~~~
steve-howard
Well, it does, but they've chosen to monetize it. I can transfer money to
anyone with an account, but I have to pay $25 if I want it done today and $3
if I want it done some time next week.

------
Tichy
Could be some entirely different scam? Like they could write cheques in the
names of old people with lots of money in the bank, then, if some people cash
them in, they could approach them and ask for their money back. If some people
comply and don't check carefully who the money originated from, they have
extracted some money from random people who may or may not have noticed it.

Not sure how cheques work in the US, though - I think we don't have them
anymore in Germany.

It is a common scam here to be asked to receive some payments on your bank
account and pass them on. When the original owner discovers it, you are the
culprit and not the scammer...

~~~
Xylakant
We still have cheques in germany. They're rarely used and of limited
usefulness in most cases, but if you want to hand over large amounts of money,
they can be useful [1]. Our Ex-President Wulff notably received the loan for
his house via check.

[1] Auctions for example, where the payment must be delivered immediately and
cash would be impractical. Usually, in that case, a "Bundesbankscheck" is used
which is as good as cash:
[http://de.wikipedia.org/wiki/Best%C3%A4tigter_Bundesbank-
Sch...](http://de.wikipedia.org/wiki/Best%C3%A4tigter_Bundesbank-Scheck)

------
akandiah
This does not always work in the favour of the client. As mentioned in the
bottom of the article, a similar incident took place in New Zealand. The
couple involved have been arrested, found guilty on multiple charges of theft
and are currently awaiting on the sentence:
[http://www.stuff.co.nz/business/money/7083997/Runaway-
millio...](http://www.stuff.co.nz/business/money/7083997/Runaway-millionaire-
Leo-Gao-guilty)

------
sch1705
Pretty sure this constitutes fraud. Plus doubt the cheque processing is still
carried out as described in the story- doubt any bank today would credit the
customer account based on a bogus cheque that couldn't be validated. Surprised
this was published in the ft as sounds like an urban myth.

------
eslachance
The question is, can this be repeated? Junk mail creators haven't necessarily
seen this story, they may not know that they are in error.

Would some sort of penalty be applied to someone depositing such a check,
assuming one received such a check and it _does_ have all the necessary
features?

------
webmonkeyuk
Off the back of this Hacker News post I went to see him perform yesterday
evening here at the Edinburgh show.

It was a great and really animated show. I wish I'd just skimmed the FT
article though as the first 10 mins were just going over that again!

------
chris-j
Judging by the numerous sold out shows[1] over the years I bet this fake
cheque has actually helped him make a lot more than $95,093.35

[1] <http://www.man1bank0.com/dates.cfm>

------
jusben1369
I would have thought that any laws around checks clearing etc would start or
end with a big caveat along the lines of "Assuming there is no known or
deliberate attempt to defraud"

------
pavel_lishin
I swear the entirety of this story used to be online. I suppose he took it off
to help his sales, and I'm too lazy to find a cached version.

~~~
telemachos
See three14's post[1] in this thread. He gives the link - the story is still
online:

[http://www.goodthink.com/writing/view_stories.cfm?id=11&...](http://www.goodthink.com/writing/view_stories.cfm?id=11&page_id=2)

[1] <http://news.ycombinator.com/item?id=4344785>

~~~
robbiemitchell
The last page will try to sell you on the DVD. Just change the page_id to "16"
to read the conclusion.

------
z02d
There was a link to the same story afaik last year

~~~
crusso
Look at the date on the check: April 26, 1995.

This guy has been milking this story for quite some time.

