If a fraudulent check came across your desk, would you know it? If you did recognize that the check was no good, would you know what to do?

Tom Kelsey, used equipment advisor for LandPro Equipment, recently found himself in this exact situation. 

When it comes to exporting used equipment, the opportunity for fraud is large. Here’s what Tom experienced. He received an email from someone interested in a combine with the intention of exporting it. Tom gave him a price, including delivery to the Baltimore port. The combine would be prepared for export in terms of cleanliness and would be delivered to the Baltimore port. The customer agreed. 

In the notes section of the purchase order, Tom was very clear that the combine would not leave for the port until LandPro had valid money in hand. There were a few indications that things might have been fishy, Tom says. 

“He kind of tipped his hand to me because he said he wanted wire information. Then it went from being a wire to a check coming from his North American financial partner. I Googled the source and it looked like it had an international connection. It had offices in Canada, New York City, Chicago, it all looked OK.”

“I struggle with how many other dealers are having to go through this? How many other dealers are getting caught?…”

A couple weeks ago, the $262,000 check arrived — and the red flags went up. The check was delivered via UPS from an Ontario address, but the check was from an Alabama manufacturer. 

Tom reached out to the CFO of the Alabama company the check was from and confirmed his suspicions about fraud. 

The company had sent a $1,500 check to one of their vendors in Ontario, and somewhere along the way, it was intercepted. The payee name and amount were removed, or “washed,” but the signature was kept. 

The CFO told Tom the check had been redistributed to 30 different people. LandPro happened to receive the second largest check. Luckily, Tom was able to connect the dots and see that something wasn’t adding up right. 

Tom made a copy of the check, the shipping label and the email correspondence of the person who initiated the transaction for the CFO of the other company to help them try to get to the bottom of the washed check.

“I struggle with how many other dealers are having to go through this? How many other dealers are getting caught?” he says. If your dealership has had a similar experience, I’d like to hear from you. Whether your dealership has experienced a similar situation or not, do you have processes and best practices in place to help alert you to potential fraud? 

As I told Tom, I don’t have the answer to what the best practices are or what dealers need to be looking out for — but I’m ready to do the digging and find out for you.