Altered Money Orders have been around for a long time. Before new technology made counterfeiting money orders pretty easy, it was a common method of committing fraud.
Criminals buy a large number of them for a small amount, normally $1.00. The $1.00 money orders are then altered, using chemicals, and a much higher dollar amount is put on them.
Because financial institutions are fairly aware of this activity AND the "getting caught" factor is a risk, they find creative ways to get a less knowledgeable person to take the risks and send them the rewards.
These "less knowledgeable" people frequently suffer the consequences, or take the RAP for them, also.
While altered money orders (not just the Postal variety) have been around for quite some time, convicts seem to have a new way of getting them cashed.
They place ads in the personal section seeking pen pals. Once they have gained the confidence of the person, they trick them into cashing the altered instruments and sending the money back to them.
The Postal Inspection Service warns:
Be aware of the telltale signs of this unusual scheme. If you begin to write letters to a prisoner who is attempting to cultivate you for his mail fraud scheme, he will slowly attempt to gain your trust and confidence. If you are a single woman, he may even send you love letters and handsome photos, and promise to marry you upon his release. Male prisoners posing as women try to lure men into the scheme as well.Link to bulletin, here.
While confessing their love for you, he will also admit that he is serving a prison term for a tax violation or other non-violent offense. But he will say his prison term is almost up, and he's looking forward to starting a new life together with you when he is freed.
Eventually, he will ask you to cash one or more postal or other money orders for him, claiming that he needs the money to pay attorney fees or court fines. Where does he get each high-value money order (often as much as $700)? He will obtain them from an accomplice outside the prison who buys them in small denominations (often only $1) and then smuggles them inside the prison, where inmates alter them to reflect higher values.
When you assist your pen pal by cashing any such money order--and sometimes there are many of them totaling thousands of dollars--you are told to send the money to a "friend" of the prisoner, whom you're told is helping with his legal defense. Of course, this friend is the outside accomplice. You will be told first to deposit the money orders in your personal bank account for temporary "safe-keeping" and then to pay out the funds to the outside accomplice.
Shortly after sending the money, you will receive a cruel "Dear Jane or John" letter asking you to understand that your pen pal only did what he or she "had to do" to survive, and now that he's out, the relationship is over. But he's not out. He's still in prison. And what's even worse, he now has your money, because the bank will charge your account for the phony money orders you deposited. Since the U.S. Postal Service routinely compares all of its cashed postal money orders with the original money order receipts, all altered postal money orders will ultimately be discovered.
Under current law, the person who cashes, or deposits and then withdraws, an altered money order is responsible for its total value--in this case, the altered value. Therefore, shortly after you pay out the temporarily held funds from your bank account, your bank will notify you that you must pay the difference between the issued amount and the raised amount. For example, if you cash a $1 money order that has been altered to $700, you will end up being charged $699 of your own money.
Although convicted criminals committing crime from behind bars makes a good news story, they might not be the only group involved in this type of activity.
Nigerian fraudsters are also known to be involved in Romance scams. Of course, there are other places the scam originates besides Nigeria, also.
Altered Money Orders don't only come from the prison system, either.
The U.S. Department of Justice reported:
At trial, the national money order fraud coordinator for the U.S. Postal Service testified that document fraud rings operating in West Africa, are known to be involved in altering U.S. Postal Money Orders and shipping them back into the U.S. to be cashed.Link, here.
Counterfeit money orders might be more common in a lot of Internet scams, but altered money orders are still being produced and successfully used.
If you happen to receive any of these altered money orders, they can be reported to the Postal Inspectors, here.