KANSAS CITY, Mo. — Officials say Kansas City plays a central role in a gang scheme that hires homeless people to cash counterfeit checks.
Assistant U.S. Attorney John Cowles says the scheme — dubbed Operation Homeless — has cost Kansas City area banks about $1 million in recent years. He calculated the loss nationwide at more than $10 million.
A break in the case came in October 2011 when an Olathe, Kansas, convenience store manager was cleaning up his trash bins and noticed a large amount of what appeared to be stolen mail. The resulting inquiry into mail thefts at 20 Johnson County, Kansas, businesses led to a national bank fraud investigation, The Kansas City Star reported. About half of the 60 people prosecuted nationwide for hiring homeless people to pass counterfeit business checks have been charged in Kansas City and Springfield.
Almost everybody prosecuted for this crime has ties to, or is a member of, a Bloods street gang that works two neighborhoods in one Atlanta ZIP code, 30317, Cowles said.
"They're all from Atlanta, and they're all doing the scheme the same way," Cowles said. "Some of them are related to each other. Some live in the same neighborhood."
Details of the scam came to light this past week at the federal trial of Marion Norwood, a 46-year-old check printer from Atlanta who led crews into Kansas City in late 2012 and early 2013. The jury deliberated less than an hour Wednesday before convicting Norwood.
Here's how the scheme works: Criminals break into shared mailboxes outside business and industrial parks and look for payroll checks or payments to vendors. With checks in hand, printers — like Norwood — duplicate the checks on computers, down to signatures and bank routing numbers.
Two other crew members, designated as the driver and the recruiter, then cruise homeless shelters, looking for someone willing to cash the checks. Next, the driver and the recruiter text the names of the homeless people to the printer.
Often, the driver and recruiter take the homeless people to a motel for a shower, a shave and a change of clothes before the check is cashed. The homeless person generally receives 10 percent of the face value, or $200 for a $2,000 payroll check.
"This is a huge problem for our service," said Steve Ryan, an inspector for the U.S. Postal Inspection Service.