[15914]
April 17, 2003
TO: BANK AND TRUST ADVISORY COMMITTEE No. 5-03
BROKER/DEALER ADVISORY COMMITTEE No. 16-03
MONEY LAUNDERING RULES WORKING GROUP No. 26-03
OPERATIONS MEMBERS No. 12-03
SMALL FUNDS COMMITTEE No. 15-03
TRANSFER AGENT ADVISORY COMMITTEE No. 41-03
RE: HOMELAND SECURITY NOTICE REGARDING AN ONGOING SCAM
According to an NASD Member Alert, the Department of Homeland Security (DHS) has
requested that the securities industry be alerted to an ongoing scam involving the use of
counterfeit or fictitious “bank” and “cashier” checks to open online trading accounts.* As
described in the NASD’s Member Alert, this scam operates as follows:
One particular organization typically mails a check, a downloaded application
containing the fictitious/stolen identity, and two forms of altered identification, after
establishing the online relationship. This may involve speaking with a broker by
telephone. The victimized firms then deposit the check because it is believed to be
official. During the 10-day clearing period, the organization will trade. If the trading
results in a profit, they would then ask the firm to wire funds to an account held at a
foreign bank. The organization will also ask the firm to wire recently deposited funds
(from the "check") to the above-mentioned accounts, because the may have "over
extended themselves". In numerous cases, the firms have sent amounts of $9,000-
$68,000.
Persons with information concerning this type of activity are asked to notify DHS
Special Agent Erik Rosenblatt at (646)230-3253.
Tamara K. Salmon
Senior Associate Counsel
* The NASD Member Alert is on the NASD’s website at http://www.nasdr.com/mem_alert2003_04.htm.