Officials in Pima County, Ariz., knew they had a big problem on their hands when they got the call from Bank of America.  Newly released inmates had been writing fake checks using the sheriff's department's account number, scamming the agency out of thousands of dollars.  The scheme taught the county a valuable lesson and prompted it to change its inmate account system.

"They had a pretty good scam going," said Lt. Rick Gibbons, who was commander of the Pima County Sheriff's Department's inmate records section when the investigation into the fraud took place just over a year ago.  "Criminals were getting more and more sophisticated and using the routing number and account number and making their own checks."

For years, Gibbons explained, some inmates had been taking the checks they received when they were released from the jail, with all the money they had left over in their inmate accounts, and washing them - or using common chemicals that can be bought over the counter at a drug store, like acetone, to wipe off the original amount of the check.  They would then use a typewriter, or a pen if the checks were handwritten, to make the amount higher.

But the inmates would typically only make a few dollars on the checks when they washed them, minimizing the loss to the sheriff's department, said Gibbons, who now works as the commander of the county's west correctional facility.

"Once in a while, you'd catch one," Gibbons said.  "The check washing was always a certain percentage.  It was very, very low."

While the check washing scams were manageable for the sheriff's department, the inmates eventually saw a new way that they could take advantage of the county's inmate account system.  Because all of the checks going out of the jail with the inmates had the department's routing and account numbers on them, inmates began ordering their own checks with those numbers, making them out to fake businesses and cashing them, Gibbons said.

"You can literally right now, go online, and order checks up and the check companies don't know any differently," said Gibbons, noting that all you need to get new checks is a valid account and routing number.

Once the inmates figured out that they could do that, they began writing checks for high dollar amounts, to those fake businesses and cashing them.  Unfortunately, when they brought them into the bank, the tellers would honor the checks because they had valid routing and account numbers.

"As per usual, they got greedy and that is when the bells and whistles went off," said Gibbons.  "It just skyrocketed on us and we knew we had a problem," said Gibbons.

According to Gibbons, Bank of America began noticing some strange transactions on the county's inmate account and notified the sheriff's department.  The agency's criminal investigation division and finance department joined forces to find a solution to the problem, he said.

"There were some significant dollars that disappeared," Gibbons said.

Gibbons estimates that the ex-inmates involved in the scheme were able to defraud Bank of America and the department out of nearly $100,000.  Because the bank took the initial financial hit when it honored the fake checks, Bank of America was forced to raise the department's banking fees from around $200 per month to $2,000 for a period of time.

Knowing that the system of handing checks to inmates upon release from custody had some flaws, the department was forced to find a new method of returning funds to inmates when they left jail.  According to Gibbons, the sheriff's department switched to a money order system last March.

"It's the best thing since sliced bread," said Gibbons. 

According to Gibbons, the system is secure because each money order has an individual number on it; there are no routing or account numbers associated with them, he said.  The funds that are not claimed through the money orders are turned over to the state, he added.

This system, Gibbons said, has been working well for the past year and makes it difficult for inmates to defraud the department.

"I think it's going to be exceptionally difficult for them to break the system," Gibbons said.  "Not to say that it can't be done."

To further protect the department, officials made changes to its booking methods.  According to Gibbons, in the jail's new intake area, which was constructed last year, storage has been increased.

Gibbons said inmates who are in jail awaiting their initial court appearances can now be kept in the booking area for up to 12 hours.  Any money they have on them at that time is kept in the new storage area and labeled with their names.  If they are released after they appear before the judge, their money is handed back to them in cash form, rather than in a check or a money order.

Since the department has been using the money order and storage system, it has not had any problems with inmates exploiting the inmate account.

While the department's new system of prevention is working, Gibbons said that the best way for other agencies to avoid this from happening is to maintain a good relationship with their bank, which can alert them to any kind of problem like this. 

"The bank did a great job," Gibbons said.

With the money order system in place, however, Gibbons hopes that the Pima County Sheriff's Department will be able to avoid problems of this magnitude in the future.