Feds: Texas Scammers Relied on Bank's Check 'Float' Policies

Two Central Texas residents are among eight people named in an indictment in federal court for the Western District of Texas, accusing them of running a sweepstakes scam that stole as much as a quarter billion dollars, mainly from elderly victims, News Radio 1200 WOAI reports.

Many of the suspects are Nigerian nationals.

U.S. Attorney John Bash said the scheme took advantage of the 'float' or 'pending' that banks use when depositing paper checks.The suspects would mail checks for $8,000 to the victims, and told them they had won millions of dollars in a 'sweepstakes.'But first, they had to deposit the check, withdraw $8,000, and send the money to a 'sweepstakes representative to facilitate the collection of his or her prize.''

When the back accepted the check, and even showed a portion of the amount as having been deposited into the victim's account, the victim felt that the scheme was legit, and withdrew funds, believing they were the funds that had just been deposited, and sent the money to the scammer.

What many people don't realize, and what the scammers were banking on, is that when paper checks are deposited, the bank marks the deposit as 'pending' while it investigates the check.  The victims think the fact that the check was not rejected immediately means it is good, which it isn't.

By the time the bank rejected the check, it was too late, the victim's real money had already been lost.

The suspects are facing a mandatory two years in federal prison and potentially up to twenty years.

The two central Texas residents are in federal custody, while some of the others remain at large.


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