It's been about a year since Kathy and Robert Milton got taken, and they're still angry and hurt.

"It happened right before Christmas. Right before the holidays," Kathy said through tears. "So it wasn't a good time."

The Marysville couple wanted to sell their bedroom set, so they put an ad on the Craigslist web site. 

Within a day they got a response from Melody Landrus, who said she wanted to buy the furniture and have it shipped to Alaska. In her e-mail, Landrus told the Milton's to expect a check for $3,500, which was much more than the Milton's were asking.

"We were supposed to send $2,000 to her mover and then the rest was ours to keep for the troubles and the transaction fees, 'cause it was all Western Union," Kathy said.

Robert said they assumed they would make a few extra hundred dollars off the deal. "It looked like a valid check, right out of a checkbook," he said.

Before wiring the $2,000, Robert and Kathy contacted their bank to make sure the check had cleared. They were assured that it had.

"We assumed when it clears, it clears," Kathy said.

A week later, when the check bounced, the bank pulled $3,500 -- the amount of the bogus check -- out of the Milton's account.

"After late charges and bank fees, it was well in excess of $4,000 that we got hit for," Robert said.

It's one of the biggest scams happening right now. Overseas con artists are flooding the country with counterfeit checks and are stealing a staggering amount of money.

The bad guys search online classified ads and buy things with their worthless checks. The victims never see it coming until the money is gone and they're left holding the bag. The average victim loses about $4,000.

The storyline varies depending on the specific con, but the victim is always told to do the same thing: deposit the fake check or money order into their own account and then wire transfer a portion of the funds back to the sender.

The swindlers prefer wire transactions because they are fast and generally irreversible. Once you realize you have been scammed, you can't stop payment. It is also easy for them to get the money this way. It can be picked up in cash almost anywhere in the world.

Another victim, who spoke on condition of anonymity, was burned trying to rent her Seattle apartment with an online ad.

A day after posting the ad on Craigslist, she received an e-mail from England from someone claiming to be a businessman moving to the U.S.

He said he wanted the apartment and would have his company send his relocation check directly to her. The check was for $7,900.

"It looks like a real check, it feels like a real check," the victim said. "And it says certified, has a signature on it, cashier's check."

The bank took the check and the woman said there were no problems at first.

The instructions from the would-be tenant were to deduct the first and last month's rent and wire the remaining $5,400 back to his overseas interior decorator.

She said the money from the check showed up in her account for about two or three days.

"Which was great and then we had a negative balance and we had to pay $5,400 back to the bank," she said of what happened when the bank discovered that the check was fake.  "We lost $5,400 just like that."

Billions Lost

The scam takes advantage of the fact that just because a check supposedly clears and the bank posts the money in your account, it doesn't mean the bank can't later take that money back if it finds out the check was a counterfeit.

The phony checks look real to you, and even look real to your bank.

"There's a basic lack of communication between customers and banks," says Susan Grant of the National Consumers League. The con artists know that most people don't understand the difference between the funds being available and the check being good.

Under federal law, you have the right to withdraw money after making a deposit relatively quickly - within one to five days - depending on the type of check or money order that you've deposited. But it can take weeks or months for a counterfeit to be discovered.

U.S. Postal Service officials say they have seized more than $2 billion worth of high quality counterfeit checks coming from Nigeria, England, the Netherlands and Canada.

As part of the global crackdown, dozens of people have been arrested and computer equipment has been confiscated.

But many checks are still getting through, and when the checks are found to be fake, banks come after the person who deposited it, not the actual con artist.

"I'll tell you what. I've looked at a bunch of (checks) and they are very convincing," said Assistant Chief Postal Inspector Harold Lane. "They look like the real thing."

Many variations

Counterfeit checks are now adding a devious twist to the old sweepstakes scam.

Stacy Slipp is a bookkeeper who deals with checks all day long, and she was scammed big time.

It started when she received a letter telling her she'd hit the jackpot in an international sweepstakes.

"It said I had won $62,000," Slipp said. "When somebody tells you you've won this much money, you automatically in your head start spending it."

Included with the letter was a check for $3,750, purportedly to pay taxes to the European Union. The letter instructed Slipp to cash the check and wire the money overseas.

Slipp took the check to her bank, and they gave her the money on the spot. Nobody warned her the check could be bogus.

"I thought it was a real check. I honestly did"

The Olympia woman took the money and, as she was instructed, wired it to the Netherlands. Once the prize check bounced the bank came after her.

"They told me I was going to have to pay it back -- $3,750," Slipp said. But she doesn't have the money to repay the bank.

"Eventually their collections department will get a hold of it and they will start legal proceedings against me for this $3,700 plus interest," she said.

"I should have been smarter. I should have investigated all this. I really should have. But you know, all I saw was the $62,000, just like most people would."

Like most cons, the fake check schemes play on victims' expectations of easy money, whether it's lottery winnings or a higher sale price than you were hoping for.

You should always be wary of wiring money to anyone you don't know personally, because once you send that money it is almost impossible to get back.

The bottom line: Avoid any transaction that involves a check or money order where you are required to wire back any money. There is no legitimate reason for that.


Fore more information:

FakeChecks.org

Giving the bounce to counterfeit checks

Fake Check Scams

Counterfeit checks an Internet menace