A former Stony Point man has been accused of stealing $10,455 from a local cash-checking business resulting from a workers compensation claim, the Rockland District Attorney's Office said today.

Robert Ascolillo took advantage of a mistaken address on a check to pocket $10,455 sent to him in November 2008 by his insurance carrier, Continental Casualty, Inc., prosecutors said.

Ascolillo is accused of asking the insurance company to put a "stop order" on payment of the check for a 2007 workers compensation claim and reissue the note to him.

He then cashed the first check before the stop order went into effect at David's Money Center cash-checking business in West Haverstraw, District Attorney Thomas Zugibe said in a news release today.

When the new $10,455 check arrived in the mail from Continental Casualty, Ascolillo deposited the check at his bank account, benefiting by twice the amount of his claim, Zugibe said.

Because Ascolillo got the payment of the first check stopped, the insurance company did not cover the $10,455 check cashed at David's Money Center, leaving the business short the money, Zugibe said.

Continental Casualty asked Ascolillo to to return the proceeds from one of the two checks, but he refused and claimed through his lawyer that he deserved the money, Zugibe said.

David's Money Center went to court and won a court judgment for $10,455 from Continental and Ascolillo.

Ascolillo defaulted, leaving the insurance company to pay the check cashing business, which operates in several Rockland communities and in New York City.

Ascolillo, who now lives at 1 E. Indiana Ave., Beach Haven Terrace, N.J., was charged with one count of third-degree grand larceny following an investigation by the Rockland Special Investigations Unit and the New York State Insurance Department Fraud Bureau.

He waived an extradition hearing to New York to face the felony charge and was brought back on Aug. 1. Conviction of the grand larceny count carries a maximum of seven years in state prison.

Ascolillo was arraigned Friday by state Supreme Court Justice William A. Kelly and ordered held on $2,500 cash bail or a $10,000 bond. He is scheduled to return to court on Sept. 7.

HOUSTON (KTRK) -- Two people are accused in an elaborate counterfeit check cashing scheme at Houston area stores.

Dante Sumlar is the alleged mastermind of the group. Two of his alleged accomplices, Jennifer Lynn Mullinax, 40, and Christopher Antone Hill, 46, are facing charges of engaging in organized criminal activity. According to court documents, Sumlar hired a homeless man in December 2007 to try to purchase gift cards using a $5,000 forged cashier's check at a Walmart in southwest Houston. The clerk became suspicious due to the large dollar amount of the check, and with the help of a bank clerk, found the check to have the routing number from Texas State University. The employees called police.

Houston police arrested the homeless man, Steven Maheux, who told investigators that he was picked up at a homeless shelter by a black man named "Tony" and paid $200 to cash the checks. Maheux said another man named "Chris" picked him up, bought him some new clothes at Ross and drove him to the Walmart to cash the check. Maheux said Chris had eight other checks with him at the time.

Using surveillance video from Walmart, police identified the owner of the car as Christopher Hill. Court documents state Hill told police that he would drive white males around town to cash checks for a man named "Rick," who Hill also knew as Tony. Hill said he was paid $200 each day he drove and stated that a total of about $40,000 in checks were cashed.

Hill told police he knew a woman named Jennifer Mullinax who worked for Rick. Mullinax told police that Rick would pay her cash and crack cocaine to rent vehicles for him. She later told police that she knew Rick's identity from a Harris County arrest. She said she looked through bondsman file pictures and located a file on George Deshane Marshall. She told investigators that she picked up Marshall from jail after the arrest and transported him to the bondsman.

Police then discovered that Marshall was an alias for Dante Karyn Sumlar, 34. Sumlar was a fugitive wanted by the US Secret Service in Mobile, Ala. and Jacksonville, Fla.

According to court documents, Mullinax told police that Sumlar paid her up to $500 in cash and $300 worth of crack for renting cars for him until December 2007. She said Sumlar also paid her about $2,000 to answer phones in the check scheme. The forged checks had a toll-free verification number printed on them and Mullinax would answer the line when clerks would call to verify the fake checks, court documents state. She said Sumlar gave her instructions on what to say when clerks would call the number and how to act like a legit business.

In November 2010, Sumlar was located and arrested. He later plead guilty to all federal charges against him. Court documents state Sumlar said he moved to Houston in February 2007 from Alabama and used aliases Tony and Rick while here. Sumlar told authorities he alone printed all of the counterfeit checks and would make up the routing and account numbers. He also said he targeted such businesses as Walmart, Best Buy, Macy's, Toys R Us and Target, according to court documents.

The police investigation revealed 21 counterfeit cashier's checks in the Houston area for a total loss to merchants of $92,500.

Two Charged In $1.7M Wal-Mart Check Scheme

 

CHICAGO (CBS) - Two people are accused of running a check fraud scheme that attempted to bilk Chicago area Wal-Mart and K-Mart stores out of more than $1.7 million.

Audrey Price and Paul Gaiter were each charged with wire fraud Wednesday in a scheme to cash fraudulent checks at Wal-Mart and K-Mart stores, according to criminal complaints filed in U.S. District Court.

Wal-Mart investigators contacted the FBI on Oct. 13, of last year, about people who had been cashing bogus payroll checks, or trying to do so, at the retailer's stores for the year prior. Investigators later discovered that K-Mart stores were also affected.

Wal-Mart and K-Mart stores in the Chicago area will cash a payroll check for a fee - as a currency exchange might do - if the person provides legitimate identification, social security number and the payroll check itself.

Several hundred individuals cashed or attempted to cash fraudulent checks from $650 to $2,000 about 2,500 times, the affidavit said.

An FBI investigation determined Gaiter would recruit people to cash fraudulent checks and would pay them one-third of the check, according to the affidavit. Once the person agreed, Gaiter would call Price and give her the identification of the person so she could make a fraudulent check, the affidavit said.

Gaiter would pick up the fraudulent checks, usually at a McDonald's in Lisle, and either he or a runner would take the person to a Wal-Mart store to cash the checks. Gaiter would give the person one-third of the cash and he and Price would split the rest, the affidavit said.

The FBI used informants to gather information about Gaiter, and arrested him June 14, 2011, the affidavit said. He then provided information about Price to the FBI, including allowing federal agents to record conversations between them.

The Sun-Times Media Wire contributed to this report.

 

Two state lawmakers from Western New York have introduced legislation to increase the penalty for unlicensed check cashing in the state from a misdemeanor to a felony.

The dual bills, sponsored by State Sen. Mark Grisanti, R-Buffalo, and Assemblywoman Crystal Peoples- Stokes, D-Buffalo, would make it a Class E felony for any individual or business to cash checks, drafts or money orders for a fee without first having a state-issued license. It would also impose a fine of $2,500 for each incidence.

Currently, unlicensed check cashing is a Class A misdemeanor.

The proposed bills represent the latest response to an ongoing problem in upstate and especially Western New York, where a 2006 Buffalo News investigation found that a shortage of licensed check cashers had allowed a rash of convenience stores, gas stations, liquor stores and other businesses to cash checks illegally at rates far in excess of what is allowed.

At the time, there was only one licensed entity in the entire eight-county region, but there are now three in Buffalo, with two more seeking licenses in Niagara Falls and Alden.

Under state law, businesses can charge no more than 99 cents to cash a check of any amount in the course of business if they don't have a license from the state Banking Department, while licensed firms can charge no more than 1.86 percent of the face value of a check. The News' report found rates as high as 10 percent were being charged.

"This would raise the stakes of engaging in unlicensed check cashing," said Stephen Altobelli, spokesman for Financial Services Centers of New York, a trade group for licensed check cashers.

By Jonathan D. Epstein

NEWS BUSINESS REPORTER

Why? Mostly because you know upfront exactly how much you'll pay for the services of a check-cashing company, and there's no chance of being on the hook for fees after the transaction is done. A bank account is more complicated, requiring the customer to maintain a certain balance--or at least something more than a negative balance--and there's always a concern about hidden fees hitting you down the line.

In USA Today's story about the roughly 60 million Americans who are "unbanked" (they have no bank accounts) or "underbanked" (they have bank accounts but sometimes use alternatives to cash checks), there are several explanations given for why some folks utilize services that charge them 1% to 3% per $100 to cash a check on the spot. One reason is convenience: Many check-cashing outfits are open 24/7, and so if you work late hours and want cash immediately after leaving the job with paycheck in hand, such a company is waiting for your arrival. Another reason is that a check-cashing operation offers instant cash--and instant gratification. There is generally no period required to wait for a check to clear. Want your money? Here you go, but we'll take a slice of it before you're off on your way.

A third reason surprised me, but I suppose it shouldn't have: Many people, having been burned in the past by monthly fees, overdrafts, and other charges they didn't anticipate, simply distrust banks and prefer the upfront fees of a check-cashing company instead. Why did this surprise me? I guess I've always regarded pawn shops, liquor stores, and other check-cashing storefronts as somewhat sleazy operations; they're generally found in rundown areas of towns, and they seem to prey on people who need money desperately and quickly--so much so that they're willing to hand over 3% or so of their paycheck so that they don't have to wait a few days. But apparently many consumers feel that today's banks take advantage of them in even worse--and sneakier--ways. Per USA Today:

People who use check-cashing stores don't have to worry about hidden fees, says Edward D'Alessio, general counsel for the Financial Service Centers of America, a trade group. "Our industry is more transparent with respect to terms and conditions of products and services than banks have ever been," he says. "When you walk into one of our locations, our costs are all clearly posted."

Yvonne Lopez, 62, of Newhall, Calif., says she started using cash for all her transactions because she was tired of surprise fees. She also believes the banks were responsible for the financial meltdown. "I just don't trust them," she says. "They charge you for everything."

Of course, there are plenty of ways to maintain a bank account and not get hit with fees all the time. But seeing as so many people prefer alternatives partly because they just don't trust banks, the banks out there clearly have some work to do. The consumer with a fresh paycheck in hand knows exactly what he's getting into when he heads to a check-cashing storefront. The relationship isn't quite as transparent at a bank, which is bad news for banks--because people aren't going to give their money to somebody they don't trust.

I am midway through reading Gary Rivlin's new book, Broke, USA. As CNN Money contributor Dan Okrent puts it in his review, Rivlin's book is about the industry of "vulture finance." It exposes large and small financial services companies that prey on financially vulnerable people because they can and because they find it lucrative.

So I was understandably skeptical when I flew out to Miami a few weeks ago to attend the Underbanked Forum, a conference organized by the Center for Financial Services Innovation.

Was I about to jump into a pool infested with loan sharks?

The conference turned out to be quite good. Several presentations and topics were true eye-openers. Here's the bottom line: for the broke, there's still hope for fair financial services that support flexible modern life and encourage financial responsibility.

Not just the fringes of the economy
Who cares? A lot of people should. The FDIC puts the number of under-banked and un-banked households - i.e. people who can't access the kind of credit and banking services that support mainstream life in the U.S. -- at about 30 percent in its December 2009 survey.

Add in younger people who are just starting to build their financial lives but have a world-weary cynicism of big banks. Also add more experienced adults who've been wronged by their banks lately, and there's a potential pool of 100 million people who demand better financial services.

With numbers like that, it's not surprising that a segment of the financial services industry is mobilizing to do a better job of being inclusive, understanding and creative about addressing customers needs without gouging them at every turn.

Too much downside, not enough upside
At the conference, design firm Ideo and non-for-profit D2D Fund reported on their analysis of people banking and non-banking behaviors.

Most striking among their findings: the upside of having a bank account often is perceived as being less than the downside of hidden fees and other practices that filch money. What's the point of hoping to earn roughly one percent interest on a few hundred dollars in your savings account while taking the risk of being hit with a $29 overdraft fee on your checking account?

Speakers highlighted two emerging alternatives to traditional savings accounts that offer a bigger potential upside for people who are starting from scratch:

• Starter savings accounts offered at an eye-popping five percent interest rate from established players such as US Bank and start-ups such as Mango Money.
• A "Save to Win" pilot conducted at a Michigan credit union offered prize drawings, including a grand prize of150,000, for people who saved.

According to the speakers, financial service providers tend to fund these programs out of marketing budgets rather than operational profits. It makes all kinds of sense to channel money directly into the pockets of first-time customers from the TV ad budget spent hawking big banks during Wheel of Fortune.

A nicer kind of access
Rivlin's book says that check-cashing and payday lending outlets have expanded so much in the past few years that they now outnumber McDonald's and Burger Kings combined.

In spite of the poverty industry's survival skills, as mentioned in a recent post by Rivlin, I believe that this trend will start reversing, fortunately.

Here's why. First, a very large percentage of the under-banked are connected and using the Internet several times a week. (Migrant workers not born in the US are the exception.) So creative minds can rapidly deploy new financial services at the very low costs made possible by not having to deploy physical outlets.

Second, the government will mandate that federal benefits be distributed electronically by 2013, avoiding the need for recipients to cash paper checks at a significant cost.

And even in the brick-and-mortar world, companies such as Mango Money are piloting new kinds of stores that are a lot more welcoming than check cashing parlors and less intimidating than bank branches.

Innovation, innovation, innovation
It's the word I heard the most often at the conference. There were plenty of sessions showcasing new ideads in credit, savings and payments. While Twitter's co-founder Jack Dorsey displayed showmanship with the "Square" credit card reader for iPhones and iPads, my pick for most intriguing initiative goes to GoalMine, a company intent on selling investments off of j-hooks at your nearest convenience store. When GoalMine deploys its service, people will be able to buy $50 worth of investment in a mutual fund as easily as they pick a $50 gift card today.

Overall, the good news is that there are many of us who care about serving the un-banked, under-banked and ill-banked. While I did not hear the word "affordability" very often, competitive spirits seemed to be high and will bring more just pricing quickly.

The unbanked and underbanked consumer segments are under increasing scrutiny to understand what they want and need in prepaid card products. In a December 2009 impact note entitled Prepaid Debit Cards: Barriers to Adoption, payments industry advisory Aite Group LLC analyzed why some consumers choose prepaid cards while others do not.

In November and December 2008, Aite surveyed 400 frequenters of eight check cashing stores in urban and rural communities in Virginia. For the purposes of its research, Aite delineated checking account holders (underbanked) from those that lacked checking accounts (unbanked). Aite then segmented respondents into five categories: adopters, rejectors, unreached prospects, purchase intenders and lapsed owners.

This segment represented 30 percent of respondents. Aite found that adopters have embraced prepaid cards; not only do they try them but they reload them as well. According to Judy Fishman, Aite Analyst and co-author of the report, adopters consider themselves technologically savvy and willing to try new things. Consequently, they have incorporated prepaid cards into their lives.

Unlike adopters, rejectors have no interest in prepaid cards; because they make up 43 percent of Aite's research, prepaid providers might take heed regarding why.

"They feel the cards are either a problem or a mystery," Fishman said. "And they know about them. They know they're there. But at this moment in time, they don't have any interest in trying them." Fishman attributed rejectors' reticence to a lack of technological sophistication, as opposed to lack of education. "I think the adopters are more willing to use products that are a little higher up in the hierarchy of complexity," she said.

Fishman advises providers to reach rejectors by conveying to them clearly and concisely the benefits of prepaid cards, such as that they are safer to carry than cash. "And in what ways does it give them an opportunity to participate in channels that are currently not available to them if they rely fully on cash or money orders," she said. Unreached Prospects Seventeen percent of research participants were put in the unreached prospects category. These consumers are unaware of prepaid cards and tend to be both younger (25 and under) and older (over 45) than adopters. They are more involved with technology than rejectors but prefer to pay with cash.

According to Fishman, for the younger unreached prospects, the idea of a prepaid debit card has not sunk in; for the older consumers, debit cards are a newer product and have yet to recognize prepaid cards as a natural extension to them.

The report recommends mass marketing and in-store demonstrations as ways to familiarize unreached prospects with prepaid cards.

The other two categories, purchase intenders (5 percent) and lapsed owners (4 percent) were not analyzed in the report because these groups are small and "appear to be already sensitive to the product [and] would be apt to be caught in a broad category," Fishman said.

She recommends that prepaid card providers continue to reinforce brand and product adoption, as well as the reloading of the cards by adopters.

Additionally, providers should focus on convincing unreached prospects to try prepaid cards by providing them simple and relevant information.