In May, a Needham resident sent a $100 check to his nephew in California, but weeks passed and still the nephew had not received it.
The uncle regularly checked his online checking account in search of the missing check. Finally, on July 11, it showed up as paid by his bank — for $35,743.
And it wasn’t made out to his nephew. It was made out to and cashed by a business in California that specializes in the sale of gold and other coins.
The Needham resident contacted his bank, which said it would cover his loss, according to a Needham police report on the incident. A California man has been charged with identity fraud, attempted larceny, and possession of a counterfeit Massachusetts driver’s license in Dedham District Court.
It was a case of “check washing,” in which, typically, a mailed check is stolen and the name of the recipient and the amount of the check are erased and replaced with another name and (much larger) amount, while the account holder’s signature remains unaltered.
The Treasury Department, the US Postal Service, and local police departments have publicly warned of a recent surge in check-washing, and the American Bankers Association has urged consumers to consider switching to electronic payments.
But what’s so unusual about the Needham case is that police made an arrest. Usually check-washing scammers disappear without a trace. But in this case, a combination of solid police work, the suspect’s own missteps, and good luck led to the arrest of the 33-year-old California man.
The Globe is not revealing the identity of the Needham resident to protect his privacy and to guard against him being targeted by other scammers.
A couple of days after the Needham man’s check showed up online as paid (and his bank assured him it would cover his loss), he received an email from UPS saying, “Update: Package Scheduled for Delivery Tomorrow,” according to the Needham police report. The UPS email said the package was being sent from Liberty Coin in Huntington Beach, Calif., the police report says.
Apparently thinking it might be linked to the recent check-washing incident, he contacted Needham police. The next morning, hours before the package was scheduled to be delivered, a Needham police officer was dispatched to his house in case anyone attempted to take possession of a UPS-delivered package, the police report says.
At the same time, two detectives arrived at the UPS shipping facility in nearby Norwood. At their request, UPS employees located and retrieved a package addressed to the Needham man. As the detectives and a manager discussed the package, a UPS employee interrupted them to say a man “in a white t-shirt had just stepped into the customer service area requesting the package from Liberty Coin,” the police report says.
The detectives questioned the man, who was identified as Gabriel Jaramillo, the police report says. Jaramillo “confirmed that he was here to pick up gold that he purchased,” the report says.
Jaramillo was eventually arrested. After appearing in Dedham District Court on July 20, he was released on $10,000 surety, court records show. He is due back in court in October. Emails to public lawyers assigned to his case were not answered.
During questioning at the UPS facility, Jaramillo was asked how he obtained the check he allegedly used to purchase gold. He told the detectives he drove around a couple of Los Angeles neighborhoods and eventually noticed a house where the residents “might be away because the mailbox was overflowing with mail,” the police report says.
Jaramillo said he “found the check within this mailbox and then washed the check so that he could use it to purchase the gold coins,” the report says.
Jaramillo said he used “fuel injector fluid to wash the check and did it in a dim room because he knows that sunlight can spoil the check during that process,” the report says.
Jaramillo told the detectives that he had provided Liberty Coin with a personal email address when purchasing the coins and that he flew to Boston that morning “with the intention to receive the package” at the Needham address, the report says.
Jaramillo said he was “tracking the package and saw … it was being held at the UPS Norwood facility,” the report says.
A Liberty Coin manager said in an interview that it regularly accepts checks for payment, but only if the shipping address given by the would-be purchaser matches the address on the check. The check used in this case listed the Needham address so it was shipped there.
“There’s a lot of fraud in this industry and [different addresses], that would be a red flag,” said Chris Pasca of Liberty Coin.
Pasca said, after a sale, Liberty Coin regularly updates the purchaser by email with the package’s shipping status.
The big break for law enforcement apparently came when the Needham man received the UPS email alerting him to a scheduled delivery the next day.
But why did he get that email if the purchaser of the gold coins had given Liberty Coin a different email address for shipping updates? He apparently had an existing UPS account that included his home and email addresses, and that when a package was scheduled for delivery to his home address, it automatically triggered an email with a status update, said UPS, adding that it is “working with local law enforcement on the matter.”
Needham Deputy Chief Chris Baker said “it’s pretty unique” for an arrest to be made in a check-washing case.
“Some very good police work went into this,” he said, adding that check-washing is “a big problem everywhere right now.”
Here are some things to know:
— Last year, banks reported 460,000 cases of check fraud, including check-washing, almost double the number the year before, according to the Treasury Department.
— If you are still writing and mailing checks, it might be time to begin paying online. That’s the recommendation of the American Bankers Association. And if you continue to write checks, consider doing so in black indelible ink.
— Understand that you are not liable for a forged or altered check. Banking laws hold banks responsible when they accept such checks. After all, banks are supposed to be able to detect and reject “doctored” checks.
— Regularly review your bank activity and statements for errors. If you overlook an apparently forged or altered check for more than a couple of months your bank may try to disavow responsibility.
— The postal service is working to make mailboxes less susceptible to burglaries by equipping mail slots with “steel teeth” to prevent “fishing” and by taking other measures. But scammers, sometimes working in organized groups, have been known to rob postal workers in search of checks, according to the ABA.
— Mail your checks at the post office lobby mail slot instead of a mailbox for extra protection.
— Drop off mail in mailboxes before the last scheduled pick-up of the day to avoid having it sit in the box overnight.
— Theft of mail also happens at home mailboxes. Don’t advertise there’s outgoing mail in your box by raising the little flag on the box. And don’t let mail pile up while you are away (ask the post office to hold it or arrange for someone to pick it up from your mailbox).