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A Horror Story of Small Business Fraud

By: Tim Berry

 

Blank bank check template. Fake cheque page mockup.

If you’re a business owner, and especially if you’re in the expert business, you should know this small business fraud story. It involves a very sophisticated scheme, including a fraudulent cashier’s check, and a very well-faked charity, that would have fooled me.

This could happen to me or to you

Melinda Emerson, a good friend, tells the story herself in a recent SmallBizChat podcast.

Click on the image for the podcast

That it fooled Melinda is very impressive. She is as knowledgeable and sophisticated about small business ownership as anybody I know. She is a best-selling author of small business advice, and a true small business expert. She’s on the web and in social media as Small Biz Lady.

A fake cashier’s check?

What would you do? You have a cashier’s check that arrived via Fedex overnight. You took it to your bank and the bank cashed it. So you spend a part of it, as agreed with the sender.

A cashier’s check is like cash, right? An automatic assurance? That’s what Melinda thought, and what I thought too. But no.

The bank took the cashier’s check and put the money into Melinda’s account. She’s a longstanding trusted client. And then she unknowingly donated part of it to a fake charity. Why not? After all, a cashier’s check is like cash, right?

A week passed. Then it turned out that the cashier’s check was fraudulent. The bank took that money back. And meanwhile, Melinda’s donation disappeared into a fake charity out of the country. The bank apologized as it docked her account the amount of the cashier’s check. But what Melinda spent as quid pro quo charity donation had already disappeared. So she was plain out of luck. And out of a lot of money too.

They are targeting experts

It’s a very sophisticated small business fraud. It involves people in three countries, a fake cashier’s check, a fake charity, and several websites and related materials, all fake. Melinda of course reported it to the FBI and is now cooperating with an investigation that includes other victims, apparently many of them are experts, like Melinda, who write books, give webinars, post on blogs.

But they could be coming after you next. Expert or not. So be aware.

Published: October 2, 2020
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Source: Tim Berry

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Tim Berry

Tim Berry is co-founder of Have Presence, founder and Chairman of Palo Alto Software, founder of bplans.com, and a co-founder of Borland International. He is author of books and software including LivePlan and Business Plan Pro, The Plan-As-You-Go Business Plan, and Lean Business Planning, published by Motivational Press in 2015. He has a Stanford MBA degree and degrees with honors from the University of Oregon and the University of Notre Dame. He taught starting a business at the University of Oregon for 11 years.

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