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In July
1998 police received a phone tip that Engelen was using
his computer to generate forged American Express "Gift Cheques"
worth hundreds of thousands of dollars and selling them
for 25 cents on the dollar.
Years
ago the Portland Police Bureau fraud unit was so overwhelmed
that it considered drafting a policy to investigate no scam
involving less than $20,000. The idea was not approved by
Chief Charles Moose.
Jay
Dilworth (above) described himself at various times as repo
man, self-employed mechanic and laborer. Police suspect
he was one of Washington County's biggest dope peddlers.
Between 1990 and 1995 he was busted several times, mainly
for dealing or possessing cocaine, marijuana, heroin, methamphetamine
and LSD.
Scamming
is a crime without borders, and detectives often blow wads
of time on scammers only to find neighboring jurisdictions
conducting redundant efforts on the same crook. Detectives
say a regional fraud
task force is desperately needed, so they can share information.
Ron
Engelen's mailing address is SID #12902957, Two Rivers Correctional
Institution, 82911 Beach Access Road, Umatilla, OR 97882.
Since
coming to town, police Chief Mark Kroeker has doubled Portland's
fraud team from 4 to 8 detectives. The unit, which handles
more than 20,000 cases a year, has requested two more.
Ironically,
although consumers are advised to run credit checks on themselves
to ensure they have not been hit by
identity thieves, they may be penalized for
protecting themselves. Credit bureaus consider too many
credit checks to be a
bad sign, potentially signifying
a credit risk.
Engelen
says he gave up fraud and computers after the November 1998
raid, but after he was again busted last July his new roommate,
a convicted sex offender, alleged that Engelen had him cash
a fraudulent $6,200 Bank of America check.
The
Lukins (above) learned, the hard way, that companies such
as the travel broker they used have no legal obligation
to keep clients' information private. The couple says it
contacted five lawyers in hopes of taking the broker to
court. Says Betty, "They all said we have no case."
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Sidebar:
Protect Yourself
At 8 am on Nov. 5, 1998, outside a beige
bungalow on a quiet residential street a block from Aloha's
main fast-food strip, three words rang out--"Police! Search
warrant!"--and a team of 17 cops, both uniformed and plainclothes,
swarmed through the door.
Inside, officers cuffed Jay Dilworth and Ron Engelen as
the two men blinked sleep from their eyes. Then the cops
blinked, too. In plain view in Dilworth's bedroom, strewn
beneath his ceiling-mounted sex harness, not far from his
rack of handcuffs and assorted S&M implements, were
several baggies of green marijuana buds, a large bong, 15
baggies of white crystalline methamphetamine, or crank--and
102 vials of a clear liquid, the synthetic drug called GHB.
But on Engelen's side of the house, the Washington County
warrant team found something it deemed more interesting:
a sophisticated computer system with Zip drives, a scanner,
color printer, digital camera and paper shredder--in short,
a treasure trove of paraphernalia associated with the nation's
hottest brand of lawbreaking.
Engelen and Dilworth represent a glitch in the graphs.
FBI stats released two weeks ago showed crime going down
everywhere, while fraud is going up. The headlines were
not news to cops in Washington County, where fraud has quadrupled
in the past five years; nor in Portland, where the value
of counterfeit-check ripoffs doubled from $1 million to
$2 million from 1997 to 1998 alone.
Engelen, Dilworth and their dozens of Washington County
associates are a case study in the ilk doing the most damage.
They are everywhere, and they find it easy to operate at
a simple, low-tech level. For them, fraud is more than a
living; it's about competing to outsmart the system in the
grandest way, or, as Engelen puts it, scoring "the biggest
hoo-rah."
"They were into scamming people," says one female acquaintance.
"It was kind of their lifestyle."
Although police busted Dilworth for possession of a controlled
substance, Engelen wasn't arrested. Retired Det. Larry Moylett,
who headed the raid, explains: Police had so many leads
that they wanted to expand the case.
***
Along the Sunset Highway heading west from Portland, tucked
among the new complexes of rowhouses and interchangeable
subdevelopments are vestiges of the old Washington County--farms,
shotgun shacks, rundown motels. Living next door to the
white-collar workers of Nike and Intel are members of the
criminal underworld. It's a subculture where people know
each other by first names, nicknames or fake names, and
sometimes just by reputation.
This was the world of Dilworth and Engelen, one dominated
by sex, drugs and deceit. In recent years, with the advent
of the Internet, the media have made much of the newfangled
crime of "identity theft." It's a glossy name for an old
scam: counterfeiting, forgery and fraud using someone else's
financial information. Despite its high-tech cachet, the
typical reality of scamming is hardly glamorous. Sure, somewhere
out there, some 14-year-old computer geek may be snagging
your MasterCard number off the Sextoys.com online shopping
site. But, in most cases, the key to unlocking your identify--and
finances--is no farther than your untended mailbox or trash
can.
Computer disks bearing templates for fake IDs are passed
from thief to thief. They're slipped into computers hooked
up to new high-quality color printers to spit out counterfeit
driver's licenses, car titles or traveler's checks. What
once would have taken a skilled craftsman hours to produce
can now be churned out in minutes by even the most hopped-up
meth fiend.
Don't believe it? Stroll into Office Depot and buy the
VersaCheck program; for $49.99, it holds your hand every
step of the way as you print your own--or someone else's--checks.
It even includes authentic stock paper.
Advances in computer technology have coincided with another
trend: Police say 90 percent of their fraud cases involve
methamphetamine. Why crank? The high may be conducive to
forging, says Engelen, who should know: "People are spun,
and they're up all night and they've got nothing to do,
so they hit mailboxes. Then they sit in front of their computers
in the dark for three and a half days, trying to be van
Gogh."
Ron Engelen, a technical wiz, says he met Dilworth in 1998
while selling him a computer. The two hit it off and soon
went four-wheeling in Dilworth's Jeep, Engelen recalls:
"We drove off cliffs; we almost died."
Little is known of Dilworth, but according to Angela Marie
Lee, a former acquaintance, his Washington County childhood
was not easy: He was born with three fingers missing from
his right hand, his mother committed suicide when he was
8, and his father died soon thereafter.
Engelen, in contrast, grew up wealthy in Marin County,
Calif., attended private schools to the age of 16, then
got bored and dropped out. Many jobs later, he found himself
in Portland, age 35, making better than $50,000 a year at
a commercial collections agency and building computers on
the side. After showing up to work high on crank, he got
fired and went into computers full time. His customers?
The Washington County fraudsters.
In mid-1998, Dilworth invited Engelen to move into his
rental house on Northwest Alexander Street in Aloha. The
two were quite a pair. They installed two brass poles in
their living room, and Dilworth set himself up as a photographer,
taking promo shots of young women hoping to land jobs in
local strip clubs. Engelen, meanwhile, would videotape them
as they danced and then sell them the tapes, along with
CDs of songs to strip by, which he compiled from his huge
stash of songs pirated off the Internet.
It was a frat boy's dream. Every night their two living
room couches were filled with young women who were paying
them to watch them take off their clothes. Engelen
calls it the "greatest nookie" of his life.
Engelen says they also supplied strippers to selected clubs,
bachelor parties and private hotel-room bashes. Last year
Portland police arrested Engelen after a hooker told them
he was her pimp and wanted her to steal johns' credit cards
to boot. Charges were dropped when she wouldn't testify,
and Engelen denies the allegations. But his story isn't
helped by the slogan on his business card: "The pimp with
the biggest hat."
***
When the cops burst through Engelen and Dilworth's door
in November 1998, it wasn't signs of sex they were looking
for--it was American Express. Counterfeit AmEx "Gift Cheques"
had been showing up in stores around the county; the cops
had received tips that Engelen was behind it.
They didn't find any in Engelen's stuff, but they found
plenty of evidence of other fraud: computer templates for
driver's licenses from Oregon, Washington, British Columbia,
Puerto Rico and the U.S. State Department, Social Security
cards, State Farm auto insurance cards, INS green cards
and Oregon contractor registration certificates. There were
checks imprinted with valid account numbers but bearing
fictional names also found on fake IDs. There were multicolored
forgeries of tickets for a metal concert in Salem, as well
as eight cell phones, including at least one set up on a
fraudulent account.
There were forgeries of the forms used to get cars out
of impound lots. It didn't even have to be your car
you were retrieving--there were counterfeit car titles,
too. In a dazzling display of criminal bravado, there were
even forgeries of Washington County jail checks--bearing
the account number used to reimburse departing inmates for
money seized upon arrest--made out to names matching false
IDs.
Based on this evidence, Det. Moylett says he tried to get
local prosecutors involved, but he found them overloaded.
The response was, "Get back to me when you've got it all
wrapped up," Moylett says. "They want something quick and
to the point and that they don't have to spend a lot of
time on."
***
In February 1999, Moylett handed off the job of investigating
the county's fraud to Det. Shawn Fischer, a former volunteer
youth minister and prison guard. For Fischer, the true extent
of Engelen's activities began emerging by chance on New
Year's Day 1999, when a sheriff's deputy pulled over a man
named Luke Jensen with a bag of stolen mail in the back
seat.
Fischer caught a glimpse of Jensen in the booking room
and recognized him from a security video from the Beaverton
Target store, which had received a rash of bad checks. Fischer
got a search warrant on Jensen's home that turned up forged
and counterfeit material. That led to another search warrant
on one of Jensen's buddies, turning up more material; that,
in turn, led to nine more searches in the next eight months.
It seemed that at every raid, the same name came up. "They
all talked about Engelen," Fischer recalls. "They called
him 'Fat Man.'"
As time passed, a picture emerged of a brazen, resourceful
and lucrative criminal enterprise. During one raid, police
seized computers, forgery materials and stolen mail, only
to return 11 days later and find the scammers up and running
again, using equipment and pirated software set up by Engelen,
according to police reports.
The potential profits, Fischer realized, were huge: One
snitch relayed a scammer's boast of taking in $250,000 a
year. It was a business focused on trash and mail. Suspects
told Fischer they had a set of keys that would open blue
postal drop boxes; in one apartment raid, police looked
under a cloth to find the scammers' coffee table was a stolen
apartment mailbox.
Last September, Fischer was ready. He and several colleagues
each grabbed an armful of his black evidence binders,
charts and timelines and lugged them over to the sheriff's
conference room. There, he made a presentation to prosecutors
and about two dozen members of other law enforcement agencies,
including the U.S. Postal Service. He argued that Washington
County was home not just to a number of individual scammers
but to an organized ring dedicated to forgery, counterfeiting
and other frauds.
On the wall were Fischer's charts, showing an interlocking
web of crimes, connections and cross-cutting evidence, illustrating
how the ring worked. Stolen financial information, for example,
would be hooked up to a fake ID and used to produce a counterfeit
check that was used to buy computers, which then made more
checks and IDs. In the periphery of the ring were about
50 people; in the center were Engelen and about eight others.
In the span of a year, Fischer had evidence of more than
$1 million ripped off from banks, credit card companies,
cell-phone companies, retail stores and individuals.
Fischer's aim was to prove a violation of racketeering
laws used to take down organized crime rings. This would
let him bust crooks en masse, with greater penalties than
forgery and counterfeiting carried. Despite his presentation,
however, no prosecutor stepped forward to take the case.
***
At its heart, police say, the problem with fraud is that
it's become so common that cops can only investigate a fraction
of the cases. Even fewer are prosecuted, because fraud cases
can be complex and time-consuming, and some prosecutors
are hesitant to take them. Meanwhile, in the name of customer
service, businesses are reluctant to set up safeguards.
"Wells Fargo and US Bank will cash a check for under $100
in the drive-through," says Engelen. "So you get all these
tweakers going through the drive-through all day long, [passing
forged checks for] $80 or less. These are misdemeanors,
and the county doesn't even prosecute these people."
Last year, in response to the problem, the Legislature
finally passed a tougher identity-theft law that made second-time
offenders subject to a minimum 13 months in jail--but detectives
grumble that it takes four misdemeanors altogether, a steep
hurdle, to trigger it.
That's why Fischer pursued racketeering, only to run into
the obstacle that prosecutors consider the Washington County
scammers too disorganized to be presented to a jury as an
organized crime ring. Engelen agrees: "These clucks say
they'll be there in one hour," he chuckles, "and they come
by two days later."
Unable to get prosecutors to pursue a racketeering case,
a dejected Fischer handed several cases over to the U.S.
Postal Service, which had the luxury of federal mail-theft
laws that are easier to enforce, and resigned himself to
the arduous task of taking down the rest of the local scammers
one by one.
To this day, having spent the bulk of one year on what
he considers a single case, and still waiting on analysis
of some of Engelen's computers, Fischer has busted no members
of the ring. It's an ironic result for an investigation
that last summer was recognized for its excellence by the
Oregon State Sheriff's Association. His coworkers "joke
about it," he says without humor. "I won an award, and I
haven't made any arrests."
***
Today, dressed in prison blue, Engelen, at 6-foot-4 and
300 pounds, presents a hulking figure inside the razor-wire
and fortress-like walls of Two Rivers Correctional Institute,
a brand-new prison near the glorified desert crossroads
called Umatilla, Ore.
Fischer did not put Engelen there, and that, for some cops,
is the moral of the story: Scammers rarely get busted for
scamming. They get busted when they dabble in lowbrow crimes--or
just get sloppy.
Washington County cops nailed one scammer-affiliated burglar
when, after a five-day crank binge, he fell asleep in his
target's garage. Another burglar, trying to be clever, switched
plates on the car he stole--but got busted because his new
plates came from a different stolen car. Washington County
detectives fondly recall the time a female scammer called
911 about a domestic dispute that erupted over a sordid
love triangle: When police arrived, they found evidence
of fraud all over the motel room and took the quarreling
trio into custody.
Engelen wasn't that stupid, but he did slip up. On July
7, 1999, alerted to a home invasion robbery, the Beaverton
Police Department arrested 34-year-old Andrew Hanna. He
confessed, saying that Engelen directed him to rob a dope
dealer who'd come into some money, then served as the getaway
driver.
Engelen, who maintains that Hanna lied, was arrested. "Engelen
screwed up," says Beaverton Det. Stu Reynolds. "He normally
didn't do robberies."
Engelen's fate shows how the system treats violent criminals
differently than fraudsters. Engelen never spent a day behind
bars for his scamming, even though a veritable chorus of
snitches had told Fischer of Fat Man's alleged antics. Once
robbery was involved, however, Engelen promptly faced hard
time, based on the sketchy word of a single self-admitted
crook.
In September, as Engelen awaited trial, it was his former
roommate Dilworth's turn to fall. His Waterloo came at the
Phoenix Inn, near Highway 26 in Cedar Mill.
Scammers like to rent hotel rooms for days at a time, using
them as bases of operations and places to party. But after
Dilworth had been staying there for a few days, his female
companion accidentally dropped a stack of blank payroll
checks in plain view of the already-suspicious staff. A
manager alerted Det. Larry Smith, who led a stakeout and
bust.
The evidence Smith seized shows how scamming technology
spreads: from technically proficient people like Engelen
to dopers like Dilworth. Within the room Smith found not
only marijuana, LSD, mushrooms, cocaine, crank and a .380-caliber
blue-metal handgun, but also a laptop, printer, digital
camera and computer disks marked with different fake ID
templates, with labels bearing Dilworth's logo, "Coruption
[sic] Inc." scrawled in felt-tip marker. Dilworth was busted
on charges of drug possession with intent to deal; he was
booked and released, and began awaiting trial.
Meanwhile, Engelen, out on bail, had a final scam up his
sleeve. He heard through the grapevine that his ex-girlfriend
would be subpoenaed to testify against him regarding his
alleged criminal activities. They agreed to marry, so she
"could not testify," he says. So Dilworth, who had a mail-order
minister's certificate, married the two in a friend's kitchen,
and they held a reception at the Boom Boom Room, a Portland
strip club.
It turned out prosecutors didn't need her, and when they
threatened Engelen with a Measure 11 sentence of 12 years,
he folded and copped a plea. In January he was sentenced
to four years.
Dilworth's end came April 19, a month before his scheduled
drug trial, at a rundown little house in Cedar Mill that
sits like a pariah among affluent homes with three-car garages
and custom-made waterfalls. After a night of partying and
loud music, Dilworth was found dead of a bullet that came
from his own gun. Police are calling it an accidental shooting.
Protect
Yourself
The more he runs into Washington County's band of identity
thieves,
the more paranoid Det. Larry Smith gets. He bought a shredder
for his home and keeps all his spare checks in a safe.
Police and crooks interviewed have a number of suggestions
like Smith's. Some are common sense, but others are less
obvious:
*Don't trust that your garbage or your recycling
is safe. Shred or burn everything. A middle-of-the-road
confetti-cut shredder runs $80 at Office Depot.
*Don't let mail lie in or outside your mailbox for any
length of time. Get a P.O. box.
*"Community" mailboxes for apartment complexes, though
locked, are easy prey.
*Do as much of your banking as possible in person, at the
bank.
*Don't give out financial information to strangers.
*If you order a new credit card, make special arrangements
for picking it up.
*Scrutinize your bank statements and credit card bills;
check your credit reports regularly.
Cops and crooks agree that consumer carelessness is only
part of the problem. Another part is credit card companies
that send you unrequested cards, "courtesy checks" and "gift
checks," don't double-check address changes, and make it
ridiculously easy to activate new cards. Other problems
are caused by stores such as Fred Meyer that take checks
without asking for ID every time.
Fraud detectives complain that banks resist taking basic
steps to make fraud more difficult, for fear that too many
hassles will drive away customers.
For months, Betty Lukins' daily trip to the mailbox drove
her to the point of tears. "I would walk in from the mailbox
with 10, 12 letters in my hand to deal with," she recalls.
"Some days you just couldn't handle it--but you knew you
had to."
The letters, arriving at her Cedar Mill address, came from
bill collectors and credit bureaus; Lukins and her husband,
Donald, were among the score of local victims of a string
of home burglaries that occurred while the occupants were
on vacation in Hawaii.
It was an ingenious crime: scammers acquired hundreds of
travel itineraries from a Tigard travel broker called All
About Travel--possibly from a dumpster, a recycling bin
or an employee. When police finally busted burglar Kenny
Hathaway, they found the burglars had used phone books to
discover the travelers' addresses, then highlighted them
in a Thomas Bros. map book. The burglars had a schedule
that extended months into the future.
The entire Lukins home was cleaned out--including their
shredder--costing them at least $25,000 in uninsured possessions.
And their torment continued for months afterward. Though
they promptly closed their account, their stolen checks
had spread through the Washington County crime community
and were used to rack up thousands of dollars' worth of
purchases, usually at computer stores. Donald's name started
turning up on IDs seized by Washington County deputies,
suggesting credit-based scams were on the way. Like many
of their fellow victims of the "Hawaiian burglars," they've
had countless hassles with collection agencies and have
to check their credit rating frequently. "We've been told
never to relax," says Betty.
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