$1-Million Check Isn't in the Mail

All it took was a few forged signatures--and possibly a letter opener.

For the last year, the U.S. Postal Inspection Service has been trying to figure out who stole a check for $1,075,408.08, which Los Angeles County issued to the Big Blue Bus in April 2001. Like many big-money checks issued by the county, it was to be sent across town in the mail.

The unknown thief was able to intercept the check, deposit it in a Colorado brokerage account without an endorsement, then withdraw most of the money from the account, according to officials and allegations in court documents.

Postal Inspector Gene Griffin said he is investigating the incident as part of a larger series of check-fraud scams in the Los Angeles area. But he would not give any other details--including when or where he believes the check was snatched.

Meanwhile, attorneys for Santa Monica and the county are trying to recoup the $1 million, plus interest. They have joined a multi-party civil suit in Colorado's Boulder County District Court, where a judge will determine who should be responsible--at least for now--for the loss.

The brokerage firm, Robert W. Baird & Co., has put replacement funds into an account under the control of the court, but it has argued that it shouldn't have to give the money up, said Thomas M. Tyrrell, senior deputy counsel for the county. Tyrrell is confident the money will be returned to L.A. "We're in an extremely strong position," he said.

For some, like Santa Monica Councilman Bob Holbrook, the county's reliance on the mail to move large amounts of money is surprising in the age of electronic banking and increasingly sophisticated mail theft rings.

"I can't believe that someone would just put a million-dollar check in an envelope," said Holbrook, who noted that the city has moved other money around to cover the loss for the time being.

However, public auditors across the country maintain that the U.S. Postal Service still provides a safe and effective way to move large amounts of money. Most county auditors in California still regularly drop large checks in the mail, said Gere Sibbach, president of the state Assn. of County Auditors. The same goes for controller's offices for the state of California and New York City.