Our break came on March 21, 1971, when the first passer

was arrested at Denver.

Although he refused to name his co

conspirators, a major lead was developed when we uncovered the name of a St. Paul publishing firm listed in the passer's address book. A discreet background investigation established that the firm was owned by Melvin L. Wilson, a prime suspect in a Las Vegas counterfeiting operation dating back to 1965.

Wilson was located and placed under 24-hour surveillance. Although his infrequent visits to his small print shop indicated the first was not engaged in the usual business trade, no information could be developed which would link him to the counterfeiting venture.

made his first false move. He left his motel and drove to a suburban bowling alley. He departed within minutes and drove almost 250 miles to the suburbs of Madison, Wisconsin, where he passed three counterfeit notes. He was arrested by surveilling agents as he left his motel the following day. The plant was seized in St. Paul and a large quantity of counterfeit notes was recovered from a rental locker in the bowling alley Wilson had

visited.

Losses to the public from Wilson's operation totaled $20, 440. Over $220 thousand was seized before being placed in circulation.

Wilson later entered a guilty plea. However, he failed

to appear for sentencing and is now a fugitive.

Forgery of Government Checks

Forged check investigations received during fiscal year

1971 totaled 66, 004 as compared with 62, 094 received in fiscal year 1970. This represents a 6% increase.

During the first

six months of the current fiscal year, 38, 127 check investigations were received, compared with 29, 902 during the same period last year, or a 28% increase. This increase, however, reflects several large bulk thefts from post offices and other government agencies involving several thousand government checks. Consequently, it is not anticipated that this rate of increase will continue for the remainder of the fiscal year.

With your permission, Mr. Chairman, I would like to insert in the record a chart showing the number of check cases received for the fiscal years 1967 through 1973. (Chart D)

80,000

70,000

UNITED STATES SECRET SERVICE

NUMBER OF FORGED CHECK CASES
RECEIVED FOR INVESTIGATION

FISCAL YEARS 1967-1973

CHART D

EST (73,000)

EST
(69,500)

As a result of the increased number of check investigations received by this Service, we initiated the check squad system in a number of our metropolitan area offices. Through this concentrated utilization of manpower, we closed 38,080 cases during the first six months of this fiscal year compared with 22,491 in the same period last year. This 69% increase is highly significant, particularly since it was accompanied by a in arrests during

25% increase

from 1,315 to 1, 648

this same period.

We will continue to concentrate our check investigation effort in these priority areas during the coming year and, at the conclusion of the current campaign year, we will divert substantial additional manpower to the reduction of check investigation backlogs. To give you some insight into the problem of multiple check forgeries, I would like to recite to you several typical cases.

Check Case No. 1

Charles Middleton, owner of the C. C. Supermarket in New York City, received stolen U. S. Treasury checks from unnamed postal employees in the city and deposited these checks to ficticious accounts at various New York City banks.

A bank employee became suspicious when a large number of the checks were returned as forgeries, and correspondence from the bank to the account, "Night and Day Supermarket, ' was returned as non-deliverable. Surveillance was established

at the bank and an accomplice of Middleton was arrested on April 30, 1970, while attempting to make a cash withdrawal. The accomplice was questioned and admitted she had forged some of these checks but the bulk of them were signed when she received them from Middleton.

Both

S.

A voluntary search was conducted at her apartment where U. S. Treasury checks, some of which were signed, and U. Savings Bonds were located. During this search, Charles Middleton entered the apartment and was also arrested. persons were arraigned the same day before the U. S. Commissioner, Southern District of New York, and were released on $2,000 bail.

Middleton continued his check operation after the above

arrest using the same method of operation and was, subsequently, arrested on July 24, 1970, and March 24, 1971, on the same charges. Both Middleton and the accomplice pleaded guilty to forgery and uttering of U. S. Treasury checks on January 29, 1971. On June 4, 1971, Middleton pleaded guilty to all charges and was sentenced to four years in prison. His codefendant is awaiting sentence.

To date, 365 U. S. Treasury checks have been associated in this case with an approximate value of $75,000 dating back to March 1970. It is estimated that a similar amount of New York City welfare and commercial checks were also involved. Our

investigation is continuing into the source of the checks to Middleton.