The Moneychangers

by Arthur Hailey

  The councilman put on his banker’s hat and reminded the police chief of his personal application to First Mercantile American Bank for a home mortgage loan which would make it possible to bring Wainwright’s wife and family to the town. Mr. Rosselli, the branch manager added somewhat needlessly, was president of FMA.

  Nolan Wainwright said he could see no relationship between a loan application and a traffic summons.

  In due course Mr. Rosselli, for whom counsel appeared in court, was fined heavily for reckless driving and awarded three demerit points, to be recorded on his license. He was exceedingly angry.

  Also in due course the mortgage application of Nolan Wainwright was turned down by First Mercantile American Bank.

  Less than a week later Wainwright presented himself in Rosselli’s office on the 36th floor of FMA Headquarters Tower, taking advantage of the accessibility on which the bank president prided himself.

  When he learned who his visitor was, Ben Rosselli was surprised that he was black. No one had mentioned that. Not that it made any difference to the banker’s still simmering wrath at the ignominious notation on his driving record—the first of a lifetime.

  Wainwright spoke coolly. To his credit, Ben Rosselli had known nothing of the police chief’s mortgage loan application or its rejection; such matters were conducted at a lower level than his own. But he smelled the odor of injustice and sent, there and then, for the loan file which he reviewed while Nolan Wainwright waited.

  “As a matter of interest,” Ben Rosselli said when he had finished reading, “if we don’t make this loan what do you intend to do?”

  Wainwright’s answer now was cold. “Fight. I’ll hire a lawyer and we’ll go to the Civil Rights Commission for a start. If we don’t succeed there, whatever else can be done to cause you trouble, that I’ll do.”

  It was obvious he meant it and the banker snapped, “I don’t respond to threats.”

  “I’m not making threats. You asked me a question and I answered it.”

  Ben Rosselli hesitated, then scribbled a signature in the file. He said, unsmiling, “The application is approved.”

  Before Wainwright left, the banker asked him, “What happens now if I get caught speeding in your town?”

  “We’ll throw the book at you. If it’s another reckless driving charge, you’ll probably be in jail.”

  Watching the policeman go, Ben Rosselli had the thought, which he would confide to Wainwright years later: You self-righteous s.o.b.! One day I’ll get you.

  He never had—in that sense. But in another, he did.

  Two years later when the bank was seeking a top security executive who would be—as the head of Personnel expressed it—”tenaciously strong and totally incorruptible,” Ben Rosselli stated, “I know of such a man.”

  Soon after, an offer was made to Nolan Wainwright, a contract signed, and Wainwright came to work for FMA.

  From then on, Ben Rosselli and Wainwright had never clashed. The new head of Security did his job efficiently and added to his understanding of it by taking night school courses in banking theory. Rosselli, for his part, never asked Wainwright to breach his rigid code of ethics and the banker got his speeding tickets fixed elsewhere rather than through Security, believing Wainwright never knew, though usually he did. All the while the friendship between the two grew until, after the death of Ben Rosselli’s wife, Wainwright frequently would eat dinner with the old man and afterwards they would play chess into the night.

  In a way it had been a consolation for Wainwright, too, for his own marriage had ended in divorce soon after he went to work for FMA. His new responsibilities, and the sessions with old Ben, helped fill the gap.

  They talked at such times about personal beliefs, influencing each other in ways they realized and in others of which neither was aware. And it was Wainwright—though only the two of them ever knew it—who helped persuade the bank president to employ his personal prestige and FMA’s money in helping the Forum East development in that neglected city area where Wainwright had been born and spent his adolescent years.

  Thus, like many others in the bank, Nolan Wainwright had his private memories of Ben Rosselli and his private sorrow.

  Today, his mood of depression had persisted, and after a morning during which he had stayed mostly at his desk, avoiding people whom he did not need to see, Wainwright left for lunch alone. He went to a small cafe on the other side of town which he favored sometimes when he wanted to feel briefly free from FMA and its affairs. He returned in time to keep an appointment with Vandervoort.

  The locale of their meeting was the bank’s Keycharge credit-card division, housed in the Headquarters Tower.

  The Keycharge bank card system had been pioneered by First Mercantile American and now was operated jointly with a strong group of other banks in the U.S., Canada, and overseas. In size, Keycharge ranked immediately after BankAmericard and MasterCharge. Alex Vandervoort, within FMA, had over-all responsibility for the division.

  Vandervoort was early and, when Nolan Wainwright arrived, was already in the Keycharge authorization center watching operations. The bank security chief joined him.

  “I always like to see this,” Alex said. “Best free show in town.”

  In a large, auditorium-like room, dimly lighted and with acoustic walls and ceilings to deaden sound, some fifty operators—predominantly women—were seated at a battery of consoles. Each console comprised a cathode ray tube, similar to a TV screen, with a keyboard beneath.

  It was here that Keycharge cardholders were given or refused credit.

  When a Keycharge card was presented anywhere in payment for goods or services, the place of business could accept the card without question if the amount involved was below an agreed floor limit. The limit varied, but was usually between twenty-five and fifty dollars. For a larger purchase, authorization was needed, though it took only seconds to obtain.

  Calls poured into the authorization center twenty-four hours a day, seven days a week. They came from every U.S. state and Canadian province, while a row of chattering Telex machines brought queries from thirty foreign countries including some in the Russian-Communist orbit. Whereas builders of the British Empire once cheered proudly for the “red, white, and blue,” creators of the Keycharge economic empire rooted with equal fervor for the “blue, green, and gold”—international colors of the Keycharge card.

  The approval procedures moved at jet speed.

  Wherever they were, merchants and others dialed directly through WATS lines to the Keycharge nerve center in FMA Headquarters Tower. Automatically, each call was routed to a free operator whose first words were, “What is your merchant number?”

  As the answer was given, the operator typed the figures, which appeared simultaneously on the cathode ray screen. Next was the card number and amount of credit being sought, this too typed and displayed.

  The operator pressed a key, feeding the information to a computer which instantly signaled “ACCEPTED” or “DECLINED.” The first meant that credit was good and the purchase approved, the second that the cardholder was delinquent and credit had been cut off. Since credit rules were lenient, with banks in the system wanting to lend money, acceptances by far outnumbered turndowns. The operator informed the merchant, the computer meanwhile recording the transaction. On a normal day fifteen thousand calls came in.

  Both Alex Vandervoort and Nolan Wainwright had accepted headsets so they could listen to exchanges between callers and operators.

  The security chief touched Alex’s arm and pointed, then changed headset plugs for both of them. The console Wainwright indicated was carrying a flashing message from the computer—”STOLEN CARD.”

  The operator, speaking calmly and as trained, answered, “The card presented to you has been reported as stolen. If possible, detain the person presenting it and call your local police. Retain the card. Keycharge will pay you thirty dollars reward for its return.”

  They could hear a whispered colloquy, then
a voice announced, “The bastard just ran out of my store. But I grabbed the mother’s plastic. I’ll mail it in.”

  The storekeeper sounded pleased at the prospect of an easy thirty dollars. For the Keycharge system it was also a good deal since the card, left in circulation, could have been used fraudulently for a much greater total amount.

  Wainwright removed his headset; so did Alex Vandervoort. “It works well,” Wainwright said, “when we get the information and can program the computer. Unfortunately most of the defrauding happens before a missing card’s reported.”

  “But we still get a warning of excessive purchasing?”

  “Right. Ten purchases in a day and the computer alerts us.”

  Few cardholders, as both men were aware, ever made more than six or eight purchases during a single day. Thus a card could be listed as “PROBABLY FRAUDULENT” even though the true owner might be unaware of its loss.

  Despite all warning systems, however, a lost or stolen Keycharge card, if used cagily, was still good for twenty thousand dollars’ worth of fraudulent purchasing in the week or so during which most stolen cards stayed unreported. Airline tickets for long-distance flights were favorite buys by credit-card thieves; so were cases of liquor. Both were then resold at bargain prices. Another ploy was to rent a car—preferably an expensive one—using a stolen or counterfeit credit card. The car was driven to another city where it received new license plates and forged registration papers, and was then sold or exported. The rental agency never saw car or customer again. One more gimmick was to buy jewelry in Europe on a fraudulent credit card backed up by a forged passport, then smuggle the jewelry into the U.S. for resale. In all such instances the credit-card company bore the eventual loss.

  As both Vandervoort and Wainwright knew, there were devices used by criminals to decide whether a credit card in their possession could be used again, or if it was “hot.” A favorite was to pay a head-waiter twenty-five dollars to check a card out. He could get the answer easily by consulting a weekly confidential “warning list” issued by the credit-card company to merchants and restaurants. If the card was unreported as hot, it was used for a further round of buying.

  “We’ve been losing a helluva lot of money through fraud lately,” Nolan Wainwright said. “Much more than usual. It’s one of the reasons I wanted to talk.”

  They moved into a Keycharge security office which Wainwright had arranged to use this afternoon. He closed the door. The two men were much in contrast physically—Vandervoort, fair, chunky, non-athletic, with a touch of flab; Wainwright, black, tall, trim, hard, and muscular. Their personalities differed, too, though their relationship was good.

  “This is a contest without a prize,” Nolan Wainwright told the executive vice-president. He placed on the office desk eight plastic Keycharge credit cards, snapping them down like a poker dealer, one by one.

  “Four of those credit cards are counterfeit,” the security chief announced. “Can you separate the good ones from the bad?”

  “Certainly. It’s easy. The counterfeits always use different typefaces for embossing the cardholder’s name and …” Vandervoort stopped, peering down at the group of cards. “By God! These don’t. The typeface is the same on every card.”

  “Almost the same. If you know what to look for, you can detect slight divergences with a magnifier.” Wainwright produced one. Dividing the cards into two groups, he pointed to variations between the embossing on the four genuine cards and the others.

  Vandervoort said, “I see the difference, though I wouldn’t have without the glass. How do the counterfeits look under ultraviolet?”

  “Exactly the same as real ones.”

  “That’s bad.”

  Several months earlier, following an example set by American Express, a hidden insignia had been imprinted on the face of all authentic Keycharge credit cards. It became visible only under ultraviolet light. The intention was to provide a quick, simple check of any card’s genuineness. Now that safeguard, too, had been outflanked.

  ‘It’s bad, all right,” Nolan Wainwright agreed. “And these are only samples. I’ve four dozen more, intercepted after they’d been used successfully in retail outlets, restaurants, for airline tickets, liquor, other things. And all of them are the best counterfeits which have ever shown up.”

  “Arrests?”

  “None so far. When people sense a phony card is being queried they walk out of a store, away from an airline counter, or whatever, just as happened a few minutes ago.” He motioned toward the authorization room. “Besides, even when we do arrest some users it doesn’t follow we’ll be near the source of the cards; usually they’re sold and resold carefully enough to cover a trail.”

  Alex Vandervoort picked up one of the fraudulent blue, green, and gold cards and turned it over. “The plastic seems an exact match too.”

  “They’re made from authentic plastic blanks that are stolen. They have to be, to be that good.” The security chief went on, “We think we’ve traced the source of the cards themselves. Four months ago one of our suppliers had a break-in. The thieves got into the strong room where finished plastic sheets are stored. Three hundred sheets were missing.”

  Vandervoort whistled softly. A single plastic sheet would produce sixty-six Keycharge credit cards. That meant, potentially, almost twenty thousand fraudulent cards.

  Wainwright said, “I did the arithmetic too.” He motioned to the counterfeits on the desk. “This is the tip of an iceberg. Okay, so the phony cards we know about, or think we do, can mean ten million dollars’ loss in charges before we pull them out of circulation. But what about others we haven’t heard of yet? There could be ten times as many more.”

  “I get the picture.”

  Alex Vandervoort paced the small office as his thoughts took shape.

  He reflected: Ever since bank credit cards were introduced, all banks issuing them had been plagued by heavy loss through fraud. At first, entire mailbags of cards were stolen, their contents used for spending sprees by thieves—at bank expense. Some mail shipments were hijacked and held for ransom. Banks paid the ransom money, knowing the cost would be far greater if cards were distributed through the underworld, and used. Ironically, in 1974 Pan American Airways was castigated by press and public after admitting it paid money to criminals for the return of large quantities of stolen ticket blanks. The airline’s objective was to avoid enormous losses through misuse of the tickets. Yet unknown to Pan Am’s critics, some of the nation’s biggest banks had quietly been doing the same thing for years.

  Eventually, mail theft of credit cards was reduced, but by then criminals had moved on to other, more ingenious schemes. Counterfeiting was one. The early counterfeit cards were crude and easily recognizable, but quality improved until now—as Wainwright had shown—it took an expert to detect the difference.

  As fast as any credit card security measure was devised, criminal cleverness would circumvent it or attack a vulnerability elsewhere. As an example, a new type credit card now being marketed used a “scrambled” photograph of the cardholder. To ordinary eyes the photo was an indistinguishable blur, but placed in a descrambling device it could be viewed clearly and the cardholder indentified. At the moment the scheme looked promising, but Alex had not the least doubt that organized crime would soon find a way to duplicate the scrambled photos.

  Periodically, arrests and convictions of those using stolen or bogus credit cards were made, but these represented a small portion only of the total traffic. The main problem, so far as banks were concerned, was a lack of investigative and enforcement people. There simply were not enough.

  Alex ceased his pacing.

  “These latest counterfeits,” he queried, “is it likely that there’s some kind of ring behind them?”

  “It’s not only likely, it’s a certainty. For the end product to be this good there has to be an organization. And it’s got money behind it, machinery, specialist know-how, a distribution system. Besides, there are other
signs pointing the same way.”

  “Such as?”

  “As you know,” Wainwright said, “I keep in touch with law agencies. Recently there’s been a big increase through the whole Midwest in counterfeit currency, travelers checks, credit cards—other cards as well as our own. There’s also a lot more traffic than usual in stolen and counterfeit securities, stolen and forged checks.”

  “And you believe all this, and our Keycharge fraud losses, are linked?”

  “Let’s say it’s possible.”

  “What’s Security doing?”

  “As much as we can. Every lost or missing Keycharge card that turns fraudulent is being checked out and, where possible, tracked down. Recovered cards and fraud prosecutions have increased every month this year; you’ve had the figures in reports. But something like this needs a full-scale investigation and I don’t have either staff or budget to handle it.”

  Alex Vandervoort smiled ruefully. “I thought we’d get around to budget.”

  He surmised what was coming next. He knew of the problems under which Nolan Wainwright labored.

  Wainwright, as a vice-president of First Mercantile American, was in charge of all security matters in the Headquarters Tower and at branches. The credit card security division was only one of his responsibilities. In recent years the status of Security within the bank had been advanced, its operating funds increased, though the amount of money allotted was still inadequate. Everyone in management knew it. Yet because Security was a non-revenue producing function, its position on the priority list for additional funds was low.

  “You’ve got proposals and figures, I presume. You always have, Nolan.”

  Wainwright produced a manila folder which he had brought with him. “It’s all there. The most urgent need is two more full-time investigators for the credit-card division. I’m also asking for funds for an undercover agent whose assignment would be to locate the source of these counterfeit cards, also to find out where the leakage is occurring inside the bank.”