Florida Targets Check Cashing Fraud

Just months after Florida lawmakers enacted a law targeting the role of check cashing companies in the construction industry, state officials announced a string of arrests netting more than $140 million in fraudulent transactions.

One investigation revealed that Hugo Rodriguez used the check cashing companies to hide $70 million in payroll by using seven individuals to set up 10 shell companies to avoid paying workers’ compensation premiums. Among the check cashing firms used by Rodriguez is K&N Fords, a licensed check cashing firm in Palm Beach County. The owners agreed to pay $490,000 following an investigation in 2011.

The new law eliminates a requirement that regulators give check cashing firms 15 days notice prior to conducting an audit or investigation. Regulators must examine check cashing firms within five years, but not within six months of the check cashing firm being licensed as had been the case. Regulators requested the change to give them more flexibility over which firms to investigate. Check cashing firms also are required to maintain a commercial account to deposit checks and can only accept checks from the original payee or an authorized officer of a company.