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Alan Strober of Union, a principal in New Jersey's largest licensed check cashing conglomerate, was brought to the public hearing from the federal prison in Morgantown, West Virginia, to provide testimony from the viewpoint of a former president of the New Jersey Check Cashers Association (NJCCA). He was a cooperative witness, who was serving a prison term imposed after he pled guilty to charges he violated the federal law requiring the filing of Currency Transaction Reports (CTRs) on transactions involving more than $10,000. He became president of the NJCCA in June, 1987, but did not resign that office until February 10, 1988, more than seven months after his guilty plea to the federal crime. No effort to oust him from office was initiated during that period by the NJCC A. More importantly, the State Banking Department as of the time of his public hearing testimony had not revoked his license. Such inaction unfortunately suggests to the public, and to the check cashing industry, that neither the state regulatory agency nor the professional association of check cashers is unduly concerned that a major check cashing licensee and leader of other such licensees is a convicted felon who remained completely free of regulatory or professional sanctions for a prolonged period of time. As noted in the questioning of various other witnesses on the subject of CTRs, the violation of the filing requirement for these forms was crucial to the successful commission of massive embezzlements, tax evasions and other frauds in the check cashing industry. Gallagher a "Very Bad Customer"
In his early days as a licensed check casher, Strober said, he had been befriended by Anthony Gallagher-whose questionable activities were described during the public hearing-and he had touted Gallagher as a worthy business associate. However, that assessment of Gallagher turned out to be a mistake, as Strober recalled in response to questions by SCI Counsel Clark:
Q. When you first went into the check cashing business and bought a business from another check casher, you recommended Anthony Gallagher as a good customer. Is that correct?
Q. And was Mr. Gallagher a good customer? Q. In what respect?
Q. How so?
Q. Approximately when did that occur?
Q. About 1977?
Penitent Convict Urges Reforms
Strober discussed a number of reform proposals, several relating to his own misconduct as a licensee, as he was questioned by Counsel Clark:
Q. Based on your experiences, do you have some recommendations for the Commission as to how to prevent, identify or deal with illicit activities in the check cashing industry?
Q. What would regiscoping include?
Q. Continue.
Against Check Bouncing Loans
I also think that there should be a law against habitual bouncers of checks. I think that if a maker of a check bounces a check at a check cashing store more than three times in one year, that maker should not be allowed to have his checks cashed at a licensed check cashing store. If that law is not on the books, it will allow unscrupulous check cashers and their unscrupulous customers to use the check cashing mechanism for disguised lending, being that if a guy cashes a check at a store and it's an out-of-state check, it takes about ten business days for that check to come back to the check casher, so they can easily make a two-week loan. The check casher may know that that check is not good for cashing. It's a disguised loan.
Customers Should Get Receipts
WITNESS (continuing): I also feel that there should be a law posted at all check cashing stores that a customer has a right to a receipt of a transaction. That's also protection to the casher. An honorable check casher wants to have his customer know that he got every penny back. It should be posted;: it should be the law; it should be the customer's right. I also feel that there should be a law, also posted at the check cashing store, that [customers] have a right to make a toll free call on a consumer complaint hot line; that if they feel they've been dealt with unfairly or dishonestly they car air
their grievance immediately. I think there should be one further law that should be posted at a check cashing store, that [it] is not a payee's right, a customer's right, inalienable right, invincible right to cash a check-that obviously he can't be turned down on the basis of race or religion but he should be turned down if his identification is not sufficient . . . A lot of people feel that it's their absolute right to get their check cashed whether they have identification or not. I also [note] that when a person violates a check cashing law they're subject to a thousand dollars' fine. I think that law is behind the times. In New York it's a $5,000 fine to violate the statute. I think our own state should update [its] statute to $5,000. That would put more teeth in the law.
BY MR. CLARK: Q. What about the problem of money laundering through check cashers?
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