Check-fraud case highlights insider risk for banks

In the latest reminder of the ongoing threat posed by check fraud, the Federal Reserve has banned from the industry a former Regions Bank employee in connection with a scheme that allegedly cost the bank roughly $400,000.

The case highlights the danger that rogue bank insiders can pose to their employers, even if such incidents are relatively rare. Elazia Jones, a onetime relationship banker at a Regions branch in Memphis, Tennessee, allegedly received personal benefits, including cash, in exchange for cashing counterfeit or fraudulent checks.

Jones agreed to the ban from banking without admitting or denying the Fed's allegations. The Fed described her as having been part of a "broader check fraud ring" that caused more than $396,000 in losses to Regions. Her employment was terminated in November 2024, according to the Fed.

A Fed spokesperson declined to comment beyond the prohibition order. A spokesperson for the U.S. Secret Service, which investigates financial institution fraud, said the agency does not confirm or deny the existence of ongoing investigations.

Jeremy King, a spokesperson for Regions Financial — the Birmingham, Alabama-based parent company of Regions Bank — said the company is thankful for the diligence of investigators.

"What happened here is not reflective of the values our teams work to uphold every day," King said in an email. "Regions Bank is committed to fostering a culture of integrity and accountability, and we remain available to investigators if needed as we have zero tolerance for this type of behavior."

Regions has been hurt before by check fraud — in a much bigger way.

Over a six-month span in 2023, the $161 billion-asset bank reported $135 million in losses due to check fraud. Regions attributed that spike to a change in the period of time that it held deposits before making them available to customers.

"We opened the door too wide, bad people came rushing in, and we didn't close the door timely enough," said David Turner, Regions then-chief financial officer, in November 2023.

King said Wednesday that the matter discussed in the Fed's recent prohibition order has nothing to do with the 2023 issue.

"That issue from three years ago was a process change fraudsters sought to exploit. The issue involving Ms. Jones is a completely separate matter," King said.

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Scott Anchin, a senior vice president at the Independent Community Bankers of America, said that he doesn't believe bank insiders are a significant part of the check-fraud problem.

"My sense is that banks have done a really good job building internal controls around check processing and check fraud. There's a lot of training that takes place. There's a lot of oversight that takes place," Anchin told American Banker. "I think where we see some insider problems probably lie within the Postal Service more commonly, where we see some unfortunate incidents, where postal employees are parties to mail theft."

A Federal Reserve survey of senior risk officers at financial institutions in late 2025 found that a multi-year resurgence in check fraud was continuing. Some 32% of the respondents said that incidences of counterfeit checks were increasing, while only 16% said they were decreasing.

But in the public policy realm, there are reasons for bankers to be optimistic regarding the check-fraud problem, according to Anchin.

He pointed to a request for information from federal banking regulators last year on payments fraud, which drew comments from community banks regarding the need for more flexibility in holding funds.

"I think that the message was probably communicated loud and clear," Anchin said. "So I see a lot of momentum there."

Similarly, Anchin pointed to a House committee's recent passage of a bill that would allow financial institutions to place extended holds on suspicious checks while investigating potential fraud.

In late June, the House Financial Services Committee approved the STOP Payments Fraud Act, sponsored by Rep. Young Kim, R-Calif., in a 51-0 vote.