Texas is stepping up its fight against an escalating wave of mail theft and check fraud.
The state recently enacted a bill that aims to give law enforcement more effective tools to combat high-volume financial crimes that have significantly impacted banks, credit unions and their customers nationwide.
Among other changes, Senate Bill 1281, which takes effect on Sept. 1, sets the maximum sentence for stealing large amounts of checks to life imprisonment and sets a higher minimum penalty for stealing mail from elderly and disabled people.
The new legislation, signed last week by Governor Greg Abbott, aims to address concerns that existing mail theft laws did not adequately handle the rising incidents of check fraud facilitated by stolen mail and the theft of master mailbox keys, often referred to as "arrow keys."
Key provisions of SB 1281
Penalty structure based on stolen checks: SB 1281 introduces a new penalty structure tied to the number of stolen "negotiable instruments" (i.e., checks, money orders, etc.) rather than the number of addresses affected by an instance of mail theft.
For instance, taking 50 or more negotiable instruments can result in a first-degree felony. Such felonies can result in up to a life sentence, according to
Presumption of intent for guilty parties: The law establishes a so-called "rebuttable presumption of intent" to steal negotiable instruments and facilitate fraud if an actor steals mail containing a combined total of five or more checks.
In other words, the law requires that juries should assume that anyone who stole mail containing five or more checks intended to steal the checks and facilitate fraud — that the person knew the mail contained checks. The burden then falls on the defendant to prove they did not have that intent.
Crucially, juries will not presume a defendant on trial for mail theft is guilty, as that is unconstitutional. Rather, if the jury believes beyond a shadow of a doubt that the defendant did indeed steal mail, then if the mail contained five or more checks, the jury can presume that the defendant knew the mail contained checks.
Increased penalties for stealing from vulnerable victims: An offense category increases if the actor knew or had reason to believe the addressee of an appropriated negotiable instrument was disabled or elderly.
Expanded definition of mail theft: The law broadens the definition of "mail" to include items in transit or those that have been delivered but not yet received by the addressee.
It explicitly includes the theft of negotiable instruments like checks and money orders. This change addresses situations where postal or carrier workers might be involved in stealing mail.
New offense for stealing dropbox keys: The law creates a specific offense for unlawful conduct involving mail receptacle keys or locks. This includes obtaining, possessing, duplicating, transferring, or using such keys or locks with intent to harm or defraud.
Stolen arrow keys grant criminals unrestricted access to mailboxes, enabling large-scale theft. Stealing these keys was already illegal; the new law simply creates a more specific offense about it.
The Florida man admitted to opening over 100 fake TD Bank accounts in exchange for bribes, leading to $72,000 in fraud losses at the bank.
The offense is a third-degree felony, increasing to a second-degree felony for repeat offenders.
Backed by Texas banks
The Texas Bankers Association, or TBA, strongly supported SB 1281 and convened a Fraud and Security Task Force and hosted a Fraud Solutions Summit to address the rising problem.
The TBA was "proud" to work with Tan Parker, the Republican state senator who authored the bill, according to Chris Furlow, president and CEO of the Texas Bankers Association.
"This new law attacks a problem that's been plaguing community banks, their small business customers, and Texans at their home mailboxes," said Furlow. "This is another big win for Texas consumers and sends the message that, if you commit financial crimes in Texas, don't expect a slap on the wrist — you're going to prison."
The context: A surge in check fraud and banking vulnerabilities
Texas passed SB 1281 amid a significant rise in check fraud.
In one recent case in Oklahoma, a conspiracy netted over $100,000 using fraudulent checks, according to a federal indictment. The Oklahoma scheme heavily relied on:
- Stealing mail from Postal Service collection boxes using so-called "arrow keys" the accused allegedly stole.
- "Washing" checks with chemicals to alter payee names and dollar amounts, or using them as templates for counterfeits.
- Recruiting "money mules" through social media advertisements, who then allowed forged checks to be deposited into their accounts in exchange for a portion of the proceeds. Scheme leaders often requested debit cards, PINs and online banking login information from these recruits.
The speed and automation of check processing, particularly through mobile deposit, allows fraudsters to exploit vulnerabilities. In the Oklahoma case, banks often cleared fraudulent checks, sometimes individually small amounts that quickly added up.
This places a significant burden on banks, which often find themselves battling each other over reimbursing losses. Recovering funds from the bank of first deposit can take months.
