The Los Angeles office of the FBI spends more of its time and resources on fraud against financial institutions than any other type of white-collar crime. And just as the face of L.A.’s banking community has changed in recent years, so has the type of misdeeds involving banks.

Back in the late ’80s and early ’90s, authorities were kept busy tracking down fraudulent activity within the dozens of banks and thrifts that went belly up during the period.

But as a result of increased scrutiny by regulators and overall industry consolidation, reported cases of major fraud involving senior executives at financial institutions are now rare.

“If you go five or six years ago, our biggest concern was internal fraud that contributed to the failure of financial institutions. That’s where we put the majority of our resources,” said Special Agent Richard Wade, who heads the white-collar crime division of the Los Angeles office of the FBI. “Now the biggest problem is crimes by outsiders against banks.”

Between 1990 and 1995, the FBI’s L.A. office investigated 125 bank and S & L; failures that resulted in more than 100 convictions for fraud. Today, there are no such investigations underway.

Far more common than insider fraud is the use of fraudulent checks and ATM cards by outsiders. Los Angeles is a hotbed for such activity, accounting for 21 percent of all fraud complaints registered with the FBI by financial institutions.

“Fraud against financial institutions continues to be a problem,” said Walt Mix, commissioner of the California Department of Financial Institutions. “The criminals are sophisticated operators who have learned how to hit many institutions for small amounts that add up to large amounts, but which are hard to aggregate and bring to prosecution.”

Check fraud is the biggest problem. With the aid of computer scanners and laser printers, it is easier than ever to produce and cash counterfeit checks. Rather than clear out a victim’s bank account, which would quickly raise red flags, scammers tend to tap multiple accounts for smaller amounts.

Because law enforcement tends to focus on larger cases of fraud, a bogus check that’s worth only a few thousand dollars is not likely not be investigated.

While private citizens can be the targets of such crime, large companies tend to be the favorite victims, because they are less likely to spot bogus checks among the thousands issued each month. And because big companies typically use big banks, it is usually the larger banks that suffer the brunt of check fraud.

But smaller banks can also be affected. HF Bancorp, a savings and loan based in Hemet, recently announced that bad checks written by a single customer may result in a $2.9 million charge against its earnings.

Another growing problem is ATM fraud. Earlier this year, charges were filed against eight local men who took part in an elaborate ATM scam that resulted in the theft of over $2 million from banks.

With the aid of gas-station clerks, video cameras recorded customers as they entered their secret ATM codes at the pump. Armed with this information, the defendants encoded blank ATM cards, which were then used to withdraw cash at convenience-store ATMs.

There’s also mortgage fraud, in which suspects use false financial information to secure mortgages from banks and thrifts. Greater Los Angeles accounts for 33 percent of mortgage fraud nationwide, according to the FBI.

Banks approach fraud in various ways. One method being championed by the California Bankers Association is the use of fingerprinting for any non-bank customer wanting to cash a check. Although the customer will already have received the money by the time a phony check is detected, the bank will have at least one lead in tracking down the perpetrator.

Some large banks are developing a system that would allow them to exchange check data electronically between the check writer’s bank and the bank where it is deposited, rather than having to physically exchange checks. The system would cut the time that it takes banks to identify a bad check from days to hours.

Typical Scam: Check fraud

How It Works: Criminals use computer scanners and laser printers to make copies of stolen checks, which are then cashed. The checks may be stolen from individuals and businesses, or even sold by corrupt bank employees. Dollar denominations and dates on signed checks can be erased with chemicals so multiple checks of larger denomination can be created and cashed. With stolen financial data criminals can even create new checks from scratch. Favorite targets are big businesses that issue tens of thousands of payroll checks, such as fast-food restaurants and grocery stores. Such fraud is hard to detect. In the end, it is the banks that pay the bill for the bogus checks.

How It Is Detected: Victims notify the bank that their accounts have been tapped by criminals. The banks then pass information to the U.S. Federal Reserve, which in turn informs the FBI. The FBI then puts together the thousands of individual cases to identify organized scams. Banks are placing more emphasis on preventing the crime by using checks that can’t be copied by photocopiers and scanners and fingerprinting any non-bank-customers attempting to cash checks.