He Stole $1.7 Million with Fake Checks… and Converted It All to Bitcoin

• How Did the Fake Check Scheme Work?
• Why Couldn’t Banks Stop the Fraud Sooner?
• What Role Did Cryptocurrency Play in the Money Laundering?
• What Evidence Exposed the Scheme?
• What Charges Does Rathod Face?
• Frequently Asked Questions

In one of the most sophisticated fraud schemes of recent years, a 44-year-old New York man allegedly masterminded a multi-million-dollar scam involving fake checks and bitcoin conversions. Tushal Rathod orchestrated a complex operation, depositing fraudulent checks into shell company accounts, withdrawing cash, and laundering the proceeds through cryptocurrency. Despite banks flagging suspicious activity, Rathod evaded detection by constantly shifting accounts and recruiting accomplices. Federal authorities have now charged him with multiple counts of fraud, exposing a glaring vulnerability in traditional banking systems exploited by crypto-savvy criminals.

How Did the Fake Check Scheme Work?

Tushal Rathod’s operation was alarmingly methodical. He created multiple shell companies with names designed to appear legitimate, using them to open business bank accounts. These accounts became conduits for depositing counterfeit checks, often with six-figure amounts. The checks were fabricated to look like payments from real estate firms or corporate clients, providing a veneer of legitimacy. In one documented instance, Rathod deposited a fraudulent check labeled as a “legitimate client payment,” withdrew nearly six figures in cash, and converted it to Bitcoin before the bank could identify the check as fake. This pattern repeated dozens of times, with Rathod carefully timing withdrawals to occur before banks could complete fraud verification processes. The BTCC team’s analysis of court documents reveals that Rathod specifically targeted mid-sized banks where large business transactions wouldn’t immediately raise red flags.

Why Couldn’t Banks Stop the Fraud Sooner?

Despite multiple financial institutions identifying suspicious activity as early as 2022, Rathod’s scheme continued for years due to systemic loopholes. Major banks including Chase, Bank of America, and Wells Fargo successively flagged and closed his accounts after recognizing the deposited checks lacked credible justification. However, Rathod exploited a critical weakness in the banking system – the time lag between check deposit and fraud detection. He would rapidly withdraw portions of the funds or initiate cryptocurrency purchases during this window. The fraudster also adapted his methods when blocked, simply opening new accounts under different business names or recruiting associates to deposit checks on his behalf. Banking security experts note that while AI-powered fraud detection has improved, sophisticated operators like Rathod exploit the “float period” where funds appear available before verification completes.

What Role Did Cryptocurrency Play in the Money Laundering?

Bitcoin became the perfect vehicle for Rathod to obscure his illicit gains. After withdrawing cash from banks, he systematically converted amounts to cryptocurrency through various exchanges. The complaint details how Rathod would then transfer Bitcoin to wallets controlled by accomplices, effectively breaking the money trail. This crypto conversion happened with remarkable speed – in several cases, funds moved to Bitcoin within hours of check deposits. The BTCC exchange was among platforms where transactions occurred, though most activity spread across multiple services to avoid triggering anti-money laundering alerts. Investigators traced at least $1.3 million that flowed directly from fake check deposits into cryptocurrency purchases, with the remainder spent on luxury items or transferred overseas.

What Evidence Exposed the Scheme?

Digital footprints proved Rathod’s undoing. Federal investigators obtained his iCloud and WhatsApp communications, revealing explicit discussions about the fraud. In messages to an accomplice, Rathod admitted the checks “never clear” and discussed strategies to “make them look like client payments.” Other exchanges detailed plans to recruit more deposit “mules” and which bank branches were most vulnerable to the scheme. Perhaps most damning, Rathod discussed specific Bitcoin wallet addresses and conversion rates, providing investigators with a roadmap to follow the money. The U.S. Attorney’s office noted these digital communications were “exceptionally careless” for someone running such an elaborate financial crime operation.

What Charges Does Rathod Face?

The federal indictment hits Rathod with three major charges: bank fraud, wire fraud, and money laundering conspiracy. Each carries maximum sentences of 20-30 years in federal prison, plus potential fines reaching hundreds of thousands of dollars. Prosecutors emphasize the “sophisticated means” enhancement applied to the case, which could increase sentencing guidelines. Given the scheme’s duration and dollar amount, legal experts suggest Rathod likely faces 12-15 years under federal sentencing rules. The case also highlights growing coordination between financial regulators and cryptocurrency investigators, with the IRS Criminal Investigation unit playing a key role in tracing the Bitcoin transactions.

Frequently Asked Questions

How much money did Tushal Rathod steal?

Court documents indicate Rathod successfully deposited and converted approximately $1.7 million through the fake check scheme before authorities intervened.

Which banks were affected by this fraud?

While the complaint doesn’t list all institutions, it specifically mentions incidents involving Chase, Bank of America, and Wells Fargo accounts.

How long did the fake check operation last?

Investigators traced the scheme’s activity from at least early 2022 until Rathod’s arrest in mid-2024.

Why use Bitcoin for money laundering?

Cryptocurrencies allow near-instant cross-border transfers without traditional banking oversight, though blockchain analysis eventually helped trace Rathod’s transactions.

What mistakes led to Rathod’s capture?

Key errors included using personal cloud accounts for criminal communications and failing to properly obscure Bitcoin wallet connections between accomplices.