A description of our fraud prevention and cyber crime projects we are preparing to implement on a nationwide basis. We are seeking investors, marketing, human resources, IT infrastructure, coding and programming, cyber security professionals. The services described are projected to generate over $286 Billion in revenue in 2018 The market share consists of 11 million businesses, 120 million consumers and family members, along with victims of ID Theft, Check Fraud. Tax Refund Fraud, Title Fraud, Mortgage Fraud, Installment loan fraud, and internet fraud. Fraud crimes are at epidemic levels and has seen dramatic increases over the last 20 years. This is a system that can be implemented throughout the U.S. Canada, and the world. Consumers will be able to verify their identity and protect themselves from fraud just by submitting their fingerprint. It will be required by any business that sells products or services.

1. The Financial Instrument Secure
Transaction System (FISTS) and its
partner project
Law Enforcement Fraud Prevention
Network (LEFPN)
THE FUTURE OF FRAUD AND CYBERCRIME PREVENTION
PRESENTED BY THE FRAUD PREVENTION NETWORK A DIVISION OF ABERNATHY INVESTIGATIVE GROUP LLC
T REX BLDG. SUITE 501 911 WASHINGTON AVENUE ST. LOUIS, MO. 63101

2. Statistics abound to indicate fraud is an ongoing problem: According
to the 2015 APF Payments Fraud and Control Survey, 62% of financial
pros indicated their organizations had been subject to payments
fraud in 2014.
Payment methods most targeted in fraudulent attempts were checks
(77%), credit/debit cards (34%), and wires (27%).
http://news.cuna.org/articles/109387-fraud-trends-revealed

3. The financial fraud problem
Check fraud prevention system
The problem (Based on U.S. Federal Reserve 2016 study February 6, 2017)
U.S. noncash payments, including debit card, credit card, ACH, and check payments,
are estimated to have totaled over 144 billion with a value of almost $178 trillion in
2015, up almost 21 billion payments or about $17 trillion since 2012
40% of checks cashed are cashed directly at or deposited into the bank they are drawn
on.
60% of checks are cashed at “non-banks”, or money service centers as a convenience
for their customers. They have the least amount of protection and if a check is
returned, they are 100% responsible for the loss. Businesses of this kind have lost
anywhere from $10,000.00 to $60,000.00 at one location within an hour
Many of these transactions were committed using legitimate check information which
may not be detected for 7-10 days

4. Who is impacted
Consumers Businesses Government Agencies
 ID Theft Victims Grocery Stores Internal Revenue
 Stolen credit/debit card information Convenience stores Social Security
 Stolen Checking account information Liquor stores U.S. Secret Service
 Stolen Social security numbers Money Service Businesses U.S. Treasury
 Stolen Mortgage information Gas Companies Municipal governments
 Personal information from children Electric Companies State Governments
 Personal information from the elderly Water Companies
 Stolen information from the deceased Phone companies
 Stolen Bank account/payroll information Stolen Business account information
 Stolen credit information Insurance Companies
 Healthcare agencies
 Non-profit organizations

5. The solution
 FISTS check verification system will analyze up to 26 specific items on a
submitted check to determine its validity. Our competitors only analyze 4
items and do not analyze the entire check
 At present there is no check verification system that analyzes the entire check
front and back, and provides query information to serve all banks and money
service centers simultaneously with a real time response to a submitted check
 With the Law Enforcement Fraud Prevention Network, local, state, and federal
law enforcement agencies will be immediately notified of a fraud crime in
progress with an image of the suspect displayed on the mobile computers of
the responding police units
 The combination of these two systems can reduce losses from fraud by as
much as 85% or 148 Trillion dollars based on the 2015 Federal Reserve figures

6. Existing systems that can be used to
build this project ( Scanshell)
Has the ability to extract and store
Information from the front and back
Of a check for query
Is capable of adding additional transactions
Flags or alerts can be immediately placed
Many potential clients already use some
Form of the hardware and software

7. Secure Check Cashing
• Primarily uses scanshell software and hardware
• Now offers networking to numerous computers
• Scans the entire check and automatically scans certain information into its database for query
• Can scan a submitted fingerprint to open up an existing customer file
• Makes a record of the customer’s identification and current webcam picture
• Only has 3,900 units operating within forty states

8. Sample Bettercheck control panel
You are logged in as: demo [Signout]
 Use of the BetterCheck system constitutes
unconditional agreement to the terms of service
 Current Balance: $2,500.00 Verifications
Remaining: 8620
Routing Number:
 Account Number:
 Amount:
 Check # (Optional):
 Submit/Reset

9. What’s the return on investment?
Based on rate of 98 cents per transaction
# clients # Tier One
Monthly
200 each location
Tier One
Annual
Tier Two
Monthly
500 each location
Tier Two
Annual
Tier Three
Monthly
1,000 each location
Tier Three
annual
250 50,000 49,000 588,000 122,500 1.47 million 245,000 2.94 million
500 100,000 98,000 1.176
million
245,000 2.94 million 490,000 5.88 million
1000 200,000 196,000 2.352
million
490,000 5.88 million 980,000 11.76
million
2500 500,000 490,000 5.88 million 1.225
million
14.7 million 2.45 million 29.4 million
5000 1million 980,000 11.76
million
2.45 million 29.4 million 4.9 million 58.8 Million
10,000 2 million 1.96 million 23.52
million
4.9 million 58.8 million 9.8 million 117.6
million
25,000 5 million 4.9 million 58.8 million 12.25
million
147 million 24.5 million 294 million

10. The Value Proposition
 85 % reduction of losses from fraud crimes
 Consumers and businesses protected nationwide
 Faster response and effectiveness from law enforcement
 Funds that would normally be used to fund drug trafficking
and terrorism reduced
 A system that is scalable and able to adapt to any new fraud
crime
 Participation in Cybercrime and Cybersecurity breaching
that is projected to produce $286 Billion in revenues by 2018
(Entrepreneur Magazine April 2014 Edition)

11. The Beta Testing process
 Beta testing increases the system speed and volume to be able to increase the number of clients
possibly from 100 -2,000 clients
 A free trial will be offered to each potential client based on the Tier Structure: (Over a
one year period, based on 150 clients in each tier)
Level # Transactions Cost per client Potential clients Total cost
Tier One 25 24.50 500 $3,675.00
Tier two 50 49.00 1,500 $7,350.00
Tier three figures not included because the system will have to be scaled within 18 months to three
years to handle this volume. Tier One and Two should be generating revenues to recoup costs
and maintain growth
Additional costs (Annual)
# Staff Salaries Benefits Infrastructure Building Marketing
8 240,000 16,000 300,000 72,000
 Total need $628,000.00 $52,334.00 per month $1,745.00/day $145.37/hour
 148 transactions per hour@ 98 cents each (54 clients on average)

12. The process flow

13. The 25 points of analysis

14. The alpha & Beta testing process
 We will utilize existing databases and /or create new databases
so that data from a check image into the databases and test for
transaction speed.
 The overall goal is to get the system to handle over 300
transactions per hour which can service 50 -150 clients
 Automation of the 25 points of reference will be the priority

15. Commercialization
 The MVP is the check verification system. The Law Enforcement Fraud
Prevention Network is a future growth project that will work together with
the verification system
 The ability to notify the police to a crime will be built into the check
verification process
 The projection is an eventual 25% market penetration. The total market is
975,000 businesses with locations numbering from 10 to 5,000 branches. This
means the system would reach 9.75 million Tier two branches up to 50,000
Tier three branches.
 Based on the current average of 150 million transactions per month overall,
25% of the market would be 37.5 million transactions with gross revenues of
$36.75 million per month $441 million annually
 Tier Three readiness can be a reality within 18 months to three years

16. Explanation of check cashing market by Tier
 Tier One
 Our smallest market but they represent many potential clients. They represent over
3,800 locations within a 350-mile radius.
 They are comprised of small grocery stores, convenience stores, gas stations, and
liquor stores that cash payroll, insurance, and tax refund checks that are in ranges of
$250.00 to as much as $17,000.00 each. They cash an average of 50 checks per day.
Their loss ratio is anywhere from 30% to 50%.
 They have very little or no protection from insufficient or fraudulent checks. They are
also the most victimized group out of all the Tiers because the crooks know what
protections they have and don’t have. Some of them have purchased the Secure Check
Cashing system for as much as $4,000.00 per unit and pay an average of $80.00 for
monthly service. They have access to Certegy and Telecheck but do not use it because
of the additional cost. The only information to protect themselves is within their
individual units.

17. Check cashing centers Tier Two
 Tier Two
 They are medium size grocery chains, check cashing center chains, and
convenience store chains. Most of the potential clients have a minimum of 30
chains nationwide that cash approximately 1,500 checks per day per location with
a dollar volume of $200,000 per location.
 To counteract the large amount of losses, they have switched to ACH
(Automated Clearing House) for check approval but still suffer losses from the
use of legitimate account information on stolen, counterfeit, or stop payment
checks. In many cases, they do not use Telecheck or Certegy because the high
percentage they have to pay for each check. They suffer losses from payroll, tax
refund, insurance, personal, and settlement checks.
 An infrastructure must be in place to handle volume that could exceed as many
as 30,000 verifications per day. Bugs must be worked out before tackling this
level. It will also be the level to prepare for Tier Three.

18. Check cashing centers Tier Three
 Tier Three
This is Wal-Mart, K-Mart, large grocery chains, large
convenience store chains, and multi-location check
cashing centers, banks and credit unions. My last
estimate was 957,000 locations within the U.S. There
are as many as 50,000 branches to service. (Google, manta)
This will require being able to handle as many as
500,000 transactions a day.

19. Suggested pricing
Tier One $350.00 per month per location to cover the
cost of check investigations and 175 verifications per
month.
Tier Two- $750.00 per month per location to cover
cost of check investigations and 380 verifications
Tier Three- $2,000.00 per month per location to cover
the cost of check investigations and 1,020 verifications.
Verifications over these amounts will be at a rate of 98
cents each

20. Future incentives
Many former clients of Telecheck and Certegy were attracted to a check
guarantee. The way it works if you had to meet eight criteria items before they
would guarantee a check. They in turn would refund the amount of the check to
the client and become “a holder in due course” They would then attempt to
collect the proceeds of the check plus a $200.00 to $500.00 administrative
charge. The bad thing about it is that the client must pay a higher percentage for
each check verified.
The guarantee is a combination of an insurance policy and cash reserve funds. It
is also known as a service warranty. There logic was to keep the loss ratio from
checks at or below 35%. The increase of fraud and the fact that they do not
conduct a good enough analysis on a submitted check has increased the loss
ratio.