Southern California bakery owner targeted in elaborate check fraud scam

A Southern California bakery owner is warning other business owners after she was targeted in an elaborate counterfeit check scam.

Loria Stern, the owner of Eat Your Flowers bakery in Highland Park, has been running her business for 12 years. Throughout that time, Stern said she’s seen her fair share of scams, but this latest scheme truly surprised her.

It began in early August when she was contacted by email asking for an order of 1,000 cupcakes.

The scammer, someone named “Zoe Madison,” said she didn’t want to pay with a credit card or through mobile payment apps, so she sent a check for $7,560 instead.

When Sterns cashed the check at the bank, it initially cleared so she began working on the large cupcake order.

“There were a lot of specific details in the emails going back and forth with her that really made me believe that this order was happening,” Stern said.

However, two days before the scheduled pick-up, she received another email from the suspect saying she needed to revise the cupcake order “due to budget constraints.” She wanted Stern to cut the bakery order in half and refund the difference in cost.

Stern told the customer that wasn’t an option as the order was a custom one.

“The next day, 24 hours before she was supposed to pick up the cupcakes, the funds were withdrawn from my account and it was cited as a counterfeit check,” she recalled.

Stern called the company listed on the check — Peak Trading Corporation located in upstate New York. 

Their accountant told her that 15 other small business owners, specifically within the service industry, had also called with the exact same complaint.

Lou Rabin, a cybersecurity expert, said scammers are becoming increasingly sophisticated and able to circumvent any red flags raised by potential victims.

“AI is really changing the game,” Rabin said. “It’s the reason that the English on these emails is impeccable. They’re very persuasive, so business owners really need to understand and have a process for processing orders and verifying your customers.”

As for Stern, she hopes that by sharing her story, she’s able to prevent another business owner from falling prey. 

“This was just a really advanced and a really intricate scam,” she said. “I have a feeling this is their full-time job. They’re doing these elaborate scams to different businesses and I guarantee they’re making money.”

Rabin said it’s important to verify every customer before conducting any large transactions and when possible, speak to a live person over the phone and verify information with an online search.