Altering a cheque to frame the Premier or Works Minister would have been practically impossible at the Bank of Bermuda or its cheque-clearing company, sources familiar with Bermuda's banking system told The Royal Gazette.

They said it was extremely unlikely that anyone at the bank or its clearing house ProServe tampered with any cheques because of strict measures to prevent fraud and the high-speed nature of their processes.

They spoke to this newspaper after Premier Ewart Brown and Works Minister Derrick Burgess claimed they were the victims of a sophisticated smear campaign to make it look like they received cheques from Landmark Lisgar Construction, now LLC Bermuda, which is behind the controversial new Police/court building in Hamilton.

The pair produced copies of cheques they said had been doctored to imply that Mr. Burgess received $10,000 and Dr. Brown $14,780 from Landmark Lisgar — when in fact it was Chester Management and Scorpio Construction which received that cash.

They claimed Permanent Secretary Robert Horton unearthed the cheques while looking through the Works and Engineering Ministry's books.

Mr. Horton has since told the Bermuda Sun he cannot rule out that the cheques were altered by somebody within Works and Engineering.

Yesterday, sources said if the copies were indeed altered, that would have been done outside the banking and cheque processing system.

To illustrate how difficult it is to tamper with a cheque, they offered us a breakdown of what happens when a company (in this case Landmark Lisgar) makes out a cheque to a subcontractor (in this case Scorpio).

Every employee involved in every step of this chain has been extensively trained to look out for discrepancies such as scratches or other evidence of tampering:

• Scorpio takes its cheque, together with a deposit slip, to the Bank of Bermuda, which records details from that deposit to be picked up by the cheque-clearing company later that day;

• That cheque and deposit slip are both placed in a see-through tamper-proof bag by the customer or bank;

• Later that day, clearing house couriers collect these bags from the Bank of Bermuda;

• Each bag is opened by a clearing company employee who verifies its contents with the deposit slip;

• Another employee then batches and encodes the cheque; another person translates that information from human readable form to machine readable form;

• The cheque is then processed by a machine that reads the amount of money, the serial number, the account number and the name of the bank, before sorting the cheques by bank;

• An image of the front and back of the cheque is then created and stored on the computer;

• As the bank runs its nightly procedure, the data is transmitted to the Bank of Bermuda and the bank transfers the money from Landmark Lisgar's account to Scorpio's. The bank then sends a file back to the clearing house for it to create a printed statement;

• The clearing house's machine then prints the bank statement, together with the image of the cheque. The printed statement including the image of the cheque is inserted into an envelope by electronic high-speed inserters, before being delivered to the Post Office that day;

• Landmark Lisgar receives a statement which also contains the image of the cheque. In this case it is thought Landmark Lisgar was obliged to give Works and Engineering a copy for its own records.

• After receiving the statement, most companies do a bank reconciliation to confirm that all the cheques that are written were posted by the bank with the right payee to the right account.

Banking experts say that the only people who get their hands on the cheques throughout the process would be those in the production line at the bank or the clearing house.

However, the 15 or so clearing house employees involved process a huge number of cheques a day — dealing with tens of thousands of pieces of paper at great speed.

It would be impossible for a potential fraudster to know when the cheque is going to appear on the production line; and even if they did they would not be able to take it out, tamper with it and put it back without alerting colleagues who are making their own verifications.

And even if somebody did manage to change the name, it would have been standard practice for the payee — in this case Landmark Lisgar — to go through the final statement that it received in the mail to ensure the name on the cheque — Scorpio — was correct.

One source said to this newspaper: "It would be highly unlikely for a cheque to be made out to one individual that is completely different from the company or person depositing that cheque to go all the way through the bank and the clearing company's processes without someone questioning this difference.

"Furthermore, to ensure that the person or company issuing a cheque retains control over who actually receives the money, it is prudent business practice to review the returned cheques, or in this case the returned image of the cheque.

"The bank statement and an image of the cheque is returned to the person or company depositing the cheque within 30 days as part of the statement process.

"As we are all well aware most businesses do bank reconciliations and agree all of the information on the cancelled cheque back to their chequebook."

The Bank of Bermuda has said it cannot comment because the matter is under Police investigation.