18 Indicted for Bank Fraud, Identity TheftNYC Crime Ring Busted After $1.4 Million in Counterfeit Checks Cashed Manhattan District Attorney Robert Morgenthau announced this week that his office has indicted 18 people from New York City for operating a bank fraud and identity theft scheme. The scheme resulted in the cashing of more than 1,000 counterfeit checks at several large banks.
The 18 defendants are accused of collecting customers' personal information with the help of bank employees they recruited for the operation, and using the data to manufacture and cash thousands of fake checks.
The investigation, led by the Identity Theft Unit of the District Attorney's Office and the Special Frauds Squad of the New York City Police Department, revealed that starting as early as December 2007, the two alleged ringleaders, Jasper Grayson and James Malloy, organized and oversaw the criminal operation from their apartments in the Bronx. They collected and stored personal and bank account information to be used to produce counterfeit checks.
The alleged criminals "regularly acquired the necessary data to generate counterfeit checks with the help of bank employees recruited to participate in the operation," states the DA's office. These employees, often tellers, had access both to the banks' computer systems and to large numbers of valid checks processed during legitimate customer transactions. In return for cash, the recruited tellers photocopied valid customer checks and printed out copies of customer profiles, which contained the customers' names, addresses, social security numbers, bank account numbers and account balances.
Prosecutors said at least 17 banks were targeted, and at least 1,017 counterfeit checks were deposited in Manhattan branches. They said the probe revealed fraud at JPMorgan Chase & Co exceeding $1.446 million and "substantial fraud" at three other banks, HSBC Holdings, Toronto-Dominion Bank and Wachovia, (part of Wells Fargo & Co.)
Some of the other financial institutions affected by this criminal group's check fraud are Bank of America, Citibank, Capitol One Bank, Washington Mutual Bank, EAB Bank, Banco Popular, Amalgamated Bank, M & T Bank, Sovereign Bank, First National Bank, United Bank, Citizens Bank, and Fleet Bank. The extent of the theft from these banks is still under investigation, say prosecutors.
About 350 of the 500 compromised accounts were those of New York City's police department, board of education, finance department, housing authority and transit authority, as well as corporate accounts of Bed Bath & Beyond Inc, designer Diane von Furstenberg, Cablevision Corp's Madison Square Garden and several hospitals, prosecutors state in the indictment.
When Grayson and Malloy were arrested in February, they were found in possession of laptop computers that held evidence of the fraud. Grayson's laptop contained check-making software, information on more than 286 bank accounts, templates of counterfeit checks which had been cashed at various banks, and the names and addresses of more than 950 check cashers or "soldiers." Malloy's laptop contained check-making software, stolen bank account information, copies of stolen customer profiles from banks, and hundreds of corporate logos and signatures, which matched counterfeit checks cashed in Manhattan and throughout the New York City metro area.
Inside Malloy's and Grayson's apartments police also found blank check stock, stolen customer profiles from various banks, payroll stubs, copies of legitimate checks, hundreds of counterfeit checks, ledgers with names of soldiers and amounts stolen on various dates, check-making software, fake state identification cards and credit cards issued in the names of identity theft victims. Prosecutors say that members of the group called Grayson's apartment "The Lab."
Prosecutors say the alleged crimes took place between October 2007 and February 2009. Most of the 18 accused were charged with grand larceny, and all were charged with conspiracy and scheming to defraud.