94 Indicted in Fraud Scheme

Crime Ring Accused of Stealing $450,000 from TD Bank
94 Indicted in Fraud Scheme
A simple savings and checking-account deposit and transfer scam, which resulted in the theft of more than $450,000 from TD Bank, is believed to have exploited basic weaknesses in the bank's funds-availability practices.

The Manhattan District Attorney's Office announced Wednesday that 94 individuals had been indicted for their roles in the scheme, which between August 2009 to May 2011 relied on the deposit of cold checks and transfers between savings and checking accounts at TD Bank.

The crime ring - allegedly led by two Bronx men and one suspect whose address remains unknown - is accused of opening more than 90 bank accounts at TD Bank to deposit bad checks and later withdraw funds before TD learned the deposits had bounced.

Traditionally, funds are not available until deposited checks clear; but the transfer of funds via telephone from savings accounts to checking accounts allowed immediate access, prosecutors say - a process the recruiters exploited.

The indictments claim the defendants then withdrew the funds from ATMs at casinos in Atlantic City and Connecticut or from Western Union offices in Manhattan. The indictments' charges include conspiracy to commit grand larceny, grand larceny and criminal possession of a forged instrument.

Joel Luciano, 30, and Freddie Mercado, 25, both of the Bronx, and Jose M. Cruz, 34, address unknown, have been charged with orchestrating the TD scam. Six other defendants working under the trio as recruiters also have been accused of playing lead roles, by allegedly hiring 85 front-liners who wrote the bad checks used to open the new TD Bank accounts.

"This case charges the entire criminal conspiracy from top to bottom, from the masterminds who organized and operated the scam to the individuals who participated to make a quick buck," says Manhattan District Attorney Cyrus Vance in a statement.

The 18-month investigation, which used video surveillance, physical surveillance, computer forensics, and analysis of credit card, banking and phone records, is ongoing.

Last month, in a separate financial-fraud case, the Manhattan DA indicted 28 suspects for their alleged connection to an organized credit-card skimming ring that recruited waiters and waitresses to steal card details from at least 50 American Express accountholders at high-end restaurants. [See NYC Card Skimming Take-down.]

About the Author

Tracy Kitten

Tracy Kitten

Former Director of Global Events Content and Executive Editor, BankInfoSecurity & CUInfoSecurity

Kitten was director of global events content and an executive editor at ISMG. A veteran journalist with more than 20 years of experience, she covered the financial sector for over 10 years. Before joining Information Security Media Group in 2010, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by CNN.com, ABC News, Bankrate.com and MSN Money.

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