New York prosecutors have indicted 18 people for operating an identity theft and bank fraud scheme that saw counterfeit cheques used to steal at least $1.4 million from hundreds of victims.
The 227-count indictment accuses the defendants of paying bank tellers to help them obtain the personal and account information of 500 victims, including private individuals, corporations, religious institutions, hospitals, and schools, as well as city and state government agencies.
Manhattan District Attorney Robert Morgenthau says the tellers photocopied valid customer cheques and used bank computer systems to obtain customer profiles, which contained names, addresses, social security numbers, bank account numbers and account balances.
The gang are accused of using this information to manufacture thousands of counterfeit cheques which were then cashed and deposited.
Over $1.4 million was stolen from JP Morgan Chase whilst preliminary investigations have exposed "substantial fraud" at TD/Commerce, Wachovia and HSBC. Over a dozen other banks are thought to have been affected.
Authorities began an investigation last year after hundreds of counterfeit cheques were cashed at various commercial banks and cashing stores in Manhattan.
They say that from as early as December 2007 gang ring leaders, Jasper Grayson and James Malloy organised and oversaw this criminal operation from their apartments in the Bronx
Grayson and Malloy created the cheques using specialised computer software, scanners, printers, cheque stock, magnetic ink and company logos found on the Internet.
Hired "soldiers" would be named as payees on the fake cheques and would cash them.
In February Grayson and Malloy were arrested while in a car and in possession of laptops. Grayson's contained cheque-making software, information on over 286 bank accounts, templates of counterfeit cheques which had been cashed at various banks, and the names and addresses of over 950 "soldiers".
Malloys's contained cheque-making software, stolen bank account information, copies of stolen customer profiles from banks, and hundreds of corporate logos and signatures, which matched counterfeit cheques cashed in Manhattan and throughout the New York City metropolitan area.
Searches at five locations, including Grayson's apartment which gang members called "the lab", uncovered more equipment.
All of the defendants have been charged with conspiracy and scheming to defraud, with most also facing grand larceny charges.