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Bank teller corruption link to multi-million dollar NY cheque fraud scam

28 May 2009  |  10763 views  |  2 cheque

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.

Comments: (2)

Keith Richbell
Keith Richbell - eftpos Payments Australia Ltd. (ePAL) - Sydney | 28 May, 2009, 22:44

Call me nostalgic if you will, but this is what so facinates me about banking in America. Its as quaint as a New England gingerbread house, as amateur as a homemade birthday cake and as useless as a chocolate teapot. This is the sort of fraud Dickens might have written about and yet it still goes on in the USA. What next I wonder? Millions of counterfeit dollar bills flooding the world market because the Fed can't be bothered to invest in modern banknote security features?

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Stanley Epstein
Stanley Epstein - Citadel Advantage Ltd - Modiin | 30 May, 2009, 10:39

It is interesting to note how the Internet and the technology that is embodied in or linked to the simple PC have been co-opted for this operation. The amount of data, logos, images, texts and other material that is available on the web that can be used for such purposes in staggering. And often you need nothing fancier than a scanner, a colour printer, Microsoft's "Paint" and some basic PC skills to produce a whole range of forgeries from letter's to certificates or worse. Yet no-one seems to consider this a serious threat. We have come a long way from when the first colour Xerox came on the market and was only available to selected "risk-free" clients to today's DIY "forgery-factory-in-a-box".

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