17 August 2017
visit www.avoka.com

Gang charged in $400,000 ATM scam

31 July 2009  |  10463 views  |  2 atm

Authorities in New York have arrested four people accused of stealing $422,000 by exploiting a regulation requiring banks to reimburse the accounts of customers who claim their ATM cards have been used without their permission.

The four defendants - Lam Dang, Eric Manganelli, John Tluczek and Marzena Tluczek - are charged with making false claims totalling more than $700,000, to more than 20 banks, including HSBC, Wachovia and Chase.

In each case, the defendants opened accounts and padded them with large deposits over the course of several months before draining them again, with withdrawals of $500 to $1000 per day, say prosecutors.

Once the accounts were empty, the scammers would contact the bank and say their ATM cards had been stolen or lost and that the withdrawals were unauthorized. After the banks reimbursed the "stolen" money, the defendants would close the accounts, according to the indictment.

The four are accused of exploiting regulation E of the federal Electronic Fund Transfer Act, which requires banks to reimburse victims within 10 days of reporting the fraud.

Banks are then supposed to look into the validity of the claim, but in this case, the defendants withdrew the reimbursed funds before the investigations could be completed.

Prosecutors say the defendants used their knowledge of the law and the finance industry to further the fraud - Manganelli is a lawyer, Marzena and John Tluczek have both worked at various banks, and Dang is currently employed as a financial advisor.

To ensure cameras could not be used to identify them when making ATM withdrawals, the defendants wore motorcycle helmets, hoods or covered by masks.

Charles Hynes, Brooklyn district attorney, says: "These defendants corrupted a law created to help fraud victims and used it to facilitate a tremendous fraud of their own."

The defendants are charged with 23 counts of grand larceny in the third degree, 25 counts of falsifying business records in the first degree, nine counts of attempted grand larceny in the third degree, eight counts of perjury in the third degree, four counts of scheme to defraud in the first degree, and one count of attempted grand larceny in the second degree.

Comments: (2)

A Finextra member
A Finextra member | 31 July, 2009, 17:11

Great argument for requiring stronger identification (not to neccesarily be confused with authentication) for every bank customer that files a identity fraud claim! Javelin scores every major US bank and credit card issuer on their stated fraud resolution policies (using mystery shopping methods) and the data state that resolution policies are universally improving with each year. So what we have is a new vulnerability stemming from this improvment! 

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
A Finextra member
A Finextra member | 31 July, 2009, 17:41

Actually I was inspired to post a full blog re this article (viewable either on Finextra or the Javelin site)

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Police foil London ATM hijackers

Police foil London ATM hijackers

27 July 2009  |  7739 views  |  1 comments
South Africa's Absa fits ATMs with pepper spray

South Africa's Absa fits ATMs with pepper spray

15 July 2009  |  13094 views  |  2 comments
Cash machine 'jackpot' demo pulled at request of ATM vendor

Cash machine 'jackpot' demo pulled at request of ATM vendor

01 July 2009  |  12633 views  |  1 comments
Cashless ATM scam gang indicted

Cashless ATM scam gang indicted

05 March 2009  |  7121 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.abe-eba.euvisit www.worldpaymentsreport.comvisit www.niceactimize.com

Who is commenting?

Top topics

Most viewed Most shared
DBS Bank launches online car selling marketplaceDBS Bank launches online car selling marke...
9983 views comments | 13 tweets | 11 linkedin
China preps central clearing house for mobile payments providersChina preps central clearing house for mob...
9971 views comments | 8 tweets | 15 linkedin
Monzo appoints Curve co-founder Foster-Carter COOMonzo appoints Curve co-founder Foster-Car...
8305 views comments | 1 tweets | 3 linkedin
hands typing furiouslyCompliance: Overcome the data deficit
7757 views 0 | 1 tweets | 9 linkedin
PayPal buys Swift Financial to boost working capital bizPayPal buys Swift Financial to boost worki...
7697 views comments | 13 tweets | 7 linkedin

Featured job

Competitive
London, UK (or flexible)

Find your next job