An agency inside the Treasury Department has issued an alarming warning to all U.S. banks about a fraud scheme involving organized gangs, newly hired bank tellers, and identity theft. In the simple scheme, gang members use “friendly” tellers to cash forged savings account withdrawals from innocent victims. While the alert is just 24 hours old, MSNBC.com has learned the loosely organized gangs have been operating for at least a year.
THE TREASURY DEPARTMENT’S Office of the Comptroller of the Currency distributed the alert widely, sending it to all national banks, all state banking authorities, and several other federal banking officials.
A spokesperson at the Office of the Comptroller of the Currency, which regulates national banks, confirmed the alert was issued Thursday, but said he couldn’t provide further comment.
The scheme is decidedly low-tech, with gang members drawing up fake withdrawal slips against stolen bank account numbers. But there’s a twist: the forged withdrawals are often cashed by recently hired bank employees — individuals who have been “planted” at the bank by the gang.
The alert urged banks to “exercise care and due diligence” in their hiring practices. Gang members are paying cooperative tellers several hundred dollars for each transaction, the alert said.
But apparently, not all the tellers are cooperating willingly. Some already-employed tellers have faced “coercion and threats of bodily harm,” to persuade them to assist them in the fraud scheme, the alert says.
Typically, the gang member gives the faked withdrawal information to the teller before the teller goes to work. This keeps the gang member out of the bank, and away from bank cameras.
Later, the teller keys the information into the bank’s automated systems so it will appear as if the victimized customer actually visited the teller window. The withdrawals are small enough to not raise bank suspicions.
“As a result, detection is delayed until the victimized customer reports the fraud,” the alert said.
Rob Douglas, CEO of the American Privacy Consultants, has spent several years doing Identity Theft training for the American Bankers Association. He told MSNBC.com he first heard about the scheme a year ago from banking employees who were students in his class.
“It’s been going on at least that long,” he said. “People in the class were saying things like, ‘We’ve had problems with people approaching tellers.’ ... It is not the most common method (to steal from banks), and it can be laborious, but if you can develop inside contacts, it works.”
In some cases, organized crime rings are turning away from drugs and toward financial crimes, he said, because they are just as lucrative and not as dangerous. The Treasury release hints at that, too.
“Organized gang activity has become more sophisticated and the sphere of influence of some gangs has expanded geographically,” says the alert.
Douglas said many banks are at risk from this kind of scheme because tellers are often young and underpaid.
“Banks are putting up fancy firewalls and computer security systems, and then most banks’ entire security system, comes down to the lowest paid employees: the tellers and the janitorial service,” he said.