A well-organized crew of scam artists gamed the system to steal more than $1 million from TD Bank through casino cash machines, Manhattan prosecutors charged Wednesday.
And although nearly 100 people have been indicted, the fraud isn’t over.
“We believe the activities are continuing to this day,” Assistant District Attorney Sharon Applebaum said at an arraignment.
The ringleaders recruited people to open checking and savings accounts and get ATM cards at TD branches, officials said.
The suspects would deposit a bad check from another bank into a savings account and make a telephone transfer of those funds to the checking account.
Using the banking-by-phone option allowed immediate access to the cash — which otherwise would not be available until the check had cleared.
The recruiters allegedly took the account holders to casinos in Atlantic City, N.J., and at Foxwoods in Connecticut, always stopping at McDonald’s or Starbucks on the way.
The helpers showed ID to use casino ATMs with high or no withdrawal limits and took out thousands of dollars. The recruiters gave them a few hundred bucks for their trouble.
“This isn’t brain surgery,” said Manhattan District Attorney Cy Vance. “They found a seam where the bank permitted money to be withdrawn.”
The indictments document $450,000 in illegal withdrawals, but prosecutors said the final loss could be as much as $1.6 million.
“We haven’t been able to find out where the money is,” Applebaum said at an arraignment for Joel Luciano, 30, who is charged with depositing 25 bad checks.
“Mr. Luciano was one of the three main people in this conspiracy — the masterminds, if you will,” Applebaum told the judge.
Luciano, who has a rap sheet that includes a homicide charge from 2004 and a reckless driving arrest from July, pleaded not guilty.
Manhattan Supreme Court Justice Daniel Conviser questioned why TD Bank allowed the money to be withdrawn before the checks cleared.
“It’s just a glitch, if you will,” Applebaum said.
TD Bank spokeswoman Rebecca Acevedo did not say if the company had moved to prevent the loophole from being exploited in the future.
“What I want consumers to know is that no customer data was ever compromised,” she said in a statement.
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