State authorities on Friday disclosed what they say was a widespread bank-fraud operation in Central Pennsylvania that drained nearly $2 million from the accounts of victims.
- Two men have been arrested in connection with the fraud but a criminal complaint lists nine other people.
- More charges are expected, according to the Pennsylvania attorney general’s office, which is prosecuting the case.
- The suspects allegedly used phone calls to trick hundreds of customers into thinking they were talking to bank employees, took money from customers’ accounts, and diverted funds into other accounts before withdrawing the money in a variety of ways, including gift-card purchases, peer-to-peer payment platforms like CashApp and Zelle, and ATM withdrawals in Cumberland, Dauphin, Lancaster and York counties.
- The charges include theft, access device fraud and identity theft.
Who was targeted: Multiple financial institutions, including credit unions like Harrisburg-based PSECU and large banks such as Bank of America, Chase Bank, M&T Bank, PNC Bank, Truist and Wells Fargo, according to a criminal complaint filed by Pennsylvania State Police.
- Much of the initial complaint focuses on alleged theft from Members 1st Federal Credit Union, based in East Pennsboro Township, Cumberland County.
- According to the complaint, suspects stole more than $1.6 million from the accounts of Members 1st customers. The credit union’s security department has recovered more than $500,000 of the total so far.
- No credit union members lost any money, according to a statement from Members 1st, which said it cooperated with law enforcement during the investigation.
- “The security, safety and well-being of our members remain our highest priority,” the credit union said. “We are continuing our ongoing efforts to educate our members and enhance fraud monitoring and implement additional security measures aimed at safeguarding our valued members.”
- State police investigators said they expect the loss amounts to grow as they secure records from other financial institutions.
How did it work: It appears to have started with phone calls to customers from people impersonating bank or credit union employees and spoofing actual corporate phone numbers, a form of fraud known as “vishing.”
- The suspects allegedly used information taken from the customers to get into their accounts and move money to other accounts at the same institution, known as funnel accounts.
- The funnel accounts were held by people recruited via social media posts and paid a portion of the stolen funds when they were withdrawn.
- The posts on Facebook, Telegram and other platforms sought out people with accounts at specific financial institutions, according to the complaint.
- One suspect posted a video while outside a Members 1st branch with the caption, “ONLY TAKING 7 SO IF YOU GOT ACTIVE MEMBERS 1st DM ME FOR GUARANTEED FUNDS,” according to state police investigators.
- “Terminology such as ‘tap in’ was used on the posts, which indicates the follower should contact the user directly if they have an account or multiple accounts to be used,” investigators wrote. “The follower may or may not be aware that they are participating in a scam during the initial contact.”
- The purpose of the funnel accounts was to conceal the source of the fraudulent funds, according to investigators.
- Police became aware of the fraud after they began looking into the suspects’ “suspicious” bulk purchases of Visa gift cards at retail stores in Central Pennsylvania.
The reminder: In its statement, Members 1st reiterated the anti-fraud advice dispensed regularly by financial institutions.
- “Your financial institution will never contact you to solicit your online banking credentials or security codes by email, text or phone. If this happens, end the conversation and contact your credit union or bank at a known and verified telephone number or email address. Additionally, we encourage everyone to regularly review their account activity and use account alerts for both online banking and credit card monitoring. The vigilant consumer is often the best line of defense against fraudulent activities.”
