NEW YORK, May 27 (Reuters) - Prosecutors in New York said on Wednesday they have indicted 18 people for operating a bank fraud and identity theft scheme that resulted in the cashing of more than 1,000 counterfeit checks at several large banks.
The 227-count indictment announced by Manhattan District Attorney Robert Morgenthau accused the defendants, most of whom live in the Bronx, of collecting customers’ personal data with the help of bank employees they recruited for the operation, and using the data to manufacture thousands of fake checks.
Prosecutors said at least 17 banks were targeted, and at least 1,017 counterfeit checks were deposited in Manhattan branches. They said the probe revealed fraud at JPMorgan Chase & Co (JPM.N) exceeding $1.446 million and “substantial fraud” at three other banks: HSBC Holdings Plc (HSBA.L), Toronto-Dominion Bank (TD.TO) and Wachovia, now part of Wells Fargo & Co (WFC.N).
Among the roughly 350 compromised accounts were those of New York City’s police department, board of education, finance department, housing authority and transit authority, as well as corporate accounts of Bed Bath & Beyond Inc (BBBY.O), designer Diane von Furstenberg, Cablevision Corp’s CVC.N Madison Square Garden and several hospitals, prosecutors said.
The alleged crimes took place between October 2007 and February 2009. Most of the defendants were charged with grand larceny, and all were charged with conspiracy and scheming to defraud, prosecutors said. (Reporting by Jonathan Stempel, editing by Gerald E. McCormick)