Armed with ATM cards and a little-known federal regulation, four old college buddies corrupted a law created to help fraud victims and used it to facilitate a tremendous fraud of their own to rip off Brooklyn banks for $422,000, prosecutors said Tuesday. The scheme was as simple as it was brazen. Authorities say the suspects opened large bank accounts, padded them with deposits and then drained the accounts themselves by making large withdrawals or debit card purchases in a short period of time in order to make it seem as if a crime had occurred. The suspects all claimed someone had stolen their ATM cards to withdraw money without their permission and demanded reimbursement from the banks, according to the indictment. After the banks reimbursed them, the defendants closed the accounts.
The four, who studied finance together at NYU, exploited a banking regulation (Regulation E of the Federal Electronic Funds Transfer Act) that requires banks to repay customers who claimed their ATM cards were lost or stolen within 10 days, Brooklyn District Attorney Charles Hynes said.
Cameras caught defendants taking the money out, but they were almost always wearing motorcycle helmets or some other covering to protect their identities. Banks are meant to subsequently look into the validity of the claim, but in this case the defendants withdrew the reimbursed funds and closed the accounts before the banks could finish their investigations. The scheme came to light after one bank investigator called another bank and began comparing notes and databases. Among the banks ripped off between 2003 and 2008 were HSBC, where two of the suspects worked, Chase, and Signature Bank.
Eric Manganelli, 36, a lawyer; Lam Dang, 37, a financial consultant; and John Tluczek, 37; and his wife, Marzena Tluczek, 35, who both have worked for banks over the years, face multiple counts of grand larceny, falsifying business records and other charges.
