Seven Brooklynites indicted on charges of fraud for elaborate money order scheme

Seven Brooklyn residents have been indicted on various charges for their role in a scheme to deposit the same United States Postal Service money orders into multiple bank accounts fraudulently, while cashing the physical money orders at the same time, announced Acting Brooklyn District Attorney Eric Gonzalez on Thursday, April 13.

According to the indictment, from about June of 2014 to March of 2016, the defendants purchased the money orders in amounts generally ranging from $700 to $1,000 at post offices throughout the borough (plus one instance in which $12,000 in money orders was purchased). The group then allegedly recruited a total of 47 bank account holders to relinquish control of their accounts – including their debit cards and PIN numbers from TD Bank, Santander and Bancorp – for a cash reward.

The defendants would then allegedly deposit the purchased money orders into the compromised bank accounts through an app offered by each of the financial institutions, successfully in many instances, writing the respective account holder’s name as the money order payee in pencil and erasing the information afterwards, in order to facilitate another fraudulent deposit.

According to the indictment, the group would then withdraw the money, and continue to cash the money orders at Brooklyn post offices, without disclosing that the money orders had previously been deposited.

Based on the face value of the money orders, the defendants – who live in Ditmas Park, Flatbush, East Flatbush and Flatlands — allegedly stole approximately $74,951, $36,369 and $7,300 from TD Bank, Santander Bank and Bancorp, respectively.

“These defendants allegedly engaged in an intricate scheme to steal thousands of dollars from financial institutions and exploited a loophole in mobile electronic bank deposit applications,” said Gonzalez. “These losses turned into financial costs are ultimately passed onto bank customers. My office will continue to work closely with the United States Postal Service to remain vigilant in the face of crime which capitalizes on changing technology.”

“Mobile check deposit schemes are one of many fraud schemes gaining popularity in recent years. These schemes present a real challenge for financial institutions and law enforcement,” added United States Postal Inspector in Charge Philip Bartlett. “Customer convenience is easily exploited by fraudsters. Postal inspectors and their law enforcement partners aggressively investigate crimes that steal money from financial institutions and damage the USPS brand.”

The defendants have been indicted on charges of second-degree grand larceny and first-degree scheme to defraud, among others.

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