18 arrested in bank fraud bust

May 27, 2009 3:40:29 PM PDT
A $4 million ring that allegedly deposited thousands of counterfeit checks into hundreds of commercial bank accounts was busted with more than a dozen arrests. The Manhattan district attorney says 18 people were indicted for operating the identity theft and bank fraud scheme.

DA Robert Morgenthau says the case involves commercial banks in Manhattan, and thousands of counterfeit checks. He says there were hundreds of victims.

Authorities say 25-year-old James Malloy, of the Bronx, was the master forger in the ring, which allegedly manufactured fake business checks and then deposited them in newly opened accounts. The suspects, who include bank workers, then withdrew the cash from the accounts.

Molloy, who has a previous federal conviction for counterfeiting, apparently used magnetic ink and high-stock paper to make his own checks. He was out on bail awaiting sentencing when he allegedly committed the new crimes.

The scam reportedly fell apart when the suspects forged checks on an NYPD account last May. The NYPD's Property Clerk's Office notified the Special Fraud Squad, which began an investigation.

Along with scamming city agencies, the suspects targeted banks such as JPMorganChase and Washington Mutual.


NEW YORK AND TRI-STATE AREA NEWS

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