![]() ![]() “Over the last three years, the United States Postal Inspection Service and other federal, state, and local law enforcement agencies, have conducted this major bank fraud investigation involving ‘cracking cards.’ The charges allege that defendants knowingly deposited fraudulent checks intending to defraud banks and their customers. ![]() Fardon, United States Attorney for the Northern District of Illinois. “Our purpose today is to warn bank customers that fast cash schemes are usually too good to be true and they should always safeguard their account information, and, at the same time, we are putting those persons who engage in this type of illegal activity on notice that debit card fraud can result in serious state or federal charges, which carry severe penalties and consequences,” said Zachary T. Schemers use various methods to recruit bank customers to give up their debit cards and PINs, including approaching individuals at parties, schools, or on the street, and using social media outlets, such as Instagram and Facebook, to advertise opportunities for making fast cash by sharing a portion of the fraud proceeds. The schemes often involve numerous participants, including some individuals affiliated with Chicago street gangs, the charges allege. The banks lost money they advanced to the account holders when the customers denied responsibility for the withdrawals and purchases.Ĭracking cards schemes have become a popular method of obtaining illicit funds in Chicago and surrounding areas. The defendants then allegedly used automated teller machines or point of sale terminals at currency exchanges and retail stores to withdraw or spend funds that the banks advanced to the third-party accounts before learning that the deposited checks were bogus. Since at least 2011, the defendants and other individuals allegedly deposited counterfeit checks into banking accounts belonging to third parties who willingly or unwillingly surrendered their debit cards and PINs for use in the cracking cards schemes. District Court in Hammond, Ind., and seven are facing state charges brought by the Cook County State’s Attorney’s Office. Sixteen are facing federal bank fraud charges in Federal Court in Chicago six are facing federal charges in U.S. Department of Labor Offices of Inspector General, the Chicago Police Department, and the Sheriff’s Offices of Cook and DeKalb counties began arresting the defendants yesterday. Postal Inspection Service, FBI, IRS Criminal Investigation Division, FDIC and U.S. Six Indiana defendants include four men who are part of a group that has posted Internet rap videos referring to the cracking cards scheme and displaying large amounts of cash and expensive items, according to the charges announced today.įederal agents and local law enforcement officers from the U.S. CHICAGO - Twenty-nine northern Illinois and Indiana defendants are facing state or federal charges following a coordinated investigation of “cracking cards,” a scheme that costs banks millions of dollars and has its roots on Chicago’s south side and is spreading to other cities through rap music and social media.
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