It’s the dirty secret in banking. Bank employees often steal personal account information from bank customers so as to rob money from bank accounts or commit fraud via identity theft, bank employees tell FOX Business. Few banks seem immune.
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Ten clients at Citizens Bank and Commerce Bank, as well as 25 Prudential Insurance customers in Lehigh County, Penn. either had money stolen from their bank accounts or fake credit cards set up in their name by thieves in an identity theft ring that included a Commerce bank teller, a former Citizens Bank manager, and a Prudential Insurance employee. The ring operated out of the Philadelphia area from 2006 through 2012. The former bank and insurance employees have pleaded guilty to aiding and abetting bank fraud and identity theft, and face time in prison.
A former Regions Bank worker in Birmingham, Ala. was indicted in 2010 for setting up a fake Capital One credit card in a customer’s name in order to use the plastic for his own expenses. Wash Taylor Coleman, Jr., also made unauthorized cash withdrawals from accounts of three Regions customers, including the client whose identity he had stolen to set up his Capital One credit card.
Another former Regions Bank employee, Kimbriuna Dyer, was part of an identity theft ring that stole money from accounts out of one of the bank’s Memphis, Tenn. branches. The stolen money was then used to buy thousands of dollars’ worth of goods.
Regions Bank had no comment for either instance.
And now, the U.S. Second Circuit Court of Appeals Wednesday reversed the dismissal of a lawsuit brought by a JPMorgan Chase Bank customer, who says the financial giant must be held liable for an identity theft committed by former workers who allegedly were part of a ring that facilitated an estimated $77 million Medicare fraud via her stolen identity. The lawsuit from bank customer Yelena Galper seeks to hold Chase liable for this identity theft Under the New York Fair Credit Reporting Act. Chase did not return calls seeking comment.
"All the places that have your Social Security number, all present potential of identity theft," said Richard Goldberg, chief of economic crimes at the U.S. attorney's office in Philadelphia.
The banking industry’s human resources divisions try to stop insider identity theft by screening out potential hires and conducting extensive training. But bank and law enforcement officials warn that any outfit you give your personal identity information to may employ workers who could steal your information. That even includes the IRS.
A former IRS employee in Austin, Tex. stole personal information from taxpayers so as to file fraudulent returns and pocket the refund money. Kenneth Goheen had worked for the IRS as a Tax Examining Technician. He confessed to stealing Tax Identification Numbers (TINs) from taxpayers. Goheen then used the TINs to file more than 50 fake tax returns from 2013 to 2015. He then got fraudulent refunds of over $120,000. Goheen was sentenced on August 26 to two years in prison.
Law enforcement also busted up an identity theft ring that included Viririana Hernandez, a former IRS worker in Fresno, Calif. Hernandez had allegedly conspired with three others to steal personal information not just of taxpayers, but fellow IRS employees, the Justice Dept. says. They then opened fake credit cards in the victims’ names or added themselves as “authorized users” on the victims’ existing accounts. The ID theft ring stole identity information from about 160 victims and attempted fake credit card charges of more than $1.2 million over two years, the Justice Dept. says.
Back to JPMorgan Chase customer Yelena Galper. The Second Circuit Court of Appeals in New York yesterday said Galper can proceed with her law suit against JPMorgan Chase Bank. Her suit says former bank workers were involved in an identity theft ring that scammed Medicare using her bank accounts.
In her suit, which seeks $10 million in damages, Galper says the banking giant should be held liable in the theft of her personal identity information. Galper alleged Chase employees stole her identity and used it to further a $77 million Medicare money laundering scheme. Specifically, Galper said in her complaint that three New York City-based Chase employees — a branch manager, a business account manager and a teller — conspired to open business, checking and saving accounts in her name so as to conceal proceeds from a Medicare fraud scheme operated by several medical clinics in the city.
Galper also goes so far as to charge in her complaint that the bank actually paid for the legal defense of its employees and did not take any disciplinary action against them. The three workers are not parties to Galper's suit.
“In participating in and facilitating the money laundering scheme, [the Chase] employees acted within the scope of their employment and for the benefit and profit of Chase,” Galper’s complaint says. “Thus, Chase is liable for the illegal conduct the ... employees.”
According to the suit, Galper said the bank employees helped the owners of three New York City area health care clinics set up shell companies. In September 2009, the alleged money launderers opened three accounts for the companies at Chase Bank. The accounts, however, falsely named Galper, a Chase customer, as president of the companies and the signatory on the accounts. Her suit also alleged the launderers and the bank employees used Galper’s dormant personal Chase checking account to carry out their fraud. The bank employees allegedly changed bank records to make it look as if Galper made transactions on the accounts used in the fraud, even though she had no knowledge of the scam.