MANHATTAN (CN) – Two Bronx men and 16 others have been charged with running an identity theft and counterfeit check ring that cashed millions of dollars in bogus checks with the help of bank tellers throughout the city. The two leaders allegedly used 950 “soldiers” to deposit and cash counterfeit checks from bank accounts belonging to schools, hospitals, churches and businesses – including the Police Department.
Jasper Grayson and James Malloy, both 26, were the alleged masterminds behind the $2 million scheme that claimed 500 victims over two years, according to the District Attorney’s 227-count indictment.
Grayson and Malloy hired bank employees, often tellers, to photocopy paychecks they handed and print out copies of customer profiles, including names, addresses, Social Security numbers, account numbers and balances, prosecutors said. The tellers allegedly gave the information to the ringleaders, who created the fake checks using specialized computer software and company logos found on the Internet.
The two men also employed “recruiters,” or “soldiers,” who were responsible for finding people to cash or deposit the counterfeit checks, according to the indictment.
The recruiters provided the soldiers’ real name and address to Grayson and Malloy so the checks could be produced with the soldier as the payee, according to the DA. The two made the phony checks in their Bronx apartment, known as “the lab.”
“The group targeted nearly every financial institution with a retail presence in Manhattan,” said District Attorney Robert Morgenthau. But JP Morgan Chase, HSBC, Wachovia and TD Commerce were the focus of the indictment.
Law enforcement officials say their investigation has revealed fraud against JP Morgan exceeding $1.4 million. The bank has cooperated with authorities.
Three former tellers – one each from Chase, HSBC and TD Banks – were among those arrested.
Grayson and Malloy were arrested in a car outside one of the targeted locations,. Both men had laptops containing information on more than 286 bank accounts, templates of counterfeit checks that had been cashed and the names and addresses of more than 950 soldiers, prosecutors said
A search warrant executed at “the lab” allegedly turned up check-making software, stolen customer profiles, hundreds of counterfeit checks and fake ID cards and credit cards in the names of the identity theft victims.
The seized computers showed that the group deposited more than 1,000 counterfeit checks at Manhattan banks, drawn on 350 checking accounts, according to the indictment.
All of the defendants have been charged with conspiracy and scheming to defraud; most also face grand larceny charges.
Morgenthau said many others could still face charges.
Among the victims of the fraud were Madison Square Garden, Mount Sinai Hospital and School of Medicine, the city Department of Education and the Cathedral of St. John the Divine.