Four defendants were arrested and charged in a $700,000 bank fraud case for a scheme in which they allegedly emptied their own bank accounts at ATM machines, reported the ATM cards lost or stolen, and then had the banks replace the money — and several of the targeted ATMs were along Court and Montague streets, a DA spokesman confirmed.
The banks included HSBC, Chase and Signature Bank.
The three men and one woman are charged with stealing $422,000 over five years by exploiting Federal Reserve Board Regulation E, which governs electronic banking and requires banks to reimburse accounts of customers who claim their ATM cards have been used without their permission, according to a press release issued Tuesday by the Brooklyn District Attorney, Charles Hynes. The defendants allegedly made false claims totaling $700,000.
“These defendants corrupted a law created to help fraud victims and used it to facilitate a tremendous fraud of their own,” Hynes said in a statement. “But as in any criminal undertaking in Brooklyn, they should have known they would be caught eventually.”
Attorneys for the defendants — Eric Manganelli, 36; Lam Dang, 37; John Tluczek, 37; and Marzena Tluczek, 35 — said their clients pleaded not guilty, according to the New York Times.
The Daily News breaks down the scheme:
Beginning in 2003, Eric Manganelli, Lam Dang, John Tluczek, and Tluczek’s wife, Marzena Tluczek, deposited money in bank accounts across the city, taking out something like $20 legitimately to start things up, waiting a week and then taking out $500 to $1,000 a day until the account was empty.
They would then report missing or stolen cards and pin numbers, sometimes giving “excuses” that were at times “absolutely absurd,” Assistant District Attorney Karen Turner said.
In 2008, Manganelli reported he lost a slew of cards and a computer spreadsheet of PIN numbers when he went to his safe-deposit box and left them on the examining room table, Turner said.
The scam depended on Regulation E and Manganelli, 36, a well-connected lawyer who boasted on one Web site of having been a “high-ranking member of political campaigns,” often wrote threatening letters to banks asking for their money.
Manganelli and John Tluczek, 35, met at Xaverian High School in Bay Ridge, Brooklyn, where Manganelli was valedictorian, prosecutors said. They met Dang, 37, who is a financial consultant, when they went to NYU.
The scheme came to light after an investigator at Wachovia Bank called another bank and began comparing notes.
And, according to Hynes:
In each case, the defendants opened accounts and padded them with large deposits, over the course of several months. Later, the indictment charges, they drained the accounts, with withdrawals of $500 to $1,000 per day. Once the accounts were empty, the defendants would contact the bank and say their ATM cards had been stolen or lost and that the withdrawals were unauthorized. After the banks reimbursed the “stolen” money, the defendants would close the accounts, according to the indictment.
Occasionally, large purchases were made, instead of withdrawals, but in those cases too, the cards were later reported stolen and the purchases, unauthorized.
In most cases, surveillance photos show the withdrawals made by people dressed in pants, jackets, and motorcycle helmets — even in the middle of the day in July — but in other cases the faces of the people taking out the cash were obscured in other ways, such as in hoods or covered by masks.