Fraud Ringleader Who Victimized CUs, Banks Faces Sentencing

The leader of a check fraud ring that led to losses of up to $550,000 at credit unions and banks across four states is expected to be sentenced in March, according to federal prosecutors in Mobile, Ala.

Arrington Jaylun Gardner, 21, of Semmes, pleaded guilty to one felony count of bank fraud and one felony count of aggravated ID theft on Dec. 6 in U.S. District Court in Mobile, according to court documents. What’s more, eight members of the fraud ring also pleaded guilty to bank fraud and are scheduled to be sentenced next year. Court proceedings against three other coconspirators are pending.

After securing a search warrant for Gardner’s apartment, federal investigators found dozens of counterfeit checks and other checks stolen from the U.S. mail; several stolen and phony drivers’ licenses, some of which had Gardner’s photo on them; blank check stock paper and printers commonly used to produce bogus checks; a money counting machine and more than $2,500 in cash.

From December 2021 to May 2022, the fraud ring stole business mail that contained checks and used them to forge phony checks. They also stole driver’s licenses and other identifying documents of other persons, including documents containing their names, addresses, bank account numbers and signatures.

Some of the co-conspirators of the fraud ring used social media to recruit others with credit union and bank accounts along with debit and credit cards. Court documents showed that at least three members of the fraud ring held accounts at the $156 billion Navy Federal Credit Union in Vienna, Va.

The fraudsters deposited fake checks with forged signatures at ATMs and mobile apps, and then withdrew cash at credit union and bank ATMs throughout Alabama, Georgia, Mississippi and Louisiana, according to court documents. The fraud ring also used a mobile payments application, Cash App, to transfer funds.

Court documents also showed surveillance photos of Gardner making fraudulent deposits and withdrawals at Navy Federal ATMs in Brookhaven, Ga., and D’Iberville, Miss., and at a Wells Fargo ATM in Daphne and Mobile, Ala., and at a Regions Bank ATM in Mobile.

Gardner also used a debit card of one of the co-conspirators to make 18 individual “cash back” transactions at a Walmart in Mobile.

In addition to Navy Federal, the fraud ring targeted the $439 million Navigator Credit Union in Moss Point, Miss., and the $2.3 billion Pen Air Federal Credit Union in Pensacola, Fla., which operate branches in Alabama, according to court documents. The fraud ring also targeted 15 local and national banks.