Large-Scale Fraud Siphons More Than $1.6 Million From CU Members' Accounts

Last February, a Pennsylvania man allegedly posted a social media video that showed him standing outside of a branch of the $7.1 billion Members 1st Federal Credit Union (MFFCU) with this caption: ONLY TAKING 7 SO IF YOU GOT ACTIVE MEMBERS 1st DM ME FOR GUARANTEED FUNDS. The suspect also posted other social media videos and images on his wall or story to recruit individuals with accounts at the Enola, Pa.-based credit union, Bank of America, Citizens Bank and other financial institutions, according to a criminal complaint that described a large-scale and elaborate fraud scheme that involved 13 persons who stole more than $1.6 million from member accounts.

Two of those persons, Tyreese Lewis, 22, and Carl A. Gonzalez, 19, were arrested and charged in July and August, respectively, with numerous counts of corrupt organizations, identity theft, bank consumer impersonation, access device fraud, computer trespass and related offenses, according to Pennsylvania’s Attorney General office.

State police launched their investigation in September 2022, which alleged that Lewis, Gonzalez and others used their social media sites to search for individuals with credit union and bank accounts in exchange for money. According to the criminal complaint, some of these accounts bought by the fraudsters were used as funnel accounts to move money stolen from members’ accounts and to conceal the fraud.

“As part of our commitment to the safety and soundness of our members, associates in our top-tier Fraud Department at Members 1st Federal Credit Union engage seamlessly with law enforcement agencies every day. Their collaboration is integral to the collective effort to stop the actions of fraudsters,” MFFCU said in prepared statement. “We are pleased that our commitment to sharing information and cooperating with law enforcement played a pivotal role in the apprehension of these two suspects. No 1st Federal Credit Union member incurred a financial loss due to these scams. The security, safety and well-being of our members remain our highest priority. We are continuing our ongoing efforts to educate our members and enhance fraud monitoring and implement additional security measures aimed at safeguarding our valued members.”

Lewis, Gonzalez and others allegedly impersonated employees of the MFFCU fraud department to siphon funds from members’ accounts. In addition, Lewis promoted “how to scam” lessons starting at $250 on a social media site.

Last January, MFFCU Corporate Security identified multiple members who received vishing phone calls from the suspects who used approximately 30 spoofed phone numbers that were made to appear as if they were coming from the credit union. Vishing is the use of fraudulent phone calls to trick individuals into revealing personally identifiable information (PII).

The members reported being asked to provide their PII, online banking username and password, debit card number and the two-factor identification code that was sent to them while on the phone with the impersonators. After members were locked out of their accounts, the impersonators allegedly transferred large dollar amounts out of members’ accounts into other MFFCU secondary accounts, or funnel accounts, which the suspects used to conceal the source of the fraudulent funds.

The money was withdrawn at MFFCU branches and ATMs in Cumberland, Dauphin and York counties, cash advance transactions at casinos, or through peer-to-peer financial transaction mobile apps such as Zelle or Cash App.

“As of July 14, 2023, MFFCU has identified 342 vishing victims and approximately 449 funnel accounts, (into) which the fraudulent funds were transferred,” according to the criminal complaint. “Once the funds were moved to the funnel accounts, they were withdrawn via cash or through peer-to-peer transfers. In some instances, the funds were transferred into a secondary funnel account. The total funds transferred from the vishing victim accounts is $1,669,641.39. MFFCU Security Department was able to prevent additional loss and recover a portion of funds for the victims.”

In addition to MFFCU, the criminal complaint showed the fraudsters allegedly stole more than $32,000 from customers at Citizens Bank and targeted customers from PNC Bank, Truist Bank, Bank of America and other financial institutions.

The fraud ring also allegedly ran a credit/debit and gift card theft scheme.

READ MORE: The Criminal Complaint.