7-Plus Years in Prison for Fraud Ringleader Who Stole Millions From Credit Unions

A California man who led a nine-person conspiracy ring that stole more than $2.7 million from credit unions and banks was sentenced to 87 months in federal prison, the U.S. Attorney’s office in Los Angeles said.

During an Aug. 19 sentencing hearing, U.S. District Court Judge John F. Walter also ordered Carlos Corona, 37, of South Los Angeles to pay restitution of $2,722,632. During the three-year scheme facilitated through social media, Corona and nine co-conspirators intended to cause at least $5.3 million in losses to the $6.7 billion Kinecta Federal Credit Union in Manhattan Beach, Calif., the $177 billion Navy Federal Credit Union in Vienna, Va., the $30.8 billion SchoolsFirst Federal Credit Union in Tustin, Calif., Bank of America, Citibank, Wells Fargo, Morgan Chase Bank, and U.S. Bancorp.

Corona pleaded guilty in May to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.

From October 2020 to August 2023, Corona and nine co-conspirators engaged in an elaborate bank fraud scheme using third-party credit union and bank accounts and stolen checks. Some co-conspirators stole checks from the U.S. mail stream, including from post office mail collection boxes located outside post offices.

After they stole the checks, the co-conspirators solicited credit union and bank account holders through Instagram to provide their debit cards and account information, promising these account holders a cut of any fraudulent funds deposited into their accounts.

To circumvent the fraud protections of credit unions and banks, Corona and co-conspirators specifically looked for people who had their credit union and bank accounts open for five years or longer because it allowed the criminals quicker access to the stolen funds, according to prosecutors.

Credit union and bank account holders who responded to the Instagram ads provided their bank account numbers, PIN numbers, debit cards and online banking log-in information to the fraud ring members.

Corona and other co-conspirators exchanged the credit union and bank account holders’ information with each other, and then they deposited the stolen checks into these credit union and bank accounts. In most cases, the stolen checks were falsely endorsed in the original payee’s name. Sometimes, the checks were washed or altered to make the payee’s name correspond to the bank account into which the checks were being deposited, according to court documents.

Corona and others then rapidly depleted the fraudulently deposited funds from credit union and bank accounts by making cash withdrawals, electronic transfers, and debit card purchases.

To conceal the fraud, the criminals instructed account holders to claim that their accounts had been compromised when credit unions and banks contacted them about the fraudulent deposits.

Federal prosecutors did not say how many credit union and bank account holders participated in this scheme.

Two of the co-conspirators Jose Luis Edeza Jr. and John Wesley Bess Jr., who each pleaded guilty to bank fraud and conspiracy to commit bank fraud in July, were sentenced to 57 months and 70 months in federal prison, respectively, according to court filings.

Other co-conspirators, Richard Ochoa Jr., Salvo Solares, and Carlos Luiz Arellano each pleaded guilty to conspiracy to commit bank fraud, and Sofia Genesis Alvarez pleaded guilty to bank fraud and conspiracy to commit bank fraud. They are scheduled to be sentenced in September, court records showed.

Additionally, Karen Vanessa Martinez, pleaded guilty to money laundering and is expected to be sentenced in September; Vanessa Cortes Arzate, who also pleaded guilty to money laundering, was sentenced to eight months in prison, and Richardo Wilfredo Nicholson, who pleaded guilty to conspiracy to commit bank fraud, was sentenced to three years’ probation.