EAST LANSING, Mich. – At least 11 students at the University of Michigan who are also members of the $1.2 billion MSU Federal Credit Union face money laundering and other charges resulting from a scheme to defraud the CU through the CU's ATMs.
An executive with the CU explained that the scheme involved MSU student members selling their ATM cards and personal identification numbers which were then used to deposit bogus checks in the students' accounts. The fake deposits would then be followed by significant withdrawals.
The CU's tellers deserve credit for catching the scheme, noting how many student transactions for relatively large amounts were popping up in either the ATMs on campus or campus branches.
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The students were recruited into the scheme by two individuals who may or may not have been students, according to Joyce Banish, a vice president with the CU. The recruited students then recruited others so there was almost a pyramid structure of fraud, she said.
"I think the students were aware this was a wrong thing to do," Banish said, "I am just not sure how many of them realized how wrong it was or that they would be facing money laundering charges."
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