When a team of nine employees at the $252 million Widget Financial Federal Credit Union in Erie, Pa., beganlooking into 10 suspicious accounts in December 2012, they had noidea what they had found.

FBI and IRS investigators eventually uncovered a massive,nationwide fraud case so large, it was “on a scale that isunprecedented,” as one federal prosecutor described it.

The FBI in Pittsburgh on Wednesday announced they indicted fivepeople for allegedly stealing the personal IDs of thousands ofpeople to open thousands of bogus accounts at banks and creditunions across the nation. In some instances, the defendantsobtained the names of credit union employees from the cooperative'swebsite or lifted members' names from credit reports to meetmembership eligibility requirements, according to the FBI.

“I heard from an FBI agent last Wednesday (April 16) and hecould not congratulate us enough,” said Widget Financial President/CEO Gail J. Cook. “He said therewere many, many accounts opened across the country in exactly thesame way the conspirators did at our financial institutions, butnobody figured it out like we did.”

Read more: Credit Union Uncovers Massive Nationwide Fraud Ring

On that day, Cook assembled the team that had been involved inthe internal investigation and told them about the FBI'sfindings.

“We never expected all of this to come out from what we did,”she said.

During Wednesday's press conference, Hickton and others such asPatrick Fallon, assistant special agent in charge of the FBI'sPittsburgh field office, acknowledged Widget Financial's crucialfraud detection work that broke the case wide open.

“You have to really be attuned to connecting the dots, andthat's what they did,” Fallon said.

“Perhaps they were thinking that if they opened accounts atcredit unions they could fly under the radar and we wouldn't catchthem as easily as a bank would,” Cook speculated. “They werewrong.”

In addition to Widget Financial and PNC Bank in Pittsburgh, theconspirators, using false IDs and documents, opened accounts at the$169 million Treasury Department Federal Credit Union in Wash.,D.C.; the $361 million Air Force Academy Credit Union in SanAntonio, Texas; the $4.1 billion Pennsylvania State EmployeesCredit Union in Harrisburg, Pa.; the $581 million Red Canoe CreditUnion in Longview, Wash.; the $78 million Rutgers Federal CreditUnion in New Brunswick, N.J.; the $3 billion Lake Michigan FederalCredit Union in Grand Rapids, Mich.; and, the $83 million WinwardCommunity Credit Union in Oahu, Hawaii, court documents show.

“The actors involved opened accounts anywhere they could at bothcredit unions and banks,” said Gregory A. Heeb, an FBI supervisoryspecial agent in Pittsburgh. “However, more often than not, thebanks/credit unions they used were small. They sought out placesthat allowed them to use the Internet to open the account and moneyorders for the initial deposit.”

Cook said in December a Widget Financial branch manager noticedan account had been opened by someone in the New York City area.The branch manager thought that was unusual because another accountfrom someone in the New York City area had been opened about twoweeks earlier.

The branch manager took her concerns to the credit union'sinternal audit/compliance and IT departments.

“At the same time, my vice president of branches got a phonecall from someone in New York City who had received mail from us,but he told us he did not open an account with us. I took it fromthere realizing there was something peculiar here.”

Cook asked her IT department to run a report on all accountsthat were opened over the last two years from New York, RhodeIsland and Connecticut because it was suspected that some of theaccounts were opened from Rhode Island and other accounts wereaccessed from Connecticut. Widget Financial began offering onlineaccount openings in 2012.

“At that point, we unveiled 10 accounts that were similar, so westarted looking at the applications,” she said. “The utility billswere the same and looked like a cut and paste type of thing, someof the IDs and some of the phone numbers were the same aswell.”

Although the credit union's field of membership includes peoplewho live or work in Erie and Crawford counties in northwestPennsylvania, Widget Financial FCU offers high-dividend checkingaccounts and have opened many out-of-state accounts.

“We have accounts in all 50 states including some ininternational countries,” Cook said. “We changed our name last yearfrom Erie General Electric FCU to Widget Financial, thus explainingthe broad membership base.”

Cook said the defendants used common names and in their accountapplications they claimed they were eligible for membership becauseof relatives who were also members.

Widget Financial's IT department looked at the IP addresses tosee from where and when the accounts were being accessed.

“We could see that from the same IP address, they would log onto one account and then two minutes later would log on to anotheraccount and then (minutes later) they would log on to otheraccounts checking balances,” she said. “At that point I knew wedidn't have legitimate accounts opened here.”

Most of the accounts had no or little activity. The transactionsincluded money-ordered deposits, and ACH deposits from a Visa cashadvance or from another financial institution, Cook said. In one ortwo cases, IRS refund direct deposits were made, but the checks didnot match the names on the accounts.

Some of the conspirators also had also used Widget Financialdebit cards.

“We couldn't figure out how they pulled that one off, other thanthey may have been stealing from somebody's mailbox at an apartmentcomplex somehow,” Cook speculated.

The accused used these accounts to deposit more than $10 millionin federal tax refunds after filing 2,400 fake federal income taxreturns over nine years. The defendants also used credit cards withfake IDs to support their criminal enterprise. Some of the taxrefund money was wired to Nigeria. Four out of the fiveconspirators are naturalized citizens believed to be of Nigeriandescent, and the fifth defendant holds American and Nigeriancitizenship, according to the FBI and court records.

David J. Hickton, U.S. Attorney for Pennsylvania's WesternDistrict in Pittsburgh, said the FBI and IRS are continuing theircriminal investigation and that the losses are expected to reachtens of millions of dollars.