Six credit unions, a corporate credit union and 20 banksthroughout the nation were victimized by a fraud ring that operatedout of a Massachusetts apartment.

Charles Washington of Dorchester, and an unknown number ofco-conspirators obtained account numbers and personallyidentifiable information for high-balance bank accounts, whichincluded the names, address, dates of birth, Social Securitynumbers and sample signatures that the victim financialinstitutions used to identify and authenticate account holders,according to court documents filed in U.S. District Court in Bostonin August.

From August 2013 to April 2016, the fraud ring gained access tonearly $4 million held in accounts and withdrew $2 million.

Federal prosecutors alleged that Washington and hisco-conspirators recruited runners of the same gender andapproximate age of these account holders to impersonate them whenthey went to branches to withdraw funds.

They withdrew as much money as possible but would take outsmaller amounts at several different branches of the financialinstitution in an effort to avoid detection of the scheme.

The victimized credit unions were $1.4 billion Achieva Credit Union in Dunedin, Fla., the $89 millionFoothills Credit union in Lakewood, Colo., the $545 millionHarvard University Employees Credit Union in Cambridge, Mass.,the $103 million Northern Skies Federal Credit Union in Anchorage,Alaska, the $411 million Reliant Community Credit Union in Sodus,N.Y. and the $949 million TruWest Credit Union in Tempe, Ariz. The$3.5 billion Alloya Corporate Federal Credit Union in Naperville, Ill., alsowas victimized according to court documents.

“Unfortunately, all financial institutions battle fraud everyday. We do things on a daily basis to react quickly and remainvigilant about protecting consumers and their information,” PamelaHeald, president/CEO of Reliant CU, said in a prepared statement.“Our members can be reassured that account security has alwaysbeen, and remains our highest priority. Reliant continues toutilize state-of-the-art technology, increased risk managementresources, and highly trained staff to ensure that member accountsare protected as fraud continues to rise.”

The other five credit unions and Alloya Corporate FCU did notprovide comments regarding this fraud case when contacted by CUTimes last week.

The fraudsters also hit some big banks like Bank of America,Citizens Bank, JP Morgan Chase, Northern Trust, TD Bank, a slew ofsmall and midsize banks throughout the country and the CommercialBank of Kuwait. Court documents, however, do not specify how theKuwaiti financial institution was affected by the fraud.

Washington and coconspirators also set up “drop accounts” toreceive large-dollar wire transfers and check deposits fraudulentlywithdraw from a credit union or bank and home equity line of creditaccounts.

The fraud ring recruited runners to open accounts in therunner's own name or in the names of fake businesses. The shellbusinesses were land title businesses, property management firmsand contracting businesses for which large-dollar wire transfersand other big deposits would not be unusual. The fraudsters alsoobtained business licenses to make it appear the shell companieswere legitimate.

In court documents, federal prosecutors revealed four specificexamples on the amount of money stolen from members' accounts atcredit unions.

For example, on March 11, the fraudsters wired $70,000 from anaccount at Harvard University Employees CU to a drop account atCitizens Bank in Massachusetts. Three days later, thecoconspirators wired $131,000 from a member's account at TruWest CU to a drop account at Citizens Bank branches inRandolph and Malden, Mass. On March 29, the fraud ring wired$78,539 from the Foothills CU to another Citizens Bank branch in Massachusetts,and on March 31, the fraudsters wired $68,430 from member's accountat Northern Skies FCU to TD Bank accounts in Boston and WestRoxbury.

Soon after the co-conspirators verified the wired money wasdeposited in their fake accounts, they withdrew the funds.Washington and the runners frequently used text messages tocommunicate with each other to carry out their scam.

On Aug. 11, Washington pleaded not guilty to one felony count ofbank fraud conspiracy and four felony counts of bank fraud. Thenumber of the co-conspirators and their identities were notrevealed in court documents.