- Key insight: The scheme relied not on stolen checks but a person who could pass a branch's identity check, and the ring sourced that by recruiting homeless people and people with substance abuse problems.
- What's at stake: Account opening at the branch counter is the control this scheme had to beat, and it is the control banks have automated least.
- Supporting data: Criminals open mule accounts in branches more often than through any other channel, reported by 53% of institutions in a Federal Reserve Financial Services survey, and two-thirds have seen accounts whose legitimate owner was scammed into opening one.
Overview bullets generated by AI with editorial review.
Prosecutors in the Bronx this week announced that eight members and associates of the Shiesty 66 gang have been sentenced for a bank fraud scheme that stole more than $10 million.
Part of the scheme was card cracking, which turns a real customer's debit card into a way to cash phony checks. The crew also chemically washed stolen checks so it could rewrite the payees and the amounts.
All eight pleaded guilty in Bronx Supreme Court. Their terms run from two months in a local jail to two to six years in state prison, except for one man whose plea to a weapons charge sends him to a diversion program.
In some instances, the crew recruited homeless people and people with substance abuse problems and accompanied them into banks to open accounts, according to Tuesday's
The crew recruited debit card holders for card cracking via social media, though neither release names which platforms the gang used. The crew deposited phony checks into the recruits' accounts, pulled out the cash at ATMs, paid the recruits a kickback and told them to report the cards stolen.
That side of the operation never put anyone in front of a teller. The walk-ins did, and that is the reverse of the usual pattern; criminals who steal checks out of the mail tend to
One of the men in the ring, Moussa Cisse, "coerced a woman to walk into a bank and open an account using a fraudulent check," and "the woman was caught while he drove away in a car with her children in the back seat," according to the sentencing release.
Other check-fraud rings recruited differently. A Florida ring whose 19 members pleaded guilty this month
The Bronx crew also used the identities of people who could not object. Souleman Traore and his twin brother Lahaji assumed the identity of a victim they knew was dead, prosecutors said.
Cisse and two others used the identities of minors and dead people. In one instance, the last check deposited into a victim's account was for her own funeral.
Countering check fraud with tellers
The crew had to face a bank employee at only one step: account opening. Prosecutors described two encounters where it got caught there.
Souleman Traore walked into a branch with a forged passport and forged paperwork under the dead person's name. He "was caught fleeing from the bank after the teller became suspicious and alerted the authorities," according to the district attorney's July 28 sentencing release.
The woman Cisse coerced also got caught, but prosecutors did not say who stopped her or how. They also did not say whether they charged her or treated her as a victim of the crew that sent her in.
A vast majority of institutions (71%) identify possible mule accounts (accounts that move stolen money) via manual review of the account holder at opening. Compare that to the 36% that review the account holder automatically, according to the Federal Reserve Financial Services
(The 403 responses came from banks and credit unions that use Federal Reserve Financial Services' own services.)
Half of respondents in that survey said they find out about mule accounts through fraud losses. The rest find out preemptively.
Criminals open mule accounts at branches more than through any other channel. Just over half of the institutions surveyed (53%) said they or peers in their markets had seen it compared with 34% for online banking portals, 19% for mobile apps and 6% for non-bank partners.
Two-thirds had seen a mule account whose legitimate owner was scammed into opening it.
Banks have some authority to slow a suspicious deposit.
The rule bars a bank from judging by the kind of check or the kind of person depositing it and demands "facts that would cause a well-grounded belief in the mind of a reasonable person," written into a notice it keeps on file.
In other words, a bank can't stop a check deposit based solely on a hunch.
What banks are told to look for
A July 2020
Regulators addressed vulnerable people at the counter more directly in December 2024 when six federal agencies and state financial regulators issued a
That 2024 advice suggested training customer-facing employees on behavioral red flags, described using transaction holds and disbursement delays and pointed to a federal law shielding banks from liability when they report suspected exploitation.
A footnote on the 2024 advice allows that the practices "may be helpful in preventing fraud more broadly," but regulators have issued nothing specific to the other kinds of vulnerable people the Bronx ring exploited.
The money nobody got back
The ring stole more than $10 million, prosecutors announced Tuesday. The restitution the court ordered against six of the eight men adds up to $139,612.50, and the release lists none for the other two.
Investigators returned money to some victims they could identify, but "in most instances, authorities could not identify the original owner of the stolen checks," according to the sentencing release.
Banks reimburse customers when fraudsters take their money, including through washed checks. Once the customer is whole, the banks at the sending and receiving ends
