STRATEGIC PARTNERS
August 5, 2002
NEW YORK -- Prosecutors are investigating up to 4,000 people who allegedly used ATMs to steal $15 million from a municipal employees' credit union in the aftermath of the Sept. 11 attack.
Police said they had already arrested 66 people and are currently seeking 35 others, with thousands more under investigation, according to an Associated Press report.
District Attorney Robert Morgenthau said that the suspects, many of them city employees, found a way to repeatedly withdraw up to $500 a day from ATMs even if their accounts at the Municipal Credit Union couldn't cover it. The credit union is open to government employees, health care professionals and college staff members, among others.
The Sept. 11 attack on the World Trade Center damaged a building housing the credit union's computer system, which also was affected by subsequent telephone and power outages. Credit union officials realized they could not properly monitor the network that handles ATM transactions but opted to allow withdrawals without the normal banking safeguards so as not to negatively impact members affected by the tragedy.
"This is a prime example of no good deed goes unpunished," Morgenthau said. "People took advantage."
Up to 4,000 people overdrew their bank accounts by at least $1,000, Morgenthau said, more than 540 of them exceededing their balances by at least $5,000.
According to authorities, a 54-year-old nurse made 54 cash withdrawals from Sept. 18 to the end of October, leaving her with a negative balance of $18,111. A Housing Authority employee reportedly made dozens of withdrawals, using his credit-union card to make purchases at a restaurant, a liquor store and a motel.
The problem was fixed in November, and investigators began tracing the illicit withdrawals.
Morgenthau said the credit union mailed notices to the account holders demanding payment, hired a collection agency and offered to convert the negative balances to loans. The people arrested made little or no effort to repay, Morgenthau said. A handful of people, when confronted about the transactions, agreed to take out loans to return the money.
Those arrested could face up to seven years in prison if convicted.
"Anyone who thinks they can profit from the World Trade Center aftermath is sorely mistaken," said Police Commissioner Raymond Kelly.
