Intellectual Property Law

Some enterprising finance workers are finding their own solution to the growing banking crisis, judging by a spate of recent federal indictments: using their access to bank computers to plunder accounts.

Missouri Citibank employee Brandon Wyatt was charged last week with identity theft for a scheme that allegedly began in January 2006, and continued until late last month. Wyatt is accused of tapping Citibank's computers for customer information, then using it to set up checking accounts online with competing banks, including Bank of America, Washington Mutual and AmTrust.

Wyatt allegedly wire transferred customer funds from Citibank to the new accounts, then cashed them out with additional transfers, checks, debit card purchases and ATM withdrawals. His take, according to federal prosecutors in St. Louis, was at least $380,000.

Two employees of an investment company in Indianapolis allegedly took a more indirect route to riches. Nyteria Redding and Raquel Vaughn are accused of grabbing customer information like names, addresses, Social Security numbers and dates-of-birth from their employer's computers, and passing it to Redding's boyfriend, one Nathan Green. Green then allegedly paid lackeys to fill out credit card applications using the information -- changing the addresses to abandoned houses with accessible mailboxes.

Green wound up with a cumulative credit line of over $1.4 million from 129 credit cards in the scam, according to federal prosecutors in South Bend. In all, 581 customers of the unnamed investment firm had their information stolen from August 2005 through March 2006. Seven people were indicted last week for identity theft and conspiracy.

Similarly, two Chicago temp workers at the investment management firm Computershare apparently decided the company's customers owned too much Comcast stock. Alleged mastermind Lester Swims and coworker Mark Kramer supposedly used their inside access to dump over $700,000 from 67 trading accounts, routing at least some of the cash-out checks to themselves. Court records don't indicate what Swims had against Comcast -- one suspects he was short selling the cable giant on the side.

The scheme ran from July through September of last year. After complaints started coming into Computershare, agents with the U.S. Postal Inspector found incriminating evidence in Kramer's trash, and both men were indicted Tuesday in federal court in Chicago.

If you're staring to despair that only insiders can make it big in fraud, never fear. Miami man Adolphus Emercheta was indicted last week for allegedly setting up online bank accounts for Washington Mutual customers and transferring a few thousand dollars from their home equity credit accounts; there's no indication that Emercheta worked for the bank.

And Paven Voleti, a Tennessee man, was charged with  reprogramming blank credit cards with stolen Discover card data. He didn't work at a bank, though the Secret Service did find an ATM in his house.

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Fed Blotter is Threat Level's new weekly roundup of computer crime cases in the federal courts. If you've been indicted, or are about to be, please let us know.

(Photo courtesy Nathan Gibbs)