January 2017 Issue

The 'Newsletter on Financial Fraud' from CustomerXPs is your monthly insight into the various new fraud types and methods used by fraudsters globally in the banking space.

This will help you stay abreast of all the latest happenings in the banking fraud space.

International Bank Fraud Racket Busted


Police in Malaysia have busted an international syndicate specializing in credit and ATM card fraud, which has been raking in about RM 1 mil in ill-gotten gains since last August.

Twenty-five syndicate members, including nine Canadians and 11 Sri Lankans, were nabbed in a series of raids around the city from Wednesday. Four Malaysians, aged between 23 and 54, were also detained.

The Method:

Under the syndicate's modus operandi, blank cards were couriered into the country and picked up by the members, who would then encode the bank's information with a magnetic strip encoder device.


The members, who entered the country as tourists, would then carry out their illegal transactions for about three months before leaving, having pocketed some 10% as "fees".

Their places would then be taken over by others.

Authorities said that using a card, the gang members would withdraw a maximum of RM 1,500 before destroying the card.

During the raids, police also seized 533 credit and ATM cards from various countries, RM 74,7703 in cash as well as an array of equipment, including three laptops, an iPad and two magnetic strip encoder devices.

Source: The StarOnline

HDFC Bank replacing merchant terminals due to 'Skimming' Fraud


India's largest credit card issuer HDFC Bank has started replacing many of its POS machines at merchant establishments following card 'skimming' frauds.

The Bank said that cases of 'skimming' have been witnessed in the country of late, wherein the card data is copied illegally in an otherwise legitimate transaction, only to be used fraudulently later.  However they did not mention the number of machines being replaced or the number of cases detected.

Asked whether there was any complicity at the merchants' end, he said multiple investigation agencies were dealing with the issue and he was not in the know.

Rao said overall the instances of fraud reported in the country amounted to only a tenth of those observed in the developed world and that instances of fraud cases have no bearing on the delinquency levels observed in the bank's card portfolio.

HDFC Bank Managing Director Aditya Puri said such frauds are an industry-wide phenomenon and being a part of the ecosystem, the bank has also witnessed such instances and advised everyone to be extra careful.

Source: Economic Times

Man faces 30 years for defrauding banks


A 37-year-old St. Paul man Christopher Terrelle Harness, faces the possibility of 30 years in prison after pleading guilty to defrauding a handful of banks.

The Method:

Prosecutors say Harness admitted that from October 2007 through July 2012, he obtained money from banks by depositing checks that were drawn on the accounts of other individuals, checks that  he knew were either stolen or not backed by sufficient funds.

Investigators say Harness and his associates deposited those checks into fraudulently opened bank accounts in order to deceive the banks into honoring ATM withdrawals from those bogus accounts.

Harness also admitted that he and others stole checks from other individuals and forged those individuals' signatures on the stolen checks. After the stolen checks were deposited into ATMs and cash was withdrawn. In total, the victimized institutions sustained approximate losses of between $30,000 and $400,000.

Man Sent To Jail For Bank Fraud Scheme


A man from Greenbelt  has been sentenced to jail time for a bank fraud scheme that resulted in the loss of more than $600,000 to financial institutions

Bolarinwa "Bola" Adeyale, 23, of Greenbelt, Maryland and several others came up with a scheme of depositing stolen Bank of America convenience credit card checks into legitimate accounts and then withdrawing the money before the bank recognized the fraud, according to the statement.

The checks were stolen from mailboxes in Prince George's, Montgomery and Howard Counties and deposited into the bank accounts of college students that had been recruited for this purpose. Bank employees also took part in the scheme by providing the conspirators with "high end" account holder information that resulted in the creation of fraudulent checks, the district court said. 


Trial evidence revealed the a a total of $1.2 million in fraudulent deposits were made from over 50 compromised bank accounts, resulting a loss of over $600,000 to Bank of America. 

Source: GreenBelt Patch 

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