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Brown and Dumanis Charge Dozens of Street Gang Members and Associates in $500,000 Credit Union Scam

Wednesday, May 13, 2009
Contact: (415) 703-5837

San Diego –Attorney General Edmund G. Brown Jr. and San Diego District Attorney Bonnie Dumanis have filed 347 felony charges against dozens of members and associates of a San Diego street gang for stealing more than $500,000 from the Navy Federal Credit Union, using forged checks and an Indian Casino cash machine.

After obtaining personal account information and PIN numbers from paid-off credit union members, Lincoln Park Street Gang members would deposit counterfeit checks into the cooperating credit union member’s bank accounts, and then withdraw thousands of dollars from a cash machine at the Barona Casino, east of San Diego.

The filing of these charges is the culmination of a months-long investigation by the Attorney General, San Diego District Attorney, United States Secret Service Regional Fraud Task Force, and the San Diego Police Department Gangs Unit. Charges were filed against 60 individuals.

“Street thugs, operating like white collar criminals, devised an ingenious scam to bilk the Navy Federal Credit Union out of $500,000,” Brown said. “They recruited and paid off willing credit union members and manipulated financial rules to feed their criminal enterprise.”

"The size, scope and sophistication of this operation show us that criminal street gangs in San Diego are expanding their criminal enterprise into white collar crime,' San Diego County District Attorney Bonnie M. Dumanis said. 'As gangs move from street corner drug dealing to complex fraud, it's more important than ever that law enforcement from all levels continue to work together.'

Tuesday morning in the pre-dawn hours, more than 100 law enforcement officers fanned out across San Diego to take the defendants into custody as part of a multi-agency operation called “Bank Gig.”

The operation included agents from the U.S. Secret Service, San Diego Police Department gang detectives, San Diego District Attorney Investigators, the Economic Crimes Task Force, U.S. Postal Inspection Service, Navy Criminal Investigative Service, and Navy Federal Credit Union. Additionally, the Barona Tribal Government fully cooperated with the investigation.

Charges include: conspiracy, grand theft, money laundering, recruiting to commit a felony for a gang, forgery, unlawful sale of access card information, burglary, and gang enhancements.

The defendants are scheduled to be arraigned in San Diego Superior Court Dept. 11 on May 14 at 10:30 a.m. and 2:30 p.m. (220 W. Broadway). Some of the defendants could face up to 13 years in prison if convicted of all charges.

The Scheme
In 2005, Navy Federal Credit Union noticed a significant increase in fraud reports from young members reporting that their bank information and their PINs had been stolen. Credit Union officials reported the emerging pattern to the U.S. Secret Service, which launched an investigation.

The investigation uncovered that young credit union members were approached by a street gang member or associate and asked if they would like to make easy money. The credit union members would hand over their account information and PIN numbers.

The gang members would then deposit thousands of dollars of forged and counterfeit checks into the credit union member’s account and then immediately withdraw funds through a point-of-sale machine (similar to an ATM machine, but without low withdrawal limits) at the Barona casino. The account holder would file a police report and affidavit with the credit union in the hope that they would not be held responsible for the loss on their account.

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