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SD Gang Involved in Massive Bank Fraud

Audio

Aired 5/13/09

The San Diego County District Attorney today announced the break up of a fraud ring that bilked the Navy Federal Credit Union out of half a million dollars. KPBS reporter Katie Orr explains a local gang was behind the scam.

— The San Diego County District Attorney today announced the break up of a fraud ring that bilked the Navy Federal Credit Union out of half a million dollars. KPBS reporter Katie Orr explains a local gang was behind the scam.

DA Bonnie Dumanis says this is the first time in California a street gang has been targeted for bank fraud. Members of San Diego’s Lincoln Park gang recruited credit union members to deposit fake checks into their accounts. The funds would then be withdrawn before Navy Federal became aware the checks were bad. Dumanis says 60 defendants have been charged with 347 felony counts.

“The size, scope and sophistication of this operation show us that violent street gangs in San Diego are expanding. They’re expanding beyond murder, beyond drug dealing, beyond pimping and beyond robbery into white collar crime,” she says.

San Diego Police Chief William Lansdowne says the arrests include a lot of high ranking gang members. Six of the defendants are activity duty military who cooperated in the scam. The charges carry prison sentences from 3 to 17 years.

An investigator with Navy Federal first noticed unusual activity in 2005. He called the Secret Service in 2008 when he began to suspect the separate incidences where connected. All of the withdrawals occurred at ATM's in the Barona Indian Casino. The scam involved using an account for a seven day period before moving on to another. The withdrawals ranged from $4,000 to $25,000. Officials say no one from either Navy Federal or Barona was involved with the fraud. Last month a member of the Lincoln Park street gang was charged in connection with a multi-million dollar mortgage fraud scheme.

Katie Orr, KPBS News