The grand jury in Chicago charged the two Illinois men — Michael D’Ambrose, 62, of Chicago, and Scott Apgar, 43, of Roscoe — with 16 counts of bank fraud, the U.S. Department of Justice said in a Thursday (Dec. 8) press release.
Citing court documents, the release said the two men operated payment processing companies that deposited checks on behalf of merchant-clients and often handled “remotely created checks” (RCCs) that were not signed by the account holder.
The indictment alleges that they deceived banks about the nature of their business and financial transactions in order to open bank accounts and process tens of millions of dollars of RCCs.
It alleges that the defendants used those accounts to deposit the RCCs despite warning signs of fraud — including complaints from consumers and inquiries from law enforcements agencies and banks about unauthorized debits — and that they intentionally recruited clients that were having trouble finding and keeping other payment processing services, the release said.
The indictment further alleges that they manipulated the rates of returned deposits — making small-dollar deposits to increase the volume of deposits in an account and make the percentage of returned RCCs appear smaller than it was — and submitted to banks documents that they knew contained false and fraudulent information.
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If convicted, the defendants face up to 30 years in prison for each of the 16 counts of bank fraud, according to the press release.
PYMNTS research has found that two-thirds of financial institutions are grappling with a rise in financial crime, both in terms of volume and transaction cost.
The institutions queried by PYMNTS said they had endured losses of more than $100 million through the past year alone, according to “The State of Fraud and Financial Crime in the U.S.,” a PYMNTS and Featurespace collaboration.
