Financial Crime Goes Gangsta

Everything evolves to meet the times, including street crime.

According to a recent Wall Street Journal report, when two dozen Crips were arrested in New York last year, a 38-page indictment was created with a bunch of stuff you’d expect (cocaine, murder, robbery) and at least one thing you probably don’t: bank fraud.

Specifically, bad checks — created, deposited and drawn on before the banks in question (JPMC and BoA) spotted the forgery. All in, the Crips managed a $500,000 haul on that scam.

And this is not a case of particularly inventive street criminals innovating. Check fraud and identity theft are becoming preferred by gangs over drugs and violence, since financial crime pays better, involves less jail time and is a lot less likely to get you killed. Bank of America may not like being stolen from, but it is unlikely to send someone to bust a cap in part of your body because you stole from it.

“We think of gang members being knuckleheads, but these guys are using a sophisticated thought process and getting involved in stuff that requires technology and an understanding of the banking system,” said Wayne Caffey, a detective in the Los Angeles Police Department.

There is no national data on the amount of money that gangs are alleged to have reaped from bank fraud.

“It’s certainly something that street gangs have historically not been involved in,” said Scott Decker, a professor who studies gang behavior at Arizona State University.

And yet, this isn’t good news in the sense that gang members are giving up violence in favor of larceny. NYPD Commissioner William Bratton wrote in an op-ed piece that the gangs aren’t any less violent; they are just now violent white collar criminals.

“The sums of money involved are staggering,” said Ron Huff, a criminology professor at the University of California, Irvine, who studies gangs. “Even though it’s a small minority … the potential amount of money involved and damage to people’s financial accounts is greatly out of proportion to other gang crimes.”