The head of a company that supplied cash to New York-area ATMs last week pleaded guilty to a fraud scheme that siphoned as much as $50 million from credit union and bank customers.
Robert Egan, 64, president of Mount Vernon Money Center, pleaded guilty to one count of conspiracy to commit bank and wire fraud and six counts of bank fraud in a scheme by which his company used the float on cash provided by his customers to pay overhead and other expenses.
The biggest victim of the fraud was Webster Bank of Connecticut, which lost as much as $12 million. The fraud also hit New York’s Actors FCU, which lost an estimated $4.3 million; Northeast Alliance FCU, an estimated $565,000; ADP FCU, $438,000; Atlanta’s Delta Community CU, $520,000; and, Cardtronics, the nation’s largest ATM operator, $2.1 million, according to records of the U.S. Bankruptcy Court, which has appointed a receiver to liquidate the firm. ADP FCU, of Roseland, N.J., has filed a civil suit attempting to recover some of its lost funds.
Other victims are: Elan Financial Services, the ATM operations of U.S. Bancorp.; ATM Access; Select-A-Branch; New York Community Bank; MoneyGram; Domestic Bank; and, Carver Savings Bank.
Egan and his chief operating officer, Bernard McGarry, commingled millions of dollars of cash collected from the customers and used it to supply ATMs and to pay business expenses, according to federal prosecutors. Criminal charges are still pending against McGarry.
The company took in more than $75 million of cash from its customers but only held as much as $25 million in cash in its vaults and bank accounts. As part of a plea agreement, Egan has agreed to forfeit $19.3 million of cash seized by the FBI when it raided the business in February.
Mount Vernon Money Center provided a variety of cash management services, including replenishing cash in more than 5,300 ATMs owned by credit unions and banks. It also provided armored car services to banks, financial institutions and retailers through a subsidiary called Armored Money Services.
The case represents one of the biggest credit union thefts ever, but is not the first time credit unions have been victimized by ATM cash providers. Six years ago executives of Executive Cash Services in New Jersey were convicted of looting some $3 million from ATMs they were supplying for credit unions and banks, and a decade ago the owners of Tri-State Armored Services were found guilty of stealing as much as $50 million from more than 200 institutions, including 60 credit unions they were supplying cash for up and down the Atlantic coast.
What do you think about this? Send us your feedback. Click Here.