by Keka Araújo
October 30, 2024
These civil cases mark the beginning of the bank’s broader legal campaign against those it accuses of fraudulently obtaining funds through the ATM loophole.
JPMorgan Chase, the largest U.S. bank by assets, has filed lawsuits against customers who allegedly exploited a technical glitch to withdraw substantial funds from ATMs before their deposited checks bounced.
The lawsuits, filed in at least three federal courts on Oct. 28, target individuals who allegedly withdrew the most significant amounts in the so-called “infinite money glitch,” a scheme that gained viral popularity on social media platforms such as TikTok in late August.
The most significant case filed involves a Houston man who, according to JPMorgan, owes $290,939.47 after an unidentified accomplice deposited a counterfeit check totaling $335,000 at an ATM.
“On Aug. 29, 2024, a masked man deposited a check in (the) defendant’s Chase bank account in the amount of $335,000,” JPMorgan stated in the Texas filing. “After the check was deposited, the defendant began withdrawing most of the ill-gotten funds.”
In the wake of the viral glitch, JPMorgan reportedly investigated thousands of cases involving varying sums. While the bank has not disclosed the total financial impact, its investigation has highlighted an ongoing challenge with check fraud—a global issue resulting in losses of $26.6 billion last year alone, according to Nasdaq’s Global Financial Crime Report. Although the use of paper checks has declined, JPMorgan’s “infinite money glitch” episode underscores how social media can amplify vulnerabilities within financial institutions.
The glitch was reportedly corrected a few days after discovery, allowing customers to bypass the usual waiting period banks impose for checks to clear. Under normal conditions, only a portion of a check’s value is available for immediate withdrawal, with the remainder accessible only after the check clears, which can take several days.
Beyond the Texas case, JPMorgan has filed additional lawsuits in Miami and California involving customers accused of withdrawing amounts ranging from $80,000 to $141,000. According to individuals familiar with the bank’s internal investigation, most cases involve smaller sums, though JPMorgan prioritized cases with higher amounts and those with potential connections to organized criminal groups.
According to court documents, JPMorgan’s security team contacted those suspected of committing fraud, seeking repayment for the phony checks under the terms of the bank’s deposit agreement. The bank’s lawsuits demand restitution of the funds, interest, overdraft fees, and, in some instances, punitive damages. The financial institution is also seeking compensation for legal costs associated with the recovery efforts.
These civil cases mark the beginning of the bank’s broader legal campaign against those it accuses of fraudulently obtaining funds through the ATM loophole. Alongside its civil suits, JPMorgan has reportedly referred cases to law enforcement agencies nationwide, paving the way for potential criminal charges. According to sources familiar with the bank’s approach, this strategy signals that JPMorgan will actively pursue offenders, focusing on cases indicating possible links to organized fraud groups.
“Fraud is a crime that impacts everyone and undermines trust in the banking system,” said Drew Pusateri, a JPMorgan spokesperson, in a statement to CNBC. “We’re pursuing these cases and actively cooperating with law enforcement to make sure if someone is committing fraud against Chase and its customers, they’re held accountable.”
The lawsuits represent JPMorgan’s commitment to recovering funds lost through ATM fraud and serve as a warning to discourage similar schemes. The bank’s proactive stance also reflects a growing awareness of how social media can facilitate the rapid exploitation of financial vulnerabilities, underscoring the evolving landscape of bank security.
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