Hundreds investigated for taking $15 million from ATM

NEW YORK -- Prosecutors said Monday that as many as 4,000 people used ATMs to steal $15 million from a municipal employees' credit union whose computer security system was damaged in the Sept. 11 attack.

Police said they had arrested 66 people and were seeking 35 others. But thousands more are under investigation in what already is one of the largest fraud cases to come out of the terrorist attack.

District Attorney Robert Morgenthau said the suspects found a way to repeatedly withdraw up to $500 a day from ATMs -- even if their accounts at the Municipal Credit Union couldn't cover it.

The problem stems from Sept. 11, when the attack on the World Trade Center damaged a nearby building housing the credit union's computer system. The system was also affected by subsequent telephone system and power outages.

Credit union officials soon realized they could not properly monitor the computer network that handles automated teller transactions. But they decided to allow withdrawals without the normal banking safeguards so they would not offend members affected by the tragedy.

"This is a prime example of no good deed goes unpunished," Morgenthau said. "People took advantage."

He said as many as 4,000 people manipulated the system to overdraw their bank accounts by at least $1,000. Of that group, more than 540 credit union members exceeded their balances by more than $5,000.

According to authorities, a 54-year-old nurse made 54 cash withdrawals from Sept. 18 to the end of October, leaving her with a negative balance of $18,111.