CHICAGO—Twenty-nine defendants are facing state or federal charges following an investigation of “cracking cards,” a scheme that costs banks millions of dollars, has its roots on Chicago’s south side and is spreading to other cities through rap music and social media, officials said.
Since 2011, the defendants and other individuals allegedly deposited counterfeit checks into banking accounts belonging to third parties who surrendered their debit cards and PINs for use in the cracking cards schemes, officials said.
Authorities said defendants then allegedly used automated teller machines, casinos, currency exchanges and retail stores to withdraw or spend funds that the banks advanced to the third-party accounts fast.
The banks lost money they advanced to the account holders when the customers denied responsibility for the withdrawals and purchases, officials said.
Cracking cards schemes have become a popular method of obtaining illicit funds in Chicago and surrounding areas.
In a criminal complaint, one defendant, Matthew Mosley, 26, of Chicago, allegedly “made paper,” that is, he manufactured counterfeit checks, which he used and sold to others in cracking cards schemes.
Mosley was arrested and charged with bank fraud for allegedly causing banks to lose more than $32,000.
Mosley was one of 16 defendants charged with bank fraud in separate criminal complaints filed in U.S. District Court in Chicago. These 16 defendants allegedly caused bank losses totaling more than $1.7 million, with individual defendants responsible for amounts ranging from $26,000 to $260,000.
Five of these defendants were arrested Wednesday, one was already in custody, and arrest warrants were issued for 10 others.
Four of these defendants ― Kevin Ford, 26, of Chicago; Cortez Stevens, 24, of Griffith, Ind.; Stephen Garner, 23,of Portage, Ind.; and Mikcale Smally,21, of Chicago ― are identified in the complaint as part of a group that called themselves “R.A.C.K. Boyz,” “Rack Boyz,” or “TheRackBoyz.”
The other two defendants, Mercedes Hatcher, 21, of Danville, Ill., and Brittany Sims, 24, of Portage, Ind., were identified as Ford’s and Garner’s girlfriends, respectively.
The RACK Boyz have Facebook and Twitter accounts and post videos on YouTube, including a rap video entitled, “For the Money,” which refers to cracking cards and shows the defendants wearing RACK Boyz shirts and displaying large amounts of cash, according to the complaint affidavit.
Ford is also associated with a different so-called “money team,” known as BandKlan, which also has rap videos posted on YouTube.
The complaint alleges that the defendants use social media to recruit people with bank accounts or who will open bank accounts to use in the cracking cards scheme.
They allegedly sent out numerous private messages and posted messages on their Facebook walls inviting people to participate in the scheme. The charges allege that the defendants were linked to numerous withdrawals from third-party bank accounts after counterfeit checks were deposited.
Ford also allegedly “made paper,” by printing fraudulent checks, and, on Oct. 20, Ford allegedly posted threats to law enforcement officers on his Facebook wall.
Defendants are innocent until proven guilty.