Bank: ATM deposit fraud protections in place

Posted Jan. 15, 2009, at 11:36 p.m.

BANGOR, Maine — Local bank officials say deposit fraud protections are in place to protect against fictitious ATM deposits, but that didn’t stop a Texas man from walking out of TD Banknorth on Saturday with $14,000 in cash after putting empty deposit envelopes into an ATM.

Richard Walston, 24, who recently moved to the area from Stephenville, Texas, apparently took the money Saturday and was arrested Monday after returning to the Exchange Street bank in Bangor with two friends to make another withdrawal.

TD Banknorth spokesman Neil Permenter said Thursday that the bank has security measures in place to safeguard the financial institution against ATM deposit fraud, but to protect the bank he could not say what they are.

“There are different levels of holds,” he said. “There are a variety of factors” that come into play when making withdrawals. “We do have controls and security measures in place. [Walston’s arrest is] evidence there are mechanisms in place.”

Walston, who listed a Brewer address when he was arrested, was charged with felony Class B theft and faces a penalty of up to 10 years in prison and a fine of up to $20,000.

Penobscot County District Attorney Chris Almy said Walston has another address, 179 Indiana Ave., Bangor, which is Acadia Recovery Community, a shelter and graduated substance abuse treatment facility.

Walston allegedly made four fake deposits within minutes around 11:30 p.m. Jan. 9 at the outside ATM located near the bank’s drive-through lanes. The first two deposits were for $2,000 and the second two were for $20,000, for a total of $44,000, Almy said.

“It was later learned that he deposited empty envelopes,” he said. “For whatever reason, the bank computer allowed $22,000 of the amount to become available. He withdrew $14,000 in cash” the next day.

Banks must follow federal guidelines that deal with withdrawals, but “in this case, they didn’t even check to make sure these deposits were valid, which causes problems,” Almy said.

Marlene Thomas, vice president in branch administration for Merrill Bank, which has two Bangor branches and others around the region, said that computers, like humans, make mistakes.

“It’s a computerized world,” she said. “When they work, they work great.”

There “absolutely” are differences between in-person deposits and those made at an ATM, Thomas said.

“When you’re dealing with a machine, it takes the human element out of it,” she said.

Other local financial institutions, including Infinity Federal Credit Union and Maine Savings Federal Credit Union, do not accept ATM deposits.

Don Poisson, Maine Savings vice president of member services, said, “That’s a safety net.

“We don’t accept deposits at our ATMs; it’s just withdrawals,” he said, adding that deposits can be made through the credit union’s night deposit boxes, which are emptied by two employees. “It’s really secure.”

Having ATM deposits would require “a different level of security, and we’ve chosen not to take that security risk and have other avenues for customers to get their money into their accounts,” Poisson said.

After making the late-night deposits, Walston returned to the bank the next day “to inquire about the account and what was available,” Bangor police Sgt. Paul Edwards has said.

With the $14,000 in hand, Walston went on a spending spree, buying jewelry, a big-screen TV, lottery tickets, swords and other items, giving a lot of the stuff away, including cash gifts to friends, Edwards said.

Bank personnel at the Exchange Street branch of TD Banknorth in Bangor discovered the fraud and theft on Monday and called police around 12:30 p.m.

Unaware of the bank’s discovery, Walston returned to the bank at 1:41 p.m. and was arrested while two of his friends waited outside in a taxi, Edwards said. Only $1,200 in cash and some property purchased with the stolen cash have been recovered, the sergeant said.

The two friends, Brewer residents Kyle Cunningham, 19, and William Gustin, 20, subsequently were arrested on unrelated charges.

All three suspects were taken to the Penobscot County Jail. Cunningham and Gustin were released earlier this week. Bail for Walston was set at $2,000 cash or $20,000 surety, and he remained in jail Thursday evening, a jail official said. He is scheduled to face a judge in Penobscot County Superior Court on Feb. 27.

Bangor Police Department investigators are still trying to recover the remaining cash or property purchased with the stolen funds and are asking anyone with information to contact the department at 947-7384.

nricker@bangordailynews.net

990-8190

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