Women sentenced in $256,000 Palo Alto credit union fraud Crimes & Incidents, posted by Editor, Palo Alto Online, on Feb 16, 2012 at 2:34 pm
Two women who stole more than $250,000 out of a couple's Palo Alto credit union account were sentenced Tuesday, Feb. 14, in Santa Clara County Superior Court, the Santa Clara County District Attorney's Office announced Thursday.
Read the full story here Web Link posted Thursday, February 16, 2012, 1:54 PM
Posted by how, a resident of the Adobe-Meadows neighborhood, on Feb 16, 2012 at 2:34 pm
Why was it so easy for them to access someone else's bank account? Did one of them work at the bank? Or is the bank's security so weak that they could access the account without any credentials? This kind of bank robbery sounds so much easier than walking into the office with a gun.
Posted by Victim from another crime, a resident of another community, on Feb 17, 2012 at 7:50 am
Let me just say this. As a victim of another crime from another area. I never received the money that was stolen out of our accounts via forged checks. To top it off, the person who did it. Was never placed in jail, because she came forward after seeing her pic in our newspaper crime stopper ad. Oh, I was told it was only $1200.00
Posted by Barron Parker, a resident of the Barron Park neighborhood, on Feb 17, 2012 at 4:11 pm
Hey, you steal a quarter million dollars, get a slap on the wrist, no restitution or tax liens or anything, and you're out in a few months ready to do it again.
The worst thing about these crimes is that most people who do this are psychopaths: they have done it in the past and will do it over and over for their entire lives, causing great suffering to everyone they encounter. They'll go to another city, steal another identity, and play the same game until they are caught there. Repeat for 50 years. And judges are taken in because the criminals seem repentant each time.
Posted by Addison Avenue (now called First Tech Federal) Credit Union customer, a resident of another community, on Feb 17, 2012 at 10:48 pm
I am a longtime Addison Avenue (now First Tech Federal) Credit Union customer. Within the past few months, they just started offering a limited capability for electronic alerts to report account activity by email and/or text message.
Why didn't Addison Avenue Credit Union, now called First Tech Federal Credit Union, have procedures to detect the creation of a PIN number without authorization? Why didn't the closure of an account exceeding $100,000, coupled with a transfer to an account held by someone other than the original owners, trigger an internal investigation by the Credit Union and/or by the National Credit Union Association (NCUA) immediately (or at least within 60 days)?
Why doesn't First Tech Federal Credit Union offer electronic account alerts for Certificates of Deposit? Why can't First Tech e-Alerts notify more than a single email account, and why can't they offer unique, independent e-Alerts for each account, rather than a single threshold e-Alert that must apply across all accounts belonging to a credit union member?
Posted by Kt, a resident of the Midtown neighborhood, on Feb 19, 2012 at 9:11 am
Addison ave credit union customer, with all of those questions you should be second guessing the security of your money with this credit union. I really hope that the this poor couple gets their money back..... I bet the guy who robbed 711 (if caught) will do more time than these thieves.......Such a flawed system.....
Posted by Deborah Colby, a resident of the Palo Alto Hills neighborhood, on Feb 21, 2012 at 7:44 pm
My name is Deborah Colby and I am the VP of Marketing for First Tech Federal Credit Union. I'd like to take the opportunity to respond to a few of the items raised in the comments above.
Let me first assure everyone that our members affected by this fraud did not lose any money. First Tech replaced 100% of their funds.
For the privacy and security of our members, I cannot share in this forum specifically how the fraud occurred or what we specifically did to address it. I can share that we take our members privacy and security extremely seriously. We continually monitor our systems, processes and procedures for fraud and take immediate action when needed.
Unfortunately, in this case, it was one of our own employees who committed the fraud. The individual has since been terminated and we actively participated with local authorities to prosecute the parties involved.
Finally, I'd also like to address the questions around NCUA insurance. Just like FDIC insurance does for bank customers, NCUA insurance protects credit union members from losses up to $250,000 in situations where their credit union is deemed insolvent. NCUA insurance does not protect members' assets from fraud perpetrated by other individuals.
From that perspective, most credit unions, including First Tech, carry separate insurance policies to protect their assets from fraud. Much like you pay auto insurance to protect your automobile in case of theft, loss or damage, First Tech carries insurance to protect itself from fraud, theft, etc. Once again, the members did receive 100% of their money back.
I appreciate the engaged discussion around this topic. Continual education and discussion makes us all more aware of how to protect ourselves.
Posted by Senior Blogger, a resident of the Palo Verde neighborhood, on Feb 25, 2012 at 2:42 pm
Thanks to Deborah Colby for explaining about the different kinds of insurance involved. It sounds like because First Tech is solvent, its equivalent of FDIC, NCUA, had no role to play. Also, it appears that First Teach was liable for the theft/fraud perpetrated by their employee, but that it carries another kind of insurance to cover the risk of loss resulting from fraud. In any case, it is a relief to know that the individual Credit Union members who were the initial victims of this fraud did not lose their savings. Many thanks for helping us understand the situation.