JPMorgan begins suing customers allegedly robbed of thousands of dollars in ‘endless cash blunder’ – NBC New York

• JPMorgan Chase has begun suing customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical glitch that allowed them to withdraw funds before the check bounced.
• The bank filed lawsuits in at least three federal courts on Monday, taking aim at some of the people who took the biggest sums in the so-called infinite money crash that went viral on TikTok.
• The Houston case involves a man who owes JPMorgan $290,939.47 after an unidentified accomplice deposited a counterfeit $335,000 check into an ATM, according to the bank.

JPMorgan Chase began suing customers who allegedly stole thousands of dollars from ATMs by taking advantage of a technical failure which allowed them to withdraw funds before the check bounced.

The bank filed lawsuits in at least three federal courts on Monday, targeting some of the people who made the biggest withdrawals in the so-called infinite money crash that occurred viral in TikTok and other social networks platforms at the end of August.

The Houston case involves a man who owes JPMorgan $290,939.47 after an unidentified accomplice deposited a counterfeit $335,000 check into an ATM, according to the bank.

“On August 29, 2024, a masked man deposited a check into the defendant’s Chase bank account in the amount of $335,000,” the Texas bank said in a statement. “After the check was deposited, the Defendant proceeded to withdraw the vast majority of the ill-gotten funds.”

JPMorgan, the largest U.S. bank by assets, is investigating thousands of possible cases related to the “infinite money failure,” although it has not disclosed the extent of the losses. Despite the decline in the use of paper checks as digital forms of payment gain popularity, they are still a major method of fraud, leading to 26.6 billion dollars in global losses last year, according to Nasdaq’s Global Financial Crimes Report.

The episode with the never-ending money glitch highlights the risk that social media could amplify vulnerabilities discovered at a financial institution. Video began to spread in late August, showing people celebration withdrawing wads of cash from Chase ATMs shortly after depositing bad checks.

Banks usually only provide a small portion of the value of the check until it clears, which takes several days. JPMorgan says it closed the loophole days after discovering it.

Miami and California

Other lawsuits filed Monday are pending in courts including Miami and the Central District of California, and involve cases where JPMorgan says customers owe the bank amounts ranging from $80,000 to $141,000.

Most of the cases the bank is handling involve much smaller sums, said people familiar with the situation, who declined to be identified, speaking about the internal investigation.

In each case, JPMorgan says its security team contacted the alleged fraudster, but she was not reimbursed for the fake checks, a violation of the deposit agreement customers sign when they set up a bank account.

According to the complaints, JPMorgan is seeking the return of the stolen funds, along with interest and overdraft fees, as well as attorneys’ fees and, in some cases, punitive damages.

Criminal cases?

The lawsuits are likely to be just the beginning of a wave of lawsuits aimed at forcing customers to repay their debts and sending a broad signal that the bank will not tolerate fraud, people familiar with the matter said. According to them, JPMorgan prioritized cases with large dollar amounts and signs of possible ties to organized crime.

Civil cases are separate from potential criminal investigations; JPMorgan says it has also referred cases to law enforcement agencies across the country.

“Fraud is a crime that affects everyone and undermines trust in the banking system,” JPMorgan spokesman Drew Pusateri said in a statement to CNBC. “We are investigating these cases and actively working with law enforcement to ensure that if anyone commits fraud against Chase and its customers, they are held accountable.”