Man Allegedly Bilks E-trade, Schwab of $50,000 by Collecting Lots of Free ‘Micro-Deposits’

Man Allegedly Bilks E-trade, Schwab of $50,000 by Collecting Lots of Free ‘Micro-Deposits’ | Threat Level from Wired.com


A California man has been indicted for an inventive scheme that allegedly siphoned $50,000 from online brokerage houses E-trade and Schwab.com in six months — a few pennies at a time.

Michael Largent, 22, of Plumas Lake, California, allegedly exploited a loophole in a common procedure both companies follow when a customer links his brokerage account to a bank account for the first time. To verify that the account number and routing information is correct, the brokerages automatically send small “micro-deposits” of between two cents to one dollar to the account, and ask the customer to verify that they’ve received it.
Hankhill
Michael Largent allegedly used a script to open 58,000 online brokerage accounts in the names of cartoon characters, and other aliases.
Hank Hill courtesy Fox Broadcasting

Largent allegedly used an automated script to open 58,000 online brokerage accounts, linking each of them to a handful of online bank accounts, and accumulating thousands of dollars in micro-deposits.

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