A debit card issued by NYC for participants in the Summer Youth Program was exploited by a scammer who raked in $17 million within just three days earlier this month, according to sources.
This fraud is currently under investigation, with reports indicating that ATMs across the city were targeted for substantial cash withdrawals from July 11 to July 13. The money didn’t end up in the hands of the intended young workers but instead went to illicit actors.
These payment cards typically provide access to weekly earnings, often amounting to a few hundred dollars. However, due to the error, the card could access up to $40,000 per transaction at ATMs.
On platforms like TikTok and Instagram, some teens and adults flaunted their gains from the cards, with one individual in a TikTok video exclaiming, “We’re making bread. Now we’re printing money. If you’re working at SYEP, hit me.”
On the flip side, some people cautioned against falling victim to such fraud.
City officials asserted that taxes have not been compromised, leaving it unclear who bore the financial brunt of these illegal withdrawals.
This case has gained attention, as both the NYPD and the Department of Youth and Community Development are investigating it. “We are deeply disturbed by con artists who prey on participants,” stated DYCD spokesperson Mark Zustovich, emphasizing the importance of helping these young individuals support themselves and their families.
Zustovich mentioned that they “actively educated participants about fraud,” aiming to ensure the safety of their funds as they navigate this system.
Investigators are currently piecing together the origin of the fraud and, as of Saturday, have not determined who was involved or which cards were compromised.
Youserf Mubairrez, CEO of ATM World Corp., noted that there were instances of five to ten transactions at once, and they recorded a staggering number of transactions—some amounts reaching up to 200 in a row.
According to ATM World Corp., it appears that the same card was repeatedly used on an ATM, resulting in a total of $43,000. While transactions had a cap of $200, there was no limit on the number of times cash could be withdrawn.
The Summer Youth Employment Program, the largest of its kind in the U.S., has 100,000 participants this year. Young workers, aged 16 to 24, often come from low-income backgrounds and typically have their first formal job, earning a minimum wage of up to $16.50 for 25 hours a week.
Participants with bank accounts receive direct deposits, but around 30,000 are set to be paid via the card system this year, as noted by the Times. This has been the practice since 2003.
