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A branch that accepts a deposit into one of its accounts from another branch fills out a transfer ticket. The credit page is deposited in the local branch, creating an electronic balance that can be withdrawn by the account's owner, while the debit page is sent to the other branch to signal it to draw down its own balance correspondingly.
Lewis had his own way of processing tickets. He would fill out a ticket for, say, $100,000. The credit portion of the form would be deposited in a MAPS account in Beverly Hills, with the notation that the money was coming from a MAPS account at another branch, for example, the Wells Fargo Santa Monica office. But Lewis would hang on to the debit page of the ticket and not forward it to the Santa Monica branch at all. In this way, the funny money in the MAPS Beverly Hills account could go undetected for five days.
On the fifth day, Lew is would repeat the process, this time by writing up a new ticket for a larger amount of money. He would then cover his heist of five days earlier by forwarding the credit slip from the new ticket, along with the debit slip from the old ticket, to the Santa Monica branch, causing the MAPS account in that branch to appear to be not just in balance, but flush with new funds. These too could then be drawn down and go unnoticed for five days.
The scheme ran smoothly from late 1978 until early this year. But as the size of the theft grew, Lewis found it tougher to avoid detection. Wells Fargo's computers are programmed to sound a warning on transactions above $1 million. To prevent that, Lewis wound up having to make weekly entries involving as many as 25 different tickets for amounts up to $900,000 or so.
In the end, the Lewis juggling act was exposed by a slipup. Lewis inadvertently shipped off the wrong page of a transfer form, and rather than create a credit, which he had intended to do, set up a branch office debit instead. The computer alarms sounded, and the dimensions of the fraud began to surface.
The caper makes plain that bank electronic funds-transfer systems are only as trustworthy as the people who use them. Lewis knew the procedural ropes, having earlier in his eleven years with Wells Fargo worked in the bank's computer center. Though federal officials regard Wells Fargo as a well-managed bank, some critics have wondered whether Lewis' scam went on so long in part because the bank has been adding so many branches—nine a year—that finding competent supervisors has been difficult. Cooley concedes that Lewis found "a flaw in our system." But the bank has changed its $1 million "trigger point" and the five-day timing safeguard. Also, Cooley asserts, "we have done a couple of other things no one will ever know about ."
—By Christopher Byron. Reported by Paul A. Witteman/Los Angeles