(2 of 2)
At 8:30 a.m. on May 13, a gang member posing as a Merrill Lynch executive called First Chicago to arrange the transfer of $24 million to the account of "Lord Investments" in Vienna's Creditanstalt bank. He first heard a taped message: "This is First Chicago transfer operations. Your transaction is being recorded." Unfazed, the caller placed the order with one of Taylor's unwitting co-workers. Taylor pretended to phone another Merrill Lynch official for backup confirmation. He really called the Chicago home of Bailey, who gave an authentic-sounding "approval" as the tape rolled. The $24 million was promptly wired to New York's Citibank for later transfer to Vienna.
At 9:02 came another call, purportedly from Brown-Forman (makers of Jack Daniel's whiskey). A few code words and computer keystrokes later, and $19.7 ( million slid with the smoothness of sipping bourbon from Brown-Forman's account, through the New York computers of Chase Manhattan Bank and into the account of "Walter Newman" at Vienna's Focobank. At 9:34, an additional $25 million flew from the ledgers of United Airlines to Citibank for relay to the account of "GTL Industries" at Creditanstalt.
On Monday, May 16, the plan broke down -- for the most banal of reasons. United and Merrill Lynch did not have enough funds in their accounts to cover outstanding checks, which started to bounce, alerting First Chicago officials that something was amiss. The bank traced the problem to Taylor and called in the FBI. Taylor named his coconspirators and agreed to make incriminating phone calls to Moore and the others that the FBI taped as evidence. Although Brown-Forman's funds were credited in Vienna, the money taken from United and Merrill Lynch was intercepted at Citibank before it left the country.
Investigators were amazed at how far the scheme proceeded before being discovered. If the gang had settled for smaller amounts or picked accounts that were less active, the crime might have gone undetected long enough for the culprits to withdraw the money from the Viennese banks. Says an investigator connected with the case: "They came a lot closer than the banks want to acknowledge."
What worries crime experts is that wire transfers, which banks use to zap some $1 trillion in funds around the globe each week, could be so susceptible to security breaches. Says a senior officer of First Chicago: "It's impossible to do something like this without the help of an insider. But once you have the insider, it's almost a childlike process."
The Chairman and his board of embezzlers made crucial mistakes, but they exposed many of the flaws in the banks' security systems. If those flaws are not fixed, copycat crooks may try new, improved versions of the scheme. Warns First Chicago Spokesman Anthony Zehnder: "There are a lot of people out there taking notes."