Chase Bank employees were convicted of running a credit card scheme that defrauded customers

In 2015, federal prosecutors convicted five Chase Bank employees of operating an unauthorized credit card scheme that affected thousands of customers. The employees, working from Chase branches in California, opened credit card accounts without customer consent, loaded them with fraudulent charges, and pocketed fees and commissions. The scheme ran for years before the bank's internal audit caught it.

This case became one of the most visible examples of employee fraud at a major U.S. bank. The employees were sentenced to federal prison, and Chase paid settlements to affected customers. Understanding what happened, how it was discovered, and what protections exist now can help you recognize warning signs in your own accounts.

Key Takeaways

  • Five Chase employees in California were convicted of opening credit card accounts without customer permission and charging fraudulent fees between 2009 and 2014.
  • The scheme was discovered through Chase's internal audit systems, not through customer complaints, which is why many victims did not know they had been harmed.
  • Chase paid millions in settlements to customers whose accounts were opened without consent, and the bank implemented new controls to prevent similar fraud.
  • You can check your Chase credit card accounts for unauthorized activity by reviewing your statements monthly and setting up account alerts.
  • If you discover unauthorized accounts or charges, contact Chase's fraud department when ready and file a dispute with the card issuer.

How the scheme worked and who was involved

The five convicted employees worked at multiple Chase branches in the Los Angeles area. They used customer information already in Chase's system—names, Social Security numbers, addresses—to open new credit card accounts without the customer's knowledge or consent. Once the accounts were open, they added themselves as authorized users or used the cards to make purchases.

The employees then collected fees and commissions from the fraudulent accounts. Some customers received bills for cards they never requested; others discovered the fraud only when they checked their credit reports or were contacted by debt collectors. The scheme operated for approximately five years before Chase's audit team identified the pattern of unauthorized account openings.

When the fraud was discovered and what triggered the investigation

Chase's internal controls flagged unusual account-opening patterns in 2013. The bank's audit department noticed that certain branches had significantly higher rates of new credit card accounts compared to others, and that many of these accounts showed signs of fraud—no customer contact information, no authorization documents, or when ready charges without customer activity.

Once Chase identified the problem, the bank reported it to federal law enforcement. The FBI and U.S. Attorney's Office in Los Angeles opened an investigation. By 2015, all five employees had been arrested and charged with wire fraud, identity theft, and conspiracy. Four pleaded guilty; one went to trial and was convicted.

The sentences and what Chase paid in settlements

The five employees received federal prison sentences ranging from two to five years. They were also ordered to pay restitution to victims, though the amounts were limited by their personal assets. The larger financial responsibility fell to Chase Bank itself.

Chase settled with affected customers and paid millions in compensation. The bank also paid penalties to federal regulators for failing to prevent the fraud and for inadequate internal controls. The exact settlement amounts varied depending on the customer's losses, but Chase committed to notifying all victims and offering credit monitoring services.

What Chase changed after the convictions

Following the convictions, Chase implemented stricter controls on credit card account openings. The bank added verification steps requiring documented customer consent before any new account could be created. Branch managers were given new oversight responsibilities, and the bank increased the frequency of internal audits specifically looking for unauthorized accounts.

Chase also expanded its fraud detection systems to flag accounts opened without proper documentation or customer contact. The bank created a dedicated team to review high-risk branches and implemented training for all employees on fraud prevention and the consequences of unauthorized account creation.

How to check your Chase accounts for unauthorized activity

Review your Chase credit card statements every month, either online through your Chase account or by mail if you receive paper statements. Look for accounts you do not remember opening, charges you did not make, or cards you never requested. Set up account alerts through the Chase mobile app or website to receive notifications when new cards are issued or large purchases are made.

Check your credit report annually through AnnualCreditReport.com, which is free and does not affect your credit score. Look for credit card accounts listed that you do not recognize. If you find unauthorized accounts, contact Chase's fraud department when ready at the number on the back of your card or through your online account.

What to do if you discover unauthorized Chase credit card accounts

Call Chase's fraud line right away. The phone number is on the back of any Chase card you have, or you can find it on your statement. Tell them you have discovered accounts you did not open. Chase will freeze the accounts and begin an investigation. Do not try to pay the fraudulent charges—the bank should remove them once fraud is confirmed.

File a dispute with Chase in writing, even after you have called. Send a letter to the address listed on your statement marked "Fraud Dispute" and include copies of any documentation showing the accounts are unauthorized. Also file a report with the Federal Trade Commission at ReportFraud.ftc.gov. If the fraud affects your credit score, you can place a fraud alert on your credit report by contacting any of the three major credit bureaus: Equifax, Experian, or TransUnion.

Frequently Asked Questions

Could this happen at other banks besides Chase?

Yes. Similar schemes have been uncovered at other major banks, most notably Wells Fargo, which had a much larger employee fraud scandal involving millions of unauthorized accounts. The Chase case was significant but not unique. All banks are required to have fraud prevention controls, but no system catches every case before customers are harmed.

If I had an account opened without my consent during this period, can I still file a claim?

Chase's settlement period has closed, but you can still contact the bank directly to report unauthorized accounts and request compensation. You may also have rights under federal law to dispute fraudulent charges and remove them from your credit report. Contact Chase's fraud department to discuss your specific situation.

How do I know if my information was part of a data breach versus employee fraud?

Employee fraud, like the Chase case, uses information the bank already has on file. Data breaches involve hackers stealing information from outside. If unauthorized accounts were opened using your name and Social Security number but you never gave Chase permission, it is likely employee fraud or identity theft. Chase will investigate once you report it.

What should I do to prevent this from happening to me in the future?

Monitor your credit reports regularly, set up account alerts with your bank, and review statements monthly. Do not share your Social Security number or personal information unnecessarily. If you receive a credit card or account statement you did not request, contact the bank when ready rather than ignoring it.