FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
FEBRUARY 16, 2007
FOR IMMEDIATE RELEASE
SALISBURY MAN SENTENCED FOR BANK LARCENY
Stole Over $3 Million Deposited in His Account Through a Computer Error
BALTIMORE, Maryland - Kenneth Shockley, age 41, of Salisbury, Maryland, was sentenced today to two years in prison, followed by three years of supervised release for bank larceny after transferring, for his personal use, $3,429,020 from a closed business account which he discovered was being funded by a bank computer error, announced United States Attorney for the District of Maryland Rod J. Rosenstein. U.S. District Judge William D. Quarles, Jr. also ordered Shockley to pay restitution of $354,235. He credited against the restitution amount the recovery from the forfeiture of two personal vehicles and five trucks Shockley had purchased with the stolen money. In addition, Shockley agreed to turn over to the bank personal property purchased with the stolen funds, such as a television and jewelry, which the bank will then sell to apply to the restitution amount.
U.S. Attorney Rod J. Rosenstein said, "Anyone who is tempted to commit a crime because they believe that nobody will ever find out, should assume that someone eventually will find out."
According to the statement of facts provided to the court on October 25, 2006, as part of his plea agreement, Shockley was the owner and operator of North America Logistics Services, a trucking company located in Hurlock, Maryland and New York. In March 2002, Shockley opened a bank account in the name of his company with Transportation Alliance Bank. After numerous overdrafts were made, the bank closed the business account in February 2003 with an account balance of $10.86.
The bank re-opened the business account for its own internal accounting purposes. From February 2003 through March 2004, Shockley had no transactions on the account. Bank employees attempted to re-close the account in December 2004. During this attempt, a computer logic error occurred and the bank automatically began compounding and crediting service fees to the account.
In mid April 2005, Shockley discovered that the old, closed business account was open and that he could access the account through the Internet. Shockley initially transferred $500 from the closed account to a separate operating account in his own name. Shockley had made no deposits to the closed account.
Upon the success of the first transfer, Shockley began to transfer additional funds from the closed account to his personal account. Each transfer caused the bank’s faulty computer logic program to make a larger compounded credit to the business account and to increase the available bank balance. Between April 14, 2005 and May 17, 2005, Shockley moved $3,429,020 in 31 transactions from the closed business account to his personal account.
Shockley spent funds from his personal account for a new Yukon Denali and a used Mercedes Benz. He also purchased trucks for his business. In addition, Shockley spent $49,000 at retail stores using a debit card from his personal account, which he funded with the bank's money. He also deposited money in accounts owned by his wife, brother and an employee.
On May 20, 2005, Shockley sought to wire an additional $500,000 out of his personal account. This large wire transfer request caused the bank to examine the account and then shut down Shockley’s accounts. At that time, the available balance erroneously in the closed business account was almost $15 million.
United States Attorney Rod J. Rosenstein praised the investigative work performed by the Federal Bureau of Investigation. Mr. Rosenstein also thanked Assistant U.S. Attorney Joyce K. McDonald, who is prosecuting the case.