LOS ANGELES – A San Bernardino County man was sentenced today to 51 months in federal prison for causing more than $2.4 million in losses to Wells Fargo & Co. by orchestrating a scheme in which he gained control of hundreds of other people’s checking accounts to make phony fraud loss claims.
Steven Michael Banks Hubbard Jr., 38, of Rialto, was sentenced by United States District Judge Christina A. Snyder, who also ordered him to pay $2.4 million in restitution.
Hubbard pleaded guilty on June 28 to one count of bank fraud and one count of aggravated identity theft.
From May 2015 to July 2019, Hubbard executed his scheme, first by obtaining control of the checking accounts from the account holders, sometimes using a third party to do so. Hubbard then would deposit money – typically approximately $2,000 – into the account. Typically on the same day or shortly after the deposit, Hubbard withdrew the money from an ATM and also had third parties make purchases from that account. Then, posing as the account holder, he called Wells Fargo to report that the funds had been withdrawn and the purchases made, without authorization.
Relying on Hubbard’s representations that the cash withdrawals and purchases were unauthorized, Wells Fargo granted a provisional credit of funds into the checking account. Once Wells Fargo deposited the provisional credit into the account, Hubbard allegedly immediately withdrew that money as well. In some instances, Hubbard repeated the scheme on the same account until Wells Fargo closed the account due to fraudulent activity.
Hubbard caused more than $2.4 million in losses to Wells Fargo and involved more than 900 bank accounts in this criminal activity. The bank reported Hubbard’s “bust-out” scheme to law enforcement.
“[Hubbard] engaged in a well-developed, but not particularly sophisticated, scheme to defraud over $2.4 million from Wells Fargo,” prosecutors wrote in a sentencing memorandum. “He exploited a policy intended to help real fraud victims obtain immediate relief.”
The FBI investigated this matter with assistance from the United States Secret Service, the Rialto Police Department and investigators from Wells Fargo.
Assistant United States Attorney Jerry C. Yang, Chief of the Riverside Branch Office, prosecuted this case.