JPMorgan Chase Sues Over “Infinite Money Glitch” Check Fraud

JPMorgan Chase is suing individuals who exploited a social media-driven scam dubbed the “infinite money glitch” in which individuals deposited fraudulent checks and quickly withdrew funds before detection. CEO Today wrote about the cases, calling them a “wake-up call” for banks worldwide.

The cases illustrate the risks associated with the intersection of digital banking and social media-fueled schemes. In August 2023, the “infinite money glitch” gained traction through social media platforms like TikTok and Instagram. Viral posts accompanied by step-by-step tutorials, showed users how to deposit fake checks and withdraw funds during a brief window of system delay.

The scam relied on exploiting vulnerabilities in the bank’s check verification processes, particularly during weekends or holidays. It is a digital twist on traditional check-kiting fraud.

JPMorgan Chase filed lawsuits in Texas, Florida, and California, targeting individuals who allegedly participated in the fraud. In the Texas case, JP Morgan Chase Bank, N.A. v. Timipah Ikemi Texas Southern District Court, a Houston man is accused of depositing a $335,000 fake check and withdrawing $290,939 before the fraud was detected. Chase is working with law enforcement to recover stolen funds, overdraft fees, and legal costs.

Legal teams should prepare to handle an increase in fraud-related litigation as banks adopt aggressive stances against such crimes. Those advising financial institutions should stress the importance of proactive fraud detection systems, robust internal controls, and legal strategies for deterring similar schemes.

The case also highlights the role of social media in amplifying fraudulent activities, underscoring the need for legal counsel in addressing potential platform liabilities.

CEO Today highlighted the impact on the broader banking industry as well.

“This incident serves as a wake-up call for banks worldwide, reminding them that vigilance in fraud detection is essential in an era of digital-first finance,” wrote the publication. “Financial experts predict that this wave of lawsuits could discourage similar activities in the future. If banks adopt a more aggressive legal stance against fraud, potential scammers may think twice before trying to exploit system vulnerabilities.”