NORFOLK, Va. — Hundreds of Navy Federal Credit Union members have been victimized in a long-running scam that cost millions of dollars, federal prosecutors said this week. Ten people have been arrested on fraud and conspiracy charges in connection with the scheme, which specifically targeted military service members.
According to court documents, the suspects approached victims outside grocery stores and gas stations, claiming they did not have a cellphone. They then asked if the person had a phone and an account with Navy Federal, using that interaction to carry out the fraud. Authorities believe the scam operated for years before being dismantled.
Prosecutors said these scammers would then ask for the phone, pleading that they were in a financial emergency and were locked out of their own account. If the victim agreed, prosecutors said the scammers would instead log into the victim's account and take out loans worth thousands of dollars in their name, 13 News Now said.
The scammers would then transfer the money to other apps like Zelle or Cash App, with their victim none the wiser.
"This can happen in literal seconds," Greg Tomchick, with Valor Cybersecurity, told 13 News Now. "All they need is access to your phone, and it rapidly goes downhill from there."
Court documents showed that those who resisted were sometimes met with force. In some instances, the suspects "physically took the mobile device from the mark and held it to the mark's face to obtain biometric access," 13 News Now reported.
In another case, prosecutors said a suspect showed a gun as a threat to be let in.
Attorneys believe upwards of 500 people could be victims in Hampton Roads alone, and the projected loss is up to $2 million.
"They're going to keep trying more people until they find that 'nice' person in the community that allows them to do it, and sometimes that niceness comes back to bite you," said Tomchick.
13 News Now said Navy Federal released a statement following the indictments:
“We urge our members to treat their phones with the same level of caution as they would their wallets. If approached by someone asking to borrow your phone, especially in a public setting like a parking lot, we recommend declining and offering to make the call or transfer on their behalf if necessary. We also encourage members to enable additional security features within payment apps—such as Face ID or biometric authentication—on platforms like Venmo, Cash App, and Zelle to help prevent unauthorized access.”