It took less than three days for $17 million to disappear from A.T.M.s across New York in a scam that went viral on TikTok and city officials say is linked to a youth jobs program, according to two law enforcement officials briefed on the matter.
The withdrawals, using payment cards issued to thousands of young people in the program, should have given users access to only that week’s earnings — perhaps several hundred dollars at most. Instead, they opened a spigot of unlimited cash available in sums of $10,000, $20,000 and even $40,000 per A.T.M.
There were as many as 30,000 cards issued to 14- to 24-year-olds who could not be paid via direct deposit. The fraudulent use, from July 11 to 13, is being investigated by the city agency that oversees the program and by the Police Department’s Financial Crimes Task Force.
Some of the young people in the program were selling their cards for $1,000 apiece, according to the law enforcement officials, who spoke on the condition of anonymity because they were not authorized to speak publicly about an active investigation.
In videos on TikTok and Instagram around the time the scam was underway, some teenagers and adults boasted about it and encouraged people to sell their cards to them.
“We’re making bread, we’re printing money right now,” one man said in a video posted on TikTok. Referring to the jobs program, the Summer Youth Employment Program, he added: “If you work S.Y.E.P., hit me up.”
Other TikTok users warned people about falling for the “S.Y.E.P. scam.”
A spokesman for the agency that oversees the program, the Department of Youth and Community Development, suggested in a statement that the young people whose cards had been used for illicit activity were victims of criminals who had exploited their naïveté.
“We are deeply disturbed by scammers preying on our participants just as they started their work assignments to support themselves and their families,” the spokesman, Mark Zustovich said. He also said no taxpayer funds had been lost to the fraud; it was not clear who would ultimately be responsible for absorbing the cost of the illicit withdrawals.
Many elements of the scam remain unclear, including how it began, what made it possible, how many of the payment cards and A.T.M.s were used, and who exactly made the withdrawals. Mr. Zustovich declined to comment on these specifics, including how much money had been taken.
The jobs program is the largest of its kind in the United States, with 100,000 participants this year. It offers young people, many from poor and minority families, what are often their first formal jobs and their first direct interaction with the financial system.
Those enrolled in the program are placed in various industries for six-week stints, with participants ages 16 to 24 paid the $16.50 minimum wage for up to 25 hours a week. Younger workers are paid less. About 70 community-based organizations operating under contracts with the city help place the young people in jobs.
Participants with bank accounts are paid by direct deposit. Since 2003, those without bank accounts have received payment cards that can be taken to A.T.M.s to obtain their earnings in cash. Roughly 30,000 were set up to be paid by card this year, according to the youth department.
The fraud began on a Friday, city officials said. For many in the program, it was their first payday ever.
By that evening, companies that operate A.T.M.s in the city began to get reports that their machines were being plundered, said Youssef Mubarez, the chief operating officer of one such company, ATM World Corp.
“Students or other people who had the card just started going to A.T.M.s and pulling out unlimited loads of cash, 10, 15, 20,000 dollars at a time,” he said. He noted that because of withdrawal limits, the money was taken out $200 at time.
In at least one instance, he said, the withdrawals went on for an hour straight, with the owner of the store with the A.T.M. oblivious to what was going on. His company estimates that $400,000 was taken from its machines, including $43,000 taken from one.
The fraudulent activity surged the next night, Mr. Mubarez said. By early that Sunday, the cards had been deactivated and the scam had been halted, the youth department said.
In his statement, Ms. Zustovich, the spokesman, said that this year, as in previous years, part of the jobs program involved teaching participants financial literacy.
In a series of Instagram posts, the department warned participants to beware of scams.
“Keep Your S.Y.E.P. Money Safe!” the post said. “Protect Your S.Y.E.P. Card & Personal Information.”
The messages were posted on July 14, the day after the scam had been stopped.
Dana Rubinstein contributed reporting.
Ed Shanahan is a rewrite reporter and editor covering breaking news and general assignments on the Metro desk.
Chelsia Rose Marcius is a criminal justice reporter for The Times, covering the New York Police Department.
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