Bank with 25 branches in Philly area may have lost $90 million as a result of a customer overdraft
The Cleveland-based Key Bank has 25 branch offices in the Philadelphia region.
KeyCorp, the parent company of Key Bank which has 25 branches in the Philadelphia region, disclosed in an earnings call Tuesday that it had been hit by a fraudulent wire-transfer that may ultimately cost it $90 million.
Key, headquartered in Cleveland, filed a federal civil suit on July 10 against customer Interlogic Outsourcing, Inc, a payroll processing company based in Indiana. In the lawsuit, Key alleged that Interlogic’s founder Najeeb Khan made a set of complicated wire transfers to other financial institutions on July 5 and July 9 totaling about $220 million. That was about $100 million more than the company had on deposit.
In a call with industry analysts, Key said it may be exposed to a $90 million loss if it is unable to recover the funds. In a statement, Key said it was “currently investigating a processing irregularity that indicates fraud has been perpetrated by a single business client.”
The company believes it was “an isolated incident,” but could not comment further. Interlogic did not immediately respond to requests for comment.