Fraud Against Seniors Often Is Routed Through Banks The pitch arrived, as so many do, with a friendly cold call. Bruno Koch, 83, told the telemarketer on the line that, yes, of course he would like to update his Medicaid card. Then Mr. Koch, of Newport News, Va., slipped up: he divulged his bank account information. What happened next is all too familiar. Money was withdrawn from Mr. Koch's account for something that he now says he never authorized. The new health insurance card never arrived. What is less familiar - and what federal authorities say occurs with alarming frequency - is that a reputable bank played a crucial role in parting Mr. Koch from his money. The bank was the 140-year-old Zions Bank of Salt Lake City. Despite spotting suspicious activity, Zions served as a gateway between dubious Internet merchants and their marks - and made money for itself in the process, according to newly unsealed court documents reviewed by The New York Times. The Times reviewed hundreds of filings in connection with civil lawsuits brought by federal authorities and a consumer law firm against Zions and another regional bank that has drawn even more scrutiny, First Bank of Delaware. Last November, First Delaware reached a $15 million settlement with the Justice Department after the bank was accused of allowing merchants to illegally debit accounts more two million times and siphon more than $100 million. The documents, as well as interviews with state and federal officials, paint a troubling picture. They outline how banks profit handsomely by collecting a variety of fees while ignoring warnings of potential fraud and, in some instances, enabling dubious merchants to prey on consumers. Anyone, young or old, can be targeted by unscrupulous marketers. But for a variety of reasons - financial worries, age, loneliness - older people are particularly vulnerable to what is known as mass market fraud, deceptive pitches that arrive by telephone, mail and the Internet. The problems at Zions and First Delaware, where the banks became financial conduits and quiet enablers for questionable businesses, extend well beyond those two institutions, federal authorities say. Indeed, banks across the country, from some of the largest to smaller regional players, help facilitate billions of dollars of fraud each year, according to interviews with consumer lawyers and state and federal prosecutors. Officials at the Justice Department say they are taking aim at banks" role in giving predatory lenders and fraudulent merchants access to the United States financial system. The department is considering civil and criminal actions against a number of banks for allowing tainted money to flow through branches, for failing to safeguard against suspicious merchants, and for originating transactions on behalf of businesses that they know make unauthorized withdrawals from customer accounts, according to people with direct knowledge of the matter. "You can't close your eyes anymore to the fraud that you are allowing to happen," said Michael Blume, the director of the consumer protection branch at the Justice Department. Banks are in business to make a profit. Unfortunately, this is a moneymaking operation at consumers" expense." Zions did not interact directly with the company that called Mr. Koch, National Health Net Online. What the bank did was establish a banking relationship with an intermediary, Modern Payments, that handled payments for National Health. Mr. Koch's account at a small Virginia bank was debited by National Health, which in turn paid Modern Payments for processing the transaction. Modern Payments gave its bank, Zions, a cut of its fee. In all, Zions in effect let roughly $39 million be withdrawn from hundreds of thousands of accounts from 2007 to 2009. Much of that money was ultimately transferred to bank accounts in Canada, India and the Caribbean, according to a Times review of court records. Many of the Internet merchants" customers were older people and others on shaky financial footing. But that, too, worked in banks" favor: the withdrawals set off a cascade of insufficient fund fees - more than $20 million in all, court records show.