Federal authorities have charged former Dwelling House Savings & Loan customer Jammie E. Harris, also known as Jammie E. Williams with exploiting a lack of computer security to steal $1,101,264.60 from the bank over an 11-month period in 2008.

In an indictment made public Sept. 8, a federal grand jury charged Harris, 45, of Hazelwood, with diverting funds from the defunct Hill District bank to a PayPal account through 272 transactions between February and December, 2008.

Attorney Marty Dietz, who specializes in federal defense work, said the chances that Harris found this glitch in the security system by herself are exceedingly slim.

“I would say someone somewhere had to clue her in,” he said. “I mean, how many red flags did she set off? She either had help, or, if she did figure it out, she advised others how to do it.”

Dietz said, if he hasn’t already, he would expect the U.S. Attorney to interview her. He may have already, in which case it would be in her interest to cooperate.

“Judges in the federal system here, will typically cut sentences in half when defendants cooperate,” he said. “They obviously didn’t bring all the charges they could. I mean, 272 transactions—that’s 5,420 years at the maximum.”

The indictment lays out how Dwelling House failed to heed warnings about its cyber-security, even after being fined by the FDIC, that left the institution vulnerable to online theft.

At that time, Dwelling House had an operating account with PNC. When electronic transactions between the banks were miskeyed, the difference was held so the transaction could be reversed or rejected. Dwelling House did not do this “in a timely fashion,” leaving the difference vulnerable.

Harris, the indictment claims, became aware that through this process, funds would be paid regardless of the account balance at Dwelling House. She then set up a PayPal account, linked it to her Dwelling House account and began moving money—as much as $25,000 at a time—from her bank account to the PayPal account.

Harris then sent money electronically to a checking account at the Hill District Federal Credit Union, and to pay off numerous “pay day” loan companies. Harris, who is in the Allegheny County Jail on drug charges, is scheduled for a formal indictment Sept. 21.

Dwelling House was closed and its customer accounts transferred to PNC by the federal Office of Thrift Supervision in August 2009 after it was discovered to be insolvent due to the computer theft of more than $3 million.

Neither the indictment nor federal officials indicated if any of the money Harris allegedly stole was recovered, nor would they comment on how she “became aware” of the security glitch.

The U.S. Attorney’s Office would not comment on when or if further grand jury indictments would be handed down, nor would they say if they have any leads on the remaining stolen funds.

The late Robert R. Lavelle, founder of Lavelle Real Estate, essentially rescued Dwelling House from near ruin in 1957. At that time his real estate company was seeking a mortgage on a nearby property, but was told the association could not comply due to withdrawals exceeding liquid assets.

Open only a few days of the month, Lavelle suggested they open full time, that they share space with his firm, so they could afford to staff the then-Dwelling House Building and Loan Association until it grew.

And grow it did, slowly, at first. But after qualifying to become federally insured in the late 1960s, its assets grew from $130,000 to more than $1 million in just two years.

And all the while, Dwelling House made the mortgage loans other banks would not, to African-Americans with poor credit—and it held those loans to maturity rather than selling them. Lavelle passed away July 4 at the age of 94.

(Send comments to cmorrow@new­pitts­burgh­courier.com.)

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