Arrest warrants were issued Tuesday for 11 students accused of a money laundering conspiracy as part of an organized fraud scheme against the MSU Federal Credit Union, MSU police said.

Police also are seeking warrants for four more students on similar charges.

Money laundering is disguising illegally obtained money in a financial system, such as a bank, and conspiring to do so is a 20-year felony.

The 11 students were allegedly involved in an organized scam that resulted in more than $57,100 being taken from the bank in mid-March, Sgt. Florene McGlothian-Taylor said. Nine of those students were arrested last month and the other two were listed as suspects.

She said another four students reportedly carried out a similar scheme a couple of weeks later.

All of the students had accounts with MSU Federal Credit Union, McGlothian-Taylor said.

The scam begins when people recruit others to either give or sell their ATM cards and PIN numbers in exchange for extra money in their bank accounts, said Catherine Lynch, vice president of member services for MSU Federal Credit Union.

They then deposit stolen or bad checks — sometimes even empty envelopes — into the ATM, and withdraw money before bank employees notice the checks are bad, leaving some money in the account for the ATM card owners.

If questioned, card owners are advised to tell bank employees their cards were stolen or that relatives deposited the money into their accounts, Lynch said.

"Our tellers are trained to recognize these stories and what's happened on the account," she said. "We're familiar with the scenarios. This isn't the first year this has happened. It's a common scam."

The scams were larger than usual, said Lynch, adding that bank employees caught on to them early.

Lynch said this type of fraud happens all over the country, but high school and college students who might not know a lot about the banking system tend to get recruited for the scam.

"What's really sad is they got into a Big Ten college — they must have something going for them, and they're risking their futures for a few hundred dollars," she said. "We find that that's probably even worse than the money we're out."

Melissa Domsic can be reached at domsicme@msu.edu.