You may recall press reports last year about the theft of 94,000 debit and credit card account numbers from customers of some 84 Michaels Stores Inc. stores across the United States. That crime was accomplished by replacing the stores's personal identification number pads used to process card transactions with fraudulent devices, which compromised the entered confidential information and downloaded it for subsequent fraudulent use. Once in possession of consumers' identification information, the criminals engaged in tens of thousands of fraudulent card activity.
FRankly, it's becoming an old story. Street Sweeper has reported about such scams hitting major financial institutions such as Citibank, JP Morgan Chase,Bank of America, credit card companies such as Discover, the Subway sandwich chain, and even hotels and other businesses. The bad guys keep ripping us off. The prosecutors keep charging them. The judges keep sending them to jail. And then, alas, the cycle starts all over again as more bad guys rip off more consumers.
In a federal criminal Information filed in Oakland,CA on March 5, 2012, Eduard Arakelyan, 21, and Arman Vardanyan, 23, were charged with one count each of:
- conspiracy to commit bank fraud,
- bank fraud and
- aggravated identity theft.
The charges arose in connection with a scheme to defraud debit-card holders by using stolen bank account information to withdraw money from ATMs. On March 20, 2012, Arakelyan and Vardanyan pleaded guilty.
According to the pleas and Information, Arakelyan and Vardanyan admitted that around July 2011, they used 952 blank Gold and Silver credit card-like cards that had been encoded with bank and personal identification stolen from Michaels Stores customers - and then withdrew from ATMs in Northern California as much money as possible. Arakelyan and Vardanyan possessed two loaded firearms, a GPS device pre-programmed with ATM locations and eight mobile telephones.
On July 24, 2012, Arakelyan and Vardanyan were each sentenced yesterday to serve:
- 36 months in prison on bank fraud and conspiracy charges,
- 24 months in prison for the identity theft charge (to be serve consecutively with the prior 36 months); and
- 5 years of supervised release after serving their prison time.
The two were also ordered to pay $42,043 in restitution.
READ these additional "Street Sweeper" columns:
EZ Pass Fraud Using Stolen Credit Cards Seems Too Easy
In excess of $2 million worth of unauthorized charges on more than 1,000 credit or debit card accounts at Citibank, JP Morgan Chase, Bank of America, and Discover, among others.
Hotel Theft Ring Stole 500 Credit Card Slips
When you check into the next Marriott, Hyatt or Hilton, will you be getting far more than a free mint on my pillow?