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May 21

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ATMs Robbed – No Guns Involved!

Banking is changing these days.  You don’t even need to go into the bank to deposit checks anymore, you can do it right from your smartphone.  Even if you go into the bank, certain banks have ATM or other sophisticated computer modules in order for you to handle transactions so you do not have to see a banker.  This change in banking has opened up new ways for fraudsters to commit fraud against banks.

The Washington Post reports that a group of 8 men stole over $45 million from worldwide bank ATMs.  The thieves did not have to use any guns in their scheme, it was a cyber-attack.  Authorities had not seen a crime like this before.  The scheme involved computer networks in the U.S. and India being hacked, where the hackers removed, or substantially increased, limits on withdrawals for debit cards.  Next, the crew set out with account data received from the hacked networks (i.e. debt card numbers and related PINs) programmed on gift or other disposable cards.  The fraudsters did two round of the scheme before getting caught.  The first round included 4,500 ATM transactions worldwide, with $5 million being withdrawn.  The second round, conducted a few months later, involved 36,000 ATM transactions with $40 million being withdrawn.  Seven of the eight alleged fraudsters have been arrested.  The eighth man was reported to have been killed in the Dominican Republic last month.  Authorities from across the globe assisted in the investigation.

Broadening the way transactions occur opens up financial institutions to increased opportunities for fraud.  Financial institutions need to continue to work to stay abreast of potential weaknesses that put them at risk.  The future of these innovations in banking may be threatened if these types of frauds cannot be kept under control.

About the author

Anand Khemlani

I am a founding member of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), a Certified Fraud Examiner (CFE) and am a licensed Real Estate Broker. I regularly serve as an expert witness involving results of my forensic accounting assignments and damage analyses. My resume is available on Fulcrum's website

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