GloucesterTimes.com, Gloucester, MA

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May 10, 2013

Feds: Hackers stole $45M

NEW YORK (AP) — A worldwide gang of criminals stole a total of $45 million in a matter of hours by hacking their way into a database of prepaid debit cards and then draining cash machines around the globe, federal prosecutors said Thursday — and outmoded U.S. card technology may be partly to blame.

Seven people are under arrest in the U.S. in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks. The fraudsters moved with astounding speed to loot financial institutions around the world, working in cells including one in New York, Brooklyn U.S. Attorney Loretta Lynch said.

She called it “a massive 21st-century bank heist” carried out by brazen thieves.

One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of bills as they made their way up and down Manhattan.

Here’s how it worked:

Hackers got into bank databases, eliminated withdrawal limits on pre-paid debit cards and created access codes. Others loaded that data onto any plastic card with a magnetic stripe — an old hotel key card or an expired credit card worked fine as long as they carried the account data and correct access codes.

A network of operatives then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it wholesale to the global ringleaders. Lynch didn’t say where they were located.

The targets were reserves held by the banks to fund pre-paid credit cards, not individual account holders, Lynch said.

She called it a “virtual criminal flash mob,” and a security analyst said it was the biggest ATM fraud case she had heard of.

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