The trick made use of a tiny loophole in Citigroup's electronic payment system.
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ATM frauds are not that uncommon but a recent ATM fraud, that was discovered, shows just how intelligent and well-concocted they can be. A group has now been nabbed for defrauding $1 million from Citigroup through a simple ATM trick.


ATM fraud

The fraud was perpetuated by a group of people, carried out in California and Nevada. It comprised of withdrawing exactly same sums of amounts from multiple ATMs in different locations, from the same bank account. The multiple cash requests were made within the same 60-second interval.

A loophole in the electronic payment system of Citigroup made the system treat all these transactions as duplicates of one and the same transaction. As a result, the group was able to withdraw huge sums of money from their bank accounts, far greater than the actual sum that had been deposited.

According to the prosecutors who are now trying the alleged fraudsters in a federal case, “In order to obtain the case, the conspirators exploited a loophole in Citi’s account security protocols, which caused Citi’s account reconciliation systems to treat identical, near-simultaneous withdrawals as duplicates of a single withdrawal from an individual Citi Checking account.”

With the help of the fraudulent scheme, Ara Keshishyan and his team of 13 people, was able to nick off a total of $1 million from Citigroup which it then spent on gambling and other perks in Las Vegas. Now that the fraud has been uncovered, the defendants may be sentenced to five years in prison and up to $250,000 in fine. The ring leader, for his additional counts of fraud, may be in for 30 years and up to $1 million fine.

Source: FBI

Courtesy: Arstechica

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  On October 31, 2012(3 years, 11 months ago.)

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