Group Steals $1 Million in Cash Advance Scheme
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UPDATED: Nov 12, 2012
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Fourteen people were charged in a case led by the Federal Bureau of Investigation (FBI) regarding the theft of over $1 million from Citibank. The money was stolen using cash advance kiosks at California and Nevada casinos.
According to an indictment, the defendants stole the money by exploiting a computer error in Citibank’s electronic transaction security protocols. The scam involved multiple cash advance withdraws within one minute.
The FBI, assisted by the Los Angeles Police Department and the Glendale Police Department, arrested 13 of the defendants in the Los Angeles area on Oct. 24 and 25.
Court documents state that the scheme started when defendant, 29-year-old Ara Keshishyan, recruited group members to open up several Citibank checking accounts. He supplied the members with “seed” money, which they deposited into the accounts. Afterwards, all 14 group members would travel to several casinos and use cash advance kiosks to withdraw, within 60 seconds, several times the amount of money deposited into the accounts. The money was attained due to a Citibank security gap discovered earlier. The casino cash advance facilities targeted were California’s Agua Caliente, Chukchansi, Morongo, Pechanga, San Manuel and Spa Resort, and Nevada’s Bicycle, Harrah’s, Tropicana, Wynn and Whiskey Pete’s.
After the cash was collected from the casino cash advance kiosks, Keshishyan distributed the group members’ financial cuts. Normally, the money was used to gamble at the casinos. To conceal the fraud, and avoid federal notices, the defendants kept both withdrawals and deposits under $10,000.
“While advancements in technology have created a world of accessibility to users and a convenience for consumers, they have also left room for criminals to exploit even the smallest of loopholes,” Daphne Hearn, FBI Special Agent in Charge said in a press release. “For over 100 years the FBI has kept pace with technological and communication changes in the business world where these types of electronic transactions are the standard and we will continue to do so in order to help protect commercial enterprise and our nation’s economy.”
Additional arraigned defendants include Ara Harutyunyan, Artur Harutyunyan, Vahe Asatrian, Sarkis Mooshidian, Migran Yamalyan, Seryozha Harutyunyan, Lianna Avetisyan, Ashot Oganisyan, Ovsep Sarfyan, Daniel J. Thomas, Hilda Hakverdyan, and Asatur Asatryan. One of the alleged group members, 58-year-old Levon Karamyan, remains at large.
The group members have been charged with “conspiracy to commit bank fraud and conspiracy to illegally structure financial transaction to avoid reporting requirements,” which is punishable up to five years in prison and a $250,000 fine. Keshishyan is additionally charged with 14 counts of bank fraud, each of which is punishable for up to 30 years in prison and a $1,000,000 fine.
A motions hearing is scheduled for Nov. 30 in San Diego.