Seems like your cell phone is out of date by the time you get around to buying a protective case for it. That’s how fast technology changes for criminals and the law enforcement agencies chasing after them as well.
Skimmers began to show up on the criminal radar a couple of years ago, but the devices investigators first ran into were clunky machines that still left plenty of risk for whoever planted and picked them up to collect the data.
That meant criminal enterprises hired “runners” to plant the devices at ATMs, gas station pumps and other places were people readily used their ATM.
The devices needed space for memory and a camera planted nearby to pick up the victim’s pin.
The devices law enforcement is running into now are as small, smart, and convenient. They are blue-tooth enabled, small, unobtrusive and less risky for the criminal who needs only park close enough to get the information transferred wireless.
“It’s like installing a virus,” Sgt. Scott Spalding of the Orange County Sheriff Department’s economic and computer crimes detail.
In this story, Spalding and other investigators shared their work with the Glendale Police Department, leading to the arrest of seven people in a sophisticated skimming scheme. They also shared details about some of the technological advances that have made these financially devastating machines as accessible as $50-worth of equipment from Fry’s.
The devices, which steal personal information, are becoming smaller and less obtrusive – making them harder to detect and easier for criminals to use.
Electronic devices used to steal credit-card information are getting smaller, more sophisticated and harder for authorities to spot.
The clunky devices investigators once found mounted at ATM kiosks and gas pumps are a thing of the past. Unobtrusive, blue-tooth enabled devices made from $50 worth of electronic hardware have been appearing in South County cities, making it easier for criminals to retrieve the data and harder for police to catch the people who planted them.
“It’s like they’re installing a virus,” said Sgt. Scott Spalding of the Orange County Sheriff’s Department’s economic and computer crimes detail.
Last week, the Glendale Police Department announced the arrest of seven people accused of making “skimming” devices, copying the credit card information of victims and stealing hundreds of thousands of dollars. Officials said that investigation started after a car was found in San Clemente. Two men were sleeping in a SUV and deputies found dozens of copied credit cards.
The case underscores a few patterns that investigators have discovered, Spalding said. Identity theft rings long have targeted South County, planting skimmers inside gas pumps and using the stolen information outside the county.
South County is a frequent target because the criminals believe they are targeting people with higher incomes and because traffic drops off after 10 p.m., making it easier to pry open the pumps and slip in the skimmers.
“This is a sophisticated system,” Spalding said.
The SUV found in San Clemente more than two years ago is still providing investigators with leads, he said.
The skimming devices investigators used to find at gas stations and ATMs were clunky machines. Unsuspecting customers would insert their cards and the device would steal the data.
But the memory on those early skimmers was internal and had to be manually removed by the suspect to get the information. Most of the machines also made the gas pumps or ATMs inoperable, raising immediate suspicion.
About a year ago, investigators started finding newer, more-sophisticated units, Spalding said. They are much smaller and are attached to the wiring inside gas pumps – accessed quickly by nimble criminals who distract attendants.
Quantifying how costly skimming is nationwide is hard because not all of the devices are discovered by authorities and compromised accounts are often used in other geographic areas, authorities said.
When a victim reports fraud, Spalding said, sometimes they don’t realize the account was skimmed.
According to one financial-industry consulting firm, Javelin Strategy & Research, identity theft cost consumers, businesses and banks about $18 billion in 2011.
After installing the skimmer, gas pumps continue to function normally, and the purloined data is transmitted wirelessly, leaving little risk to nearby crooks and making the devices easy to leave behind.
“Once they have it, they don’t have to go back,” he said. “The new generation is so electronically savvy.”
The devices also don’t need an independent power source. They are like little parasites attached to a gas pump. The devices started appearing about a year ago, Spalding said, and were so small they often went unnoticed.
“Some of the people who worked at the gas station couldn’t even identify the skimmer until we identified where they were,” Spalding said.
What the criminal groups do with the information varies, Spalding said.
The cards are sometimes simply used to empty bank accounts through an ATM or used to make purchases at retail stores for items that can be returned for cash or gift cards. Sometimes the cards are sold in bulk to other criminals.
Glendale Police investigators allege the suspects taken into custody last week used the credit-card information to purchase fuel that was then resold to truckers.
GUNS AND $60,000 CASH
Glendale investigators searched nine locations in Glendale, San Fernando Valley and Los Angeles, where they said they found guns, credit cards, homemade skimmers and $60,000 in cash.
One of the men taken into custody in San Clemente was Levon Mkrtchian.
When deputies spotted the SUV in June 2011, they found a change of clothes and more than 80 unused copied credit cards with a magnetic strip in the back and four-digit pin numbers written on the front, Spalding said.
Several of those cards were wrapped with $20 bills.
The two men – including Mkrtchian – were arrested and quickly bailed out, Spalding said.
But investigators continued to probe.
They discovered compromised accounts from six different banks, he said. Some of those accounts had already been flagged by the banks after authorities in the Midwest uncovered a skimming at a retail clothing store.
It’s common for the rings to work in that way, Spalding said. The trail is more difficult to follow if the crimes are spread across far-flung jurisdictions.
Different members of the scheme also take on different responsibilities, with one planting the skimmers and obtaining the account information, another making copies of the credit cards and another accessing accounts.
Investigators were still looking at leads when Mkrtchian and David Yezgatyan were stopped in January in Glendale for a window-tinting violation.
Orange County investigators had put an alert on Mkrtchian, however, and Glendale Police discovered more re-encoded cards.
According to the Glendale Police Department, the men were using the cards to buy large amounts of gasoline, which was stored into large containers in altered trucks.
In a Glendale business, police found equipment to re-encode fake cards.
“It wasn’t a problem two years ago,” Spalding said. “Crooks get smarter and adapt, too.”
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