Debit Card Crime Ring Busted
I have been tracking this story about debit card fraud since this type of crime is the ultimate end play in cyber-crimes- namely the use of stolen identities to obtain cash. There was a gang of men that were trafficking in stolen debit card information, and this gang was far-reaching- cash purchases were detected across the globe, and such activity can only be possible with the use of the Internet.
From CNET here, who has been tracking this story closely for quite a while. Great journalism there at CNET!
Prosecutor: Debit card crime ring busted
By Greg Sandoval
Staff Writer, CNET News.comLaw enforcement officials in New Jersey have arrested 14 people in connection with a crime spree that has forced banks across the nation to replace hundreds of thousands of debit cards.
The suspects, all U.S. citizens, are accused of using stolen credit and debit card information to produce counterfeit cards that were used to make fraudulent purchases and withdrawals from card-holder accounts, Hudson County Prosecutor Edward DeFazio said. Most of the arrests were made during the past two weeks.
Some of the stolen credit card information came from the office-supply chain OfficeMax as well as North Carolina’s State Employees’ Credit Union and other businesses, DeFazio told CNET News.com on Monday. “We had cooperation from the security people from many victimized businesses,” he said.
“This is the worst hack to date,” Litan said. “All the other hacks were trying to get to this hack. All the previous hacks were leading up to finding a way into your bank account. For the criminal, this is the pot of gold.”
Turning credit cards into cash is time consuming and costly for crooks, Litan said. With stolen credit-card data, thieves are forced to first buy goods and then fence the merchandise in order to generate cash.
“With this kind of debit-card fraud, they can go straight to the cash,” Litan said.
An informant tipped off the Hudson County Sheriff’s Department to the 14 who were arrested, DeFazio said, adding that the group has ties to criminal gangs residing overseas. Victims in the United States have reported discovering unauthorized charges or withdrawals in such places as Great Britain, Pakistan, Romania and Spain.
Hudson County sheriff’s deputies launched their six-month investigation last June. Working with the New York City Police Department, sheriff’s deputies began making arrests in December after finding the machinery allegedly used to create fake cards in a Manhattan commercial district.
Although the story doesn’t go into details, I gather that the hacker team was able to infiltrate the debit card reading infrastructure to the point where they were able to issue their own debit cards with forged pins that matched the debit cards of real account holders. Essentially, they cracked the Pin Codes.
