Could the arrests in the Stop and Shop data breach indicate a tie to Armenian Mobsters?

( Photo courtesy of Stop & Shop and the Rhode Island Police)

Stop & Shop has recently been in the news because of a data breach, involving compromised debit and credit card information. The data breach was traced to PIN pads that had been mysteriously replaced.

To read my original post on the Stop & Shop data-breach, link here.

Monday night, Stop & Shop employees spotted four individuals attempting to remove PIN pads at one of their stores. Police were notified, store video was shared with them, and four arrests were eventually made.

After the disclosure, Stop & Shop bolted down the PIN pads at all their stores. Some believe this helped slow the crooks down long enough to be noticed.

Despite this, some alert employees certainly deserve some recognition.

The Rhode Island police published some of the video stills of the suspects in action, here.

Ray Henry of the AP is reporting:

The men were arrested Monday night while attempting to switch keypads at a store in Coventry, police said. A store security officer called police after employees noticed one suspect trying to remove a keypad while two others were seeking to distract workers.

Arutyun Shatarevyan, 20, Mikael Stepanian, 28, Gevork Baltadjian, 20, and Arman Ter-Esayan, 22, were arrested and charged with conspiracy, computer theft and fraud. They were scheduled to be arraigned Tuesday afternoon in Kent County District Court.

Data breaches have become a huge issue, with new reports surfacing (it seems) every week. Over 100 million Americans have had their information compromised since 2005, according to the Privacy Rights Clearinghouse, which has maintained a chronology of these occurrences.

AP story, here.

Interestingly enough, the arrested individuals are from California. Judging by their surnames, they are of Armenian descent. This brings to mind a previous breach, where two fraudsters were charged after a data breach at Dollar Tree - they were also from California and have Armenian surnames.

Parkev Krmoian was arrested in the Dollar Tree episode and (at the time), a picture of his friend was being circulated (who was still at large), here.

Armenian organized crime is a big problem in Glendale (where Krimoian was from), and they are known to be involved in "lucrative white collar crimes," such as credit-card fraud. Glendale and Hollywood in Southern California has the largest Armenian population outside of Armenia.

If you are interested in learning more about Armenian organized crime, ARMENIANDIASPORA.com has a nice little write-up, here.

Placing skimming devices in public places is a growing phenomenon, Tom Fragala (MyTruston) did a great post on this (with video), here.

The video is pretty amazing!

Are Street Gangs using Check Fraud to Fund Themselves?

We keep hearing how white collar crime is becoming more organized. A recent story in Arizona shows how traditional gangsters are getting involved in white collar crime.

In 2006, Postal Investigators investigating checks being stolen from the mail tied the activity into one of the more violent street gangs operating in the Hermosa Park area of Phoenix. This led to one of the biggest street gang cases of the year.

Yesterday, Phoenix police and FBI agents began serving warrants on the gangsters involved in this activity. 102 were indicted in this operation. By the end of the day, they had 38 of them in custody. The arrests are being hailed as crippling the gang in the Hermosa Park area.

Of course, this doesn't mean that this gang wasn't involved in more traditional activity. Also confiscated in the arrests were "24 weapons, 18 cars and trucks, 43 pounds of marijuana and cocaine and Ecstasy," according to the story in the azcentral.com about this. In another story on this by ABC15.com, officials commented that several of the people arrested were connected to violent crimes in the area.

According to the authorities involved in this investigation, this gang is suspected of stealing more than $2 million dollars using stolen and counterfeit checks in the past couple of years.

Often legitimate checks stolen from the mail and other sources are counterfeited. Since the checks are copies of legitimate items, they often pass initial scrutiny at a financial institution.

In recent years, check fraud has exploded. Last year, an International task force monitored the mail in several countries and confiscated checks being produced overseas and mailed to several countries. Additionally, a wide array of check producing software and even the paper with anti-fraud security features can be bought in Office Supply stores and even on the Internet.

Another phenomenon that fuels check and many other types of fraud is the easy availability of counterfeit identification. The distribution and sale of counterfeit documents is also controlled by organized crime. I've written about this frequently and have spoken to Suad Leija and her husband, who have gone to considerable effort to educate the public (and the authorities) about how widespread and organized this activity is.

Suad's website, Paper Weapons has a lot of information on this subject.

Organized check fraud activity has been around for a few years. In 1996, Special Agent Keith Slotter of the FBI wrote a very telling paper on this subject. "The principal ethnic enterprises involved in illegal check fraud schemes include Nigerian, Asian (particularly Vietnamese), Russian, Armenian, and Mexican groups. The majority of the Vietnamese, Armenian, and Mexican organizations base their operations in California, especially in the Orange County, San Francisco, and Sacramento areas," according to the paper.

While the arrests in Phoenix represent a small part of the overall problem with check fraud -- it does point to the fact that organized criminals see check fraud as a lucrative income stream.

San Diego Regional Fraud Task Force releases photos of suspected ATM skimmers

Devices to skim payment card information have become a big problem, whether they are portable devices used by dishonest employees at restaurants, PIN pads replaced at merchants, or devices mounted on ATM machines.

Many of the devices used recently -- use wireless technology -- and the card details are transmitted to fraudsters, normally sitting in a vehicle with a laptop.

The San Diego Regional Fraud Task Force is hot on the trail of two suspects, photographed using some of the cloned cards. Cloned cards are counterfeit devices made with the information skimmed from legitimate (credit/debit) payment cards.

Unfortunately, most of the equipment to do this, can be purchased, legally. Some of this equipment is even being sold over the Internet. Loose controls on the sale of this technology -- enables a lot of criminal activity, makes it harder for law enforcement to investigate -- and a lot of people are being victimized by it.


SignOnSanDiego.com reports:

Police are warning ATM users that scammers are using high-tech devices to steal their bank account information, including debit and credit cards numbers and personal identification codes.

Police have released photos taken from surveillance video of two suspects. Anyone with information about either man is asked to call the task force at (619) 744-2534 or the U.S. Secret Service at (619) 557-5640.

The pictures of the current people of interest in this case are featured above (to the left).

I did a post with some interesting pictures of an ATM skimming device, which are pretty educational, can be seen, here.

For other articles about payment card skimming, click here.

SignOnSanDiego.com story, here.

A lot of the skimming in the United States seems to be tied into Armenian organized crime. Glendale, which is a couple of hours North of San Diego, seems to be where a lot of this activity originates.

Maybe someone should post these pictures in the Glendale area?



Skimming device discovered at a gas (petrol) station in the United Kingdom (Courtesy of Flickr). The expression on the employee's face is worth a thousand words.