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Originally published May 9, 2013 at 9:17 PM | Page modified May 10, 2013 at 10:42 AM

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‘Criminal flash mob’ drains $45M from world’s ATMs in mere hours

A worldwide gang of criminals stole a total of $45 million in a matter of hours by hacking their way into a database of debit cards and then draining cash machines around the globe.

The Associated Press

How they did it

Phase 1: Card-processor network intrusion. Using malware, hackers breached the worldwide processors for Rakbank in the United Arab Emirates and the Bank of Muscat in Oman.

Phase 2: The criminals override security protocols, hunt for the prepaid debit-card systems and delete limits on the accounts. It takes months to penetrate the systems, federal officials say.

Phase 3: Access codes are created. Data are loaded onto any plastic card with a magnetic stripe — even old hotel key cards.

Phase 4: Cells of “cashing crews” around the globe fan out and begin to make repeated cash-machine withdrawals.

Phase 5: Hackers maintain unauthorized access to the banks to monitor the cashout, keeping withdrawals rolling until the breach is discovered and the systems shut down.

Phase 6: Cash is laundered and organizers are paid.

U.S. Attorney’s Office, Eastern District, Brooklyn

Graphic: Defendant Reyes' ATM transactions

This graphic shows 10 ATM photos of a man identified as "defendant Reyes." Black dots on the map of Manhattan chronicle a journey down the Upper West Side and up the Upper East Side.

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NEW YORK — A worldwide gang of criminals stole a total of $45 million in a matter of hours by hacking their way into a database of prepaid debit cards and then draining cash machines around the globe, federal prosecutors said Thursday — and outmoded U.S. card technology may be partly to blame.

Seven people are under arrest in the U.S. in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks.

The fraudsters moved with astounding speed to loot financial institutions around the world, working in cells including one in New York, Brooklyn U.S. Attorney Loretta Lynch said.

She called it “a massive 21st-century bank heist” carried out by brazen thieves.

One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of bills as they made their way up and down Manhattan.

Here’s how it worked:

Hackers got into bank databases, eliminated withdrawal limits on prepaid-debit cards and created access codes. Others loaded that data onto any plastic card with a magnetic stripe — an old hotel key card or an expired credit card worked fine as long as it carried the account data and correct access codes.

A network of operatives dubbed “cashing crews” then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it wholesale to the global ringleaders.

It appears no individuals lost money. The thieves plundered funds held by the banks that back up prepaid credit cards, not individual or business accounts, Lynch said.

She called it a “virtual criminal flash mob,” and a security analyst said it was the biggest ATM fraud case she had heard of.

There were two separate attacks, one in December that reaped $5 million worldwide and one in February that snared about $40 million in 10 hours with about 36,000 transactions. The scheme involved attacks on two banks, Rakbank in the United Arab Emirates and the Bank of Muscat in Oman, prosecutors said.

The plundered ATMs were in Japan, Russia, Romania, Egypt, Colombia, Britain, Sri Lanka, Canada and several other countries, and law-enforcement agencies from more than a dozen nations were involved in the investigation, U.S. prosecutors said.

The accused ringleader in the U.S. cell, Alberto Yusi Lajud-Pena, was reportedly killed in the Dominican Republic late last month, prosecutors said. More investigations continue and other arrests have been made in other countries, but prosecutors did not have details.

An indictment unsealed Thursday accused Lajud-Pena and the other seven New York suspects of withdrawing $2.8 million in cash from hacked accounts in less than a day.

Such ATM-fraud schemes are not uncommon, but the $45 million stolen in this one was at least double the amount involved in previously known cases, said Avivah Litan, an analyst who covers security issues.

Middle Eastern banks and payment processors are “a bit behind” on security and screening technologies that are supposed to prevent this kind of fraud, but it happens around the world, she said.

Some of the fault lies with the ubiquitous magnetic strips on the back of the cards. The rest of the world has largely abandoned cards with magnetic strips in favor of ones with built-in chips that are nearly impossible to copy. But because U.S. banks and merchants have stuck to cards with magnetic strips, they are still accepted around the world.

Lynch would not say who masterminded the attacks globally, who the hackers are or where they were located, citing an ongoing investigation.

The New York suspects were U.S. citizens originally from the Dominican Republic, lived in Yonkers and were mostly in their 20s. Lynch said they all knew one another and were recruited together, as were cells in other countries. They were charged with conspiracy and money laundering. If convicted, they face 10 years in prison.

Arrests began in March.

Lajud-Pena was found dead with a suitcase full of about $100,000 in cash, and the investigation into his death is continuing separately. Dominican officials said they arrested a man in the killing who said it was a botched robbery, and two other suspects were on the lam.

Associated Press Technology Writer Peter Svensson in New York, Associated Press National Writer Martha Mendoza in San Jose, Calif., and Associated Press writer Ezequiel Abiú López in Santo Domingo, Dominican Republic, contributed to this report.

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