Seventeen individuals are facing federal fraud or related charges for their alleged roles in an international ATM skimming scheme that netted approximately $250,000 in fraud and money laundering proceeds.

Two defendants were arrested in Sofia, Bulgaria, and 13 defendants were arrested March 25 in the Chicago area, according to the U.S. Attorney's Office for the Northern District of Illinois. One of the defendants is a fugitive, and a warrant has been issued for his arrest. Another defendant is in state custody and will be arraigned on the federal charges on a date to be determined.

The scheme involved using ATM and debit card numbers fraudulently obtained in Europe, as well as the PINs associated with them, to withdraw money from victims' accounts using ATMs at various locations in the Chicago area, prosecutors say.

The indictment seeks forfeiture of approximately $200,000 from 15 defendants as alleged proceeds of the fraud, and it also seeks approximately $50,000 from three of the defendants as alleged proceeds of the money laundering.

"These charges are the result of the hard work of dedicated law enforcement personnel both here and abroad to address a transnational crime problem that can affect virtually everyone with a bank account and carries significant financial consequences," says Robert Holly, special agent in charge of the Chicago office of the Federal Bureau of Investigation. "Cooperation with international law enforcement agencies was crucial to the investigation, and we are grateful for the assistance that led to these arrests."

Analyzing the Scheme, Arrests

Shirley Inscoe, fraud analyst at Aite Group, says the dollar figures tied to this case are "unusually low" for such an operation. "It may be that these individuals were ancillary to another investigation, or these international cases may be given a higher priority to demonstrate that governments are serious about working together to shut down these organized criminal rings," she says.

In the past, she says, similar criminal rings operated with impunity. "It's great to see arrests."

The arrests also show the manner in which the FBI is building its relationships with international law enforcement, says Doug Johnson, vice president and senior advisor for risk management policy at the American Bankers Association. "Some of these folks were arrested overseas, some in the U.S.," Johnson says. "It shows a great degree of cooperation between our country and foreign countries in being able to accomplish this. It didn't just happen overnight."

John Buzzard, product manager at FICO Card Alert Service, says the case appears to involve a "family and friend" operation. "While multiple arrests aren't always possible for cases like this, I think the really interesting thing here is how compartmentalized this operation was into one beehive," he says. "It doesn't surprise me that the investigation netted a few people all at once."

Inscoe echoes Buzzard's insights. "The number of people arrested is not surprising at all," she says. "These are the low-level money mules, and it is typically much easier to identify and locate them than the kingpins behind the criminal activity," Inscoe says.

"The government is trying to make people think twice before getting involved in these criminal acts, but greed typically wins out when people make such poor moral decisions," Inscoe adds.

Johnson sees the number of arrests as unusual, but a welcome sign. "To the extent that we have the ability to arrest and indict a large number of individuals involved in the [criminal] chain, it's not just about the $200,000," he says. "It's about what else they can do; it's about future losses.

"This needs to be [continuous], the trend of arrests going forward, with lower amounts and more people. Obviously that would be a wonderful signaling to criminals."

Fraud Operation