Bloodless bank heist for $45 million impresses even cybercrime experts

Seven people were arrested in the U.S., accused of operating the New York cell of what prosecutors said was a network that carried out thefts at ATMs in 27 countries from Canada to Russia.
By COLLEEN LONG and MARTHA MENDOZA Published: May 11, 2013
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— A bloodless bank heist that netted more than $45 million has left even cybercrime experts impressed by the technical sophistication, if not the virtue, of the con artists who pulled off a remarkable, internationally organized attack.

“It was pretty ingenious,” Pace University computer science professor Darren Hayes said Friday.

Seven people were arrested in the U.S., accused of operating the New York cell of what prosecutors said was a network that carried out thefts at ATMs in 27 countries from Canada to Russia. Law enforcement agencies from more than a dozen nations were involved in the investigation.

Here's how it worked:

First, the hackers broke into computer records at a few credit card processing companies. This has happened before but here's what was new: They didn't just take information. They actually raised the limit on prepaid debit cards kept in reserves at two large banks.

Crime ring members in 27 countries then ran used plastic cards, just about anything with a standard magnetic strip, through handheld magnetic stripe encoders, widely available online for less than $300. Those devices allow users to change information on magnetic stripes.

In this case, the stripes were rewritten with information from the hackers. That allowed the thieves to turn the cards into prepaid debit cards with unlimited amounts of money stored on them.

On two pre-arranged days — once in December and again in February — criminals with the debit cards and PIN numbers raced from one ATM to the next, often taking out the maximum the cash machine would allow in a single transaction: $800.