Dave Rice 7:30 p.m., Jan. 26
Group caught after taking Citibank for over $1 million
Scam exploited bank's software glitch.
Local FBI officials, in cooperation with the U.S. Attorney, have indicted 14 individuals in San Diego in charges related to a scheme investigators have dubbed “Gone in 60 Seconds,” which allowed them to defraud Citibank of more than $1 million by exploiting a flaw in the bank’s software.
Ara Keshishyan, the alleged ringleader, recruited individuals willing to open multiple Citibank accounts across Southern California, including in San Diego County, with seed money he provided. He would then take the group to various casinos as close as Pechanga in Riverside, or as distant as Las Vegas or Laughlin, Nevada. Once there, they would commence a rapid series of cash-advance machine withdrawals of an equal amount, usually around the $9,000 mark in order to avoid federal reporting requirements associated with transactions exceeding $10,000.
As long as all of the withdrawals were made within one minute of the first, Citibank’s software assumed the transactions indicated erroneous duplicate processing of the first request, and no red flags would be raised until sometime after the scammers presented multiple withdrawal receipts to casino cash cages to claim their money.
Kesishyan then gave his associates a cut of the money and kept the remainder for himself. The culprits often didn’t make it far with their loot – much of the ill-gotten funds were quickly returned to the casinos as a result of the suspects’ affinity for gambling.
While the plot itself was rather sophisticated and allowed the group to collect in excess of $1 million over an eight-month period, a mundane flaw in the criminals’ logic eventually led the FBI to its suspects: they all used their real names when activating the bank accounts that ended up horrendously overdrawn.
Thirteen suspects, including Kesishyan, were arrested in the Los Angeles area over the weekend. Levon Karamyan, age 58, remains at large. All members of the group are charged with conspiring to commit bank fraud and conspiring to structure financial transactions to avoid federal reporting. Each charge carries up to a 5 year prison sentence. Kesishyan also faces 14 counts of bank fraud, each carrying up to a 30 year sentence.
More like this:
- Got a license for that financial transaction? — Oct. 17, 2014
- Collateral damage on and off Wall Street — June 23, 2014
- Ringleader of casino kiosk scam confesses — June 10, 2014
- Ex-La Mesa Gas Station Owner Who Hired 9/11 Hijacker Faces Fraud and Money Laundering Charges — May 16, 2012
- Spider in the Middle — May 15, 2003