(Houston) -- Four men have been arrested in a well-organized ring that drained bank accounts by attaching high-tech skimming devices to ATM machines all over the Houston area.
They even continued to drain people's bank accounts after the master-mind was arrested, according to federal agents.
The case has gotten almost no news coverage, but after KPRC Local 2 Investigates broke the story, more and more victims have stepped forward to say they found out their bank accounts were drained in the same fashion.
This ring seemed to prefer Chase Bank branches, and they'd attach devices usually late at night to "skim" the account data from unsuspecting customers' cards as they were inserted for transactions.
The banks included:
- 5505 Kirby (near Bissonett)
- 10301 S. Post Oak (Southwest side)
- 11555 Highway 6, Sugar Land (Far west side)
- 8575 W. Loop (Meyerland area)
- 8384 Westheimer (west side)
- Montrose & Richmond (Montrose/Museum District)
Agents said the 4 men would attach skimming devices that would lift customer data from the magnetic stripes on their debit cards. After the real customers would swipe their cards in the machines, agents said the thieves would collect the data and make their own withdrawals from the victims' accounts moments after they would leave.
"A lot of times, they're not visible," said Cindy Marble, the agent-in-charge of the Houston Secret Service. "They're getting so sophisticated that it's impossible to tell."
Skimming devices are easily available on the Internet, and while they used to be attached to the front of the ATM machines at the spot where cards are inserted, agents said newer skimmers can actually fit inside the slot where cards are inserted, making them entirely invisible to unsuspecting bank customers.
According to the arrest affidavit filed in federal court, these men would power up a laptop computer that would receive the skimmed data from the nearby ATM machine. They would sit in their car, close enough for the skimmer to transmit the account numbers directly into their laptop using a wireless connection.
They would also install a 'pinhole' camera, barely visible to unsuspecting customers.
That camera would also be accessed from the criminals' laptop, according to Secret Service agents.
Then, moments after the customer would drive away, the 4 men are accused of programming 'dummy cards' that would be used for withdrawals from the victims' bank accounts.
The dummy cards would have the victim's account number programmed into the magnetic stripe, and then the suspects would check their camera feed to capture the secret PIN code that was punched in by the victim.
The victims were now long gone from the bank, but their PIN code and their card numbers remained behind in the laptop of the four men who are now behind bars.
Federal felony charges of identity theft and debit card fraud have been filed against four men:
- Jason M. Lall, 36
- John D. Paz,
- John P. Griffin, 32
- Albert Richard.
All four men face 30 years in federal prison if they are found guilty.
In online security blogs, photos of skimming devices show they are getting smaller and smaller, like most techno-devices.
Instead of fitting over the top of the slots where customers swipe their cards, Agent Marble said the newer devices cannot be seen at all by would-be victims.
In court papers, Secret Service agents wrote that this group is responsible for $57,808 in losses for Chase bank in April alone.
One of the suspects told a confidential informant that $18,000 was "pulled" from victims' accounts in a single night, according to court records.
Agents said the men would spray paint over the security cameras installed in each of the ATM machines they chose in the scheme.
Court records showed more than 15 Houston victims swiped their actual cards to make withdrawals after the cameras had been obscured. The cameras remained obscured as the suspected thieves then withdrew additional money from their victims' accounts.
In their arrest warrant, agents wrote that Lall was the ringleader who was able to continue leading new rip-offs even after his arrest at a Montrose ATM in August 2009. He was arrested with a laptop full of Chase customers' information, and a pinhole camera receiver was feeding into his laptop. The devices are all available for purchase online.
From behind bars, agents wrote, Lall continued guiding the other men on how to manufacture the skimming devices and how to use them to drain accounts. The skimming devices were manufactured with a 3-D printer, but agents would not elaborate on how such a printer can create the latest breed of ATM machine skimmers.
One victim of this racket said he was banking near South Post Oak and Bellfort late at night, and he now realizes that likely played right into the criminals' hands. He said Secret Service agents told him the skimmers and cameras were usually only hooked up for a short while, so late night hours seemed to give the crooks their best opportunity.
He realized something was wrong when he was turned down for a transaction at his ATM. He rushed to another machine, and then a third machine, and then he realized his account was in trouble.
He said Chase did not call him to alert him to the fraud, but instead sent a notice in the mail. Given how fast today's crooks work, he felt bothered that the bank would not call him for something so important.
In a statement from Chase, a spokesman emailed the following:
"To help prevent this sort of crime, we ask customers who notice anything unusual or suspicious about an ATM machine to report it to the bank immediately. Chase takes these cases very seriously. Customers are not responsible for charges they did not make. If we confirm a transaction was not initiated by the customer, that customer has zero liability."
The victim who spoke to a reporter in this case said, indeed, that money was quickly returned to his account but others who have contacted the reporter since this story broke are having more trouble.
Another victim said he didn't get any notice from the bank, despite money being sucked from his account while another victim said it took weeks for the money to be returned to her account.
In this ring, agents wrote in their arrest warrant that Paz was the technical wizard behind the operation, using a storage unit on Wirt Road to reprogram dummy debit cards so that they could access the accounts of victims who had their data skimmed by devices that he manufactured.
Defense attorney JoAnne Musick is representing Paz and she emailed that, "My client appears to have gotten mixed up with the wrong people."
She said she could not comment further because she has not yet seen the evidence.
Lall's attorney, Dustan Neyland, emailed Local 2 Investigates that he is reviewing the facts of the case to determine how to defend his client against what he called "serious charges" against his client.
Houston's top Secret Service agent, Marble, said she checks her bank account online every single day to safeguard against this sort of fraud, and she suggests that other consumers do as well.
She said that, even for the trained eye, there is no way to spot this latest breed of skimming devices so frequently checking the bank account seems the only prudent option.
The 2009 cases against Griffin and Lall remain pending in Harris County state district court, where both men are set to face a judge in August on felony fraud charges.
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