I wouldn't be able to sneak into a movie without getting caught.
Maybe we should hire teenagers to guard our borders.
Posted on 08/03/2003 11:17:37 AM PDT by Destro
Posted on Sun, Aug. 03, 2003
Nation's biggest ATM fraud exposes system's vulnerability
By WALT BOGDANICH
The New York Times
NEW YORK - He fenced stolen jewels, committed bank and credit-card fraud, and had been accused of having links to an Albanian-Yugoslavian criminal gang.
Cloaking himself in nine aliases and Armani jackets, he was a smooth, multilingual master of the con, say investigators and persons who knew him.
By all accounts, Iljmija Frljuckic had no business being around anybody else's money.
Nevertheless, after being deported in the late 1990s, he slipped back into the United States and set up shop as a banker -- not in a marble lobby under the watchful eyes of auditors and regulators, but in the almost unregulated world of privately owned automated-teller machines.
To tap into this electronic network, Frljuckic did not have to produce so much as a valid driver's license. After buying the machines -- the kind found in convenience stores, delicatessens and other retail outlets -- he and his associates installed devices that captured personal bank account information from at least 21,000 people, prosecutors said.
The alleged con men used that information in 2001 and early 2002 to make fake ATM cards and then stole at least $3.5 million, mostly from ATMs in New York City, according to the latest federal charges. They were filed in late May in Manhattan.
Before Frljuckic came along, small-time crooks had made crude forays into ATM fraud. But in its size and technical sophistication, investigators say, the Frljuckic case is a con of an entirely different order.
It is, they say, a new turn on identity theft, a jolting warning of the vulnerability of an ATM system that has exploded in size in the last few years.
No one can say precisely how much is lost through ATM-related crimes. In fact, no government agency knows how many cash machines are operating, where they all are, or who owns them.
Banks are reluctant to discuss their losses, but they say there is no cause for alarm.
Still, from Canada to Malaysia to the United Arab Emirates, investigators report new assaults on ATMs.
The criminals, foreign and homegrown, include gangs, embezzlers and, on occasion, money launderers, according to investigators and public records. And although ATM industry officials say the Frljuckic case shocked them into tougher self-policing of privately owned machines, they also confess that the thieves are remarkably resourceful, shifting their attention now to bank-owned machines.
In recent months, skimming devices have been found attached to bank machines around Boston and Chicago.
"ATMs have been viewed as a weak point in the banking chain -- and so the criminals have focused on that," said Tom Harper, president of the ATM Industry Association, the leading trade group.
Banks are supposed to reimburse victims of ATM theft. But unlike credit card fraud, in which banks are stuck with bills for unauthorized purchases, ATM thefts take cash from consumers, who may bear the burden of proving that withdrawals were unauthorized.
Banks are not eager to publicize breaches of ATM security.
"They don't want to give people ideas," said Nessa Feddis, a lawyer with the American Bankers Association.
Another reason, some financial experts say, is that banks do not want to undermine confidence in a system that cuts their overhead while making them billions in fees, collected when their customers use private ATMs or machines owned by other banks. Several large banks also own parts of a network that connects the machines and financial institutions.
"These fees are cash cows for the banks," said Edmund Mierzwinski of the U.S. Public Interest Research Group in Washington.
Accounts vulnerable
The nation's biggest ATM fraud began in late 2000 with trial runs in California, Florida and New York. At 13 sites, thieves started installing machines rigged internally to capture bank data and personal identification numbers.
They were in no hurry. The longer they waited, the more account numbers they could steal. In four months, with just the dozen or so machines, they had the electronic keys to 4,000 accounts, fraud investigators say.
Only when the gang began siphoning money did banks and customers realize they had been scammed. By the time the rigged machines had been identified, they had vanished, along with their owners and tens of thousands of dollars.
By the end of June 2001, banks had identified the compromised cards and electronically blocked them.
"They covered their tracks throughout the process," said Michael Urban, who works for a division of Fair Isaac, a company that helps financial institutions detect electronic fraud. "We didn't know anything other than they had good PINs, good cards."
Investigators say the machines were bought in the names Michael Dokovich and Michael Bugatti, who turned out to be the same man: Iljmija Frljuckic.
He is thought to have first entered the country in 1981. By the early 1990s, federal authorities had linked him to "an Albanian-Yugoslavian organized crime gang."
The government wrote in court papers that the group "is believed responsible for a host of serious crimes, including arson, insurance fraud, bank fraud, large-scale mail theft, drug-trafficking and sophisticated jewelry heists."
Frljuckic married the daughter of a Florida law enforcement official in January 1994, telling her he was Michael Illyriani, an international businessman, court records show.
He did not say he was facing federal bank fraud charges, filed in 1992, and was out of jail only because, hoping for a plea bargain, he had agreed to inform against the Albanian gang.
Actually, officials say, he was conning the government, too. While he helped on a few minor investigations, prosecutors say, he provided "absolutely no assistance" in exposing the gang. Then, before the first case was settled, he was arrested in a new bank fraud.
After his release from federal prison in June 1996, a judge ordered him deported to Yugoslavia. But he soon returned to the United States, and by then the ATM system had opened its doors to private entrepreneurs.
Unwitting accomplice
The system that beckoned Frljuckic runs on the ever-accruing stream of money from the surcharges first widely permitted in 1996.
Today, many customers pay twice -- usually to the owner of the machine and to the bank that issued the card. ATM fees now add up to $4.5 billion annually, according to Dove Consulting, a Boston-based firm.
An ATM entrepreneur needs a machine and cash, which can be borrowed, to stock it, and a bank account, so that when a cardholder withdraws money, the cardholder's bank has some place to send the reimbursement. What the owner does not need is a license or government approval.
The system, if not properly supervised, can be used to launder money. An owner can stock a machine with the proceeds from crime and then, after withdrawals, be reimbursed from customers' banks with "clean" currency.
Nasser Alomari is typical of the small New York store owners who became unwitting accomplices in Frljuckic's widening fraud, investigators say.
Alomari, a Yemeni immigrant, had originally owned an ATM in his Manhattan delicatessen. A private company serviced the machine, paying him $1 for each withdrawal. In a good month, that meant $600.
Until one day in January 2002, that seemed enough. Then a stranger offered him a better return: $1.75. The man insisted on installing his own ATM. Investigators say it had been fitted with a skimming device.
Federal records show that the man Alomari dealt with used an alias, as he had in buying 21 other machines. Investigators allege that he was Hamdija Frljuckic, brother of Iljmija Frljuckic.
Hamdija Frljuckic began buying machines in August 2001 from a New Jersey independent service organization called Money Marketing.
By early November 2001, investigators say, the thieves had collected account information from about 17,000 New Yorkers. The trap was set.
The first sign that something had gone seriously wrong came over that Veterans Day weekend.
Just as bank customers began to miss money in their accounts, unusual withdrawal patterns were being detected by computer analysts in the Arlington, Va., office of Fair Isaac. The analysts noticed something else: The patterns echoed those observed that year in California and Florida.
Agents began staking out the sites of suspicious withdrawals. On the evening of Nov. 15, Citibank told an agent, "approximately $7,000 had just been withdrawn from different accounts in rapid and successive transactions from the same ATM," according to a Secret Service affidavit.
After a brief chase, agents arrested a man seen leaving the bank. He was Fikret Korac. In his possession, agents found 11 white plastic cards with magnetic strips and about $30,000.
Investigators viewed Korac as a low-level "runner." But after his arrest, prosecutors say, he called Hamdija Frljuckic, who quickly tried to withdraw $150,000 in cash from an account in a false name at J.P. Morgan Chase. A suspicious bank officer refused, according to the Secret Service.
Within weeks, Hamdija Frljuckic was arrested -- after visiting the machine at Nasser Alomari's store. He is awaiting trial on charges relating to the ATM thefts. Iljmija Frljuckic remained at large Saturday.
In all, investigators say, the thieves withdrew money from 500 machines around New York City. The hardest-hit bank was Citibank, which lost about $1 million, persons close to the investigation said.
After his release from federal prison in June 1996, a judge ordered him deported to Yugoslavia. But he soon returned to the United States
You see, Clinton needed Albanian Jihadis to defeat Milosevic so his administration let in God knows how many of them into this country in the late 90s. In fact it is my understanding that is when and how the 9/11 terrorist cells were able to get inside the USA. That is the real blanked out secret to how 9/11 was able to go down but it compromises lots of people so it can't be exposed outright. Go to Yonkers, New York. You will even see a memorial to Albanian Jihadists killed by the Serbs that set up by Clinton administration officials.
What did Clinton know and when did he know it?
Huh?
...is charging me a fee for making cash withdrawals. After all, I have saved them the cost of a building and the salaried employe....
I feel so used.
Sneaked??? Maybe they were let into the back door?
From my post:
Were they able to hoodwink the US agencies by projecting themselves as continuing allies of the US in its campaign against Saddam Hussein in Iraq and Slobodan Milosevic in Bosnia?
Did the HUM's role, found useful by the US, in training the jihadi opponents of Milosevic in Bosnia and Kosovo and participating in their jihad make the US agencies close their eyes to its burrowing into US homeland in preparation for taking the jihad to the US homeland?
This should be interesting.
While you are not alone in your views, Destro, being a passenger or the helmsman on a ship of fools is no cause for pride.
I know that the UN Yugoslav war crimes trail had a case file on one of the 9/11 terrorists which is classified and not released...who was it??? I took a guess. Was it really Atta?????? Why won't this file be released, Hoplite?
Bosnian Muslim Connection to 9/11 Confirmed! UN's Yugo Prosecutor Turns Over Bosnian Hijacker Info
The ATMs also print out the full VISA/MasterCard number, and the expiration date, making it trivial to commit credit card fraud.
Unlike you, Destro, I am unwilling to present my hypotheses as facts and then rely upon the lack of information surrounding the issues to prevent the disproving of my claims.
When the facts do become clear, as in the case of Ahmed Zuhar, you quickly move onto other threads and repeat your pattern of lying and spreading disinformation, as if your most recent embarrassment had never happened.
In essence, you're attempting to put the roof on a structure who's foundations collapsed as soon as you laid them.
I wouldn't be able to sneak into a movie without getting caught.
Maybe we should hire teenagers to guard our borders.
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