by Associated Press
NEW YORK — A worldwide gang of criminals stole a total of $45 million in a matter of hours by hacking their way into a database of prepaid debit cards and then draining cash machines around the globe, federal prosecutors said Thursday — and outmoded U.S. card technology may be partly to blame.
Seven people are under arrest in the U.S. in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks. The fraudsters moved with astounding speed to loot financial institutions around the world, working in cells including one in New York, Brooklyn U.S. Attorney Loretta Lynch said.
She called it "a massive 21st-century bank heist" carried out by brazen thieves.
One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of bills as they made their way up and down Manhattan.
Here's how it worked:
Hackers got into bank databases, eliminated withdrawal limits on pre-paid debit cards and created access codes. Others loaded that data onto any plastic card with a magnetic stripe — an old hotel key card or an expired credit card worked fine as long as it carried the account data and correct access codes.
A network of operatives then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it wholesale to the global ringleaders. Lynch didn't say where they were located.
It appears no individuals lost money. The thieves plundered funds held by the banks that back up prepaid credit cards, not individual or business accounts, Lynch said.
She called it a "virtual criminal flash mob," and a security analyst said it was the biggest ATM fraud case she had heard of.
There were two separate attacks, one in December that reaped $5 million worldwide and one in February that snared about $40 million in 10 hours with about 36,000 transactions. The scheme involved attacks on two banks, Rakbank in the United Arab Emirates and the Bank of Muscat in Oman, prosecutors said.
The plundered ATMs were in Japan, Russia, Romania, Egypt, Colombia, Britain, Sri Lanka, Canada and several other countries, and law enforcement agencies from more than a dozen nations were involved in the investigation, U.S. prosecutors said.
The accused ringleader in the U.S. cell, Alberto Yusi Lajud-Pena, was reportedly killed in the Dominican Republic late last month, prosecutors said. More investigations continue and other arrests have been made in other countries, but prosecutors did not have details.
An indictment unsealed Thursday accused Lajud-Pena and the other seven New York suspects of withdrawing $2.8 million in cash from hacked accounts in less than a day.
Such ATM fraud schemes are not uncommon, but the $45 million stolen in this one was at least double the amount involved in previously known cases, said Avivah Litan, an analyst who covers security issues for Gartner Inc.
Middle Eastern banks and payment processors are "a bit behind" on security and screening technologies that are supposed to prevent this kind of fraud, but it happens around the world, she said.
"It's a really easy way to turn digits into cash," Litan said.
Some of the fault lies with the ubiquitous magnetic strips on the back of the cards. The rest of the world has largely abandoned cards with magnetic strips in favor of ones with built-in chips that are nearly impossible to copy. But because U.S. banks and merchants have stuck to cards with magnetic strips, they are still accepted around the world.
Lynch would not say who masterminded the attacks globally, who the hackers are or where they were located, citing an ongoing investigation.
The New York suspects were U.S. citizens originally from the Dominican Republic, lived in the New York City suburb orf Yonkers and were mostly in their 20s. Lynch said they all knew one another and were recruited together, as were cells in other countries. They were charged with conspiracy and money laundering. If convicted, they face 10 years in prison.
Arrests began in March.
Lajud-Pena was found dead with a suitcase full of about $100,000 in cash, and the investigation into his death is continuing separately. Dominican officials said they arrested a man in the killing who said it was a botched robbery, and two other suspects were on the lam.
The first federal study of ATM fraud was 30 years ago, when the use of computers in the financial community was growing rapidly. At the time, the Bureau of Justice Statistics found nationwide ATM bank loss from fraud ranged from $70 and $100 million a year.
By 2008, that had risen to about $1 billion a year, said Ken Pickering, who works in security intelligence at CORE Security, a white-hat hacking firm that offers security to businesses.
He said he expects news of the latest ring to inspire other criminals.
"Once you see a large attack like this, that they made off with $45 million, that's going to wake up the cybercrime community," he said.
"Ripping off cash, you don't get that back," he said. "There are suitcases full of cash floating around now, and that's just gone."
AP Technology Writer Peter Svensson in New York, AP National Writer Martha Mendoza in San Jose, Calif., and Associated Press writer Ezequiel AbiÃº LÃ³pez in Santo Domingo, Dominican Republic, contributed to this report.
—Copyright 2013 Associated Press
By Scott Wilson and Zachary A. Goldfarb
President Obama said Tuesday he will revive his push to close the U.S. military prison at Guantanamo Bay, Cuba, a first-term campaign promise that a Democratic-led Congress rejected as impractical and potentially unsafe.
With a majority of Guantanamo’s 166 detainees on a mass hunger strike, Obama said at a White House news conference that the existence of the facility damages the country’s image abroad, costs too much money and undermines U.S. counterterrorism efforts by serving as a recruiting tool for militants.
“I’m going to go back at this,” he said. “I’m going to reengage with Congress to try to make the case that this is not something that’s in the best interests of the American people.”
Obama’s appearance before the media Tuesday highlighted how much his second and final term remains consumed by the unfinished business of his first.
From his policy toward Syria to health-care legislation to his inability to close the prison at Guantanamo Bay, Obama faced many of the same questions that have defined much of his time in office.
He used long, sometimes defensive answers to portray himself as undaunted by the unresolved challenges, yet also limited in his ability to secure the changes he has sought because of his continuing confrontation with a divided Congress.
That self-assessment of his political power also is largely consistent with his message to the nation since Democrats lost control of the House in 2010. His domestic agenda has largely ground to a halt since then.
Now his window for progress in Congress is even smaller than it once was, and may close entirely after the 2014 midtermsunless his party can take control of both chambers.
It was unclear Tuesday how he intends to revive his political prospects after setbacks on gun control and fiscal negotiations to avoid across-the-board spending cuts — known as sequestration — that he acknowledged are undermining the economy.
“Rumors of my demise may be a little exaggerated at this point,” Obama said during the news conference, in a phrase reminiscent of Bill Clinton’s 1995 assertion of his own relevance after his party lost the House the previous year.
But in responding to a journalist’s assertion that he appears powerless in dealing with Congress, Obama responded, “You seem to suggest that somehow, these folks over there have no responsibilities and that my job is to somehow get them to behave.”
“That’s their job,” he said.
The news conference fell on the 100th day of what for Obama has already been a difficult second term. Just this month, he lost his high-profile bid for stricter gun control following the December shootings in Newtown, Conn., that killed 20 children and six educators.
Days after that Senate defeat, the first large-scale bombing in the post-Sept. 11, 2001 era killed three and wounded more than 250 others near the finish line of the Boston Marathon.
Last week, his administration also informed Congress that it has “varying degrees of confidence” in evidence suggesting that chemical weapons have been used in Syria’s civil war, which has killed more than 70,000 people.
One issue that is making progress in Congress, largely without Obama’s direct help, is immigration legislation that many Republicans back as a way to bolster support among Hispanic voters.
The president said that passing an immigration overhaul would be a “historic achievement.” He also expressed optimism that a series of recent meetings with Republican senators could lead to a budget agreement.
“There’s a genuine desire on many of their parts to move past not only sequester but Washington dysfunction,” Obama said.
Even his health-care law — the signature legislation of his presidency — remains a work in progress. Obama defended the complicated implementation process that will extend health care to the estimated 15 percent of the population that does not have it.
In assuring the public that the process is not nearly as messy as some members of Congress have portrayed it, Obama said anyone who has health insurance will probably see no further changes as the law takes full effect. He also warned of challenges ahead.
“Even if we do everything perfectly, there will still be glitches and bumps,” Obama said.
His pledge for a renewed effort to close the prison at Guantanamo Bay comes as the hunger strike by detainees has highlighted the legal ambiguities surrounding their detention. Obama has been working to shutter the prison since the day after he took office in 2009; on Tuesday he again cited Congress as the chief obstacle.
Of the 166 detainees held at Guantanamo Bay, 100 are on a hunger strike, with 21 being force-fed, according to Lt. Col. Samuel House, a spokesman for Joint Task Force Guantanamo. House said five of the hunger-striking detainees are being treated in a hospital at the base, but none has a life-threatening condition.
The Navy also sent 40 additional medical personnel to Guantanamo Bay over the weekend in response to the increasing numbers of detainees on hunger strike. The military said the move was planned several weeks ago.
Defending the move, Obama said Tuesday, “I don’t want these individuals to die.”
According to lawyers for the detainees, the initial catalyst for the three-month-old hunger strike was newly aggressive searches by guards that involved the manhandling of the Koran.
The military said all searches of Korans were conducted by Muslim cultural advisers, not by the guard force. They noted that in the past detainees have used their Korans to hide contraband.
The hunger strike has since become a wider protest against what the detainees viewed as the administration’s abandonment of its effort to close the facility, according to both the military and detainees’ lawyers.
About 86 detainees at Guantanamo have been cleared for transfer home or resettlement in a third country by a Justice Department-led interagency task force. But the transfer process ground to a halt after Congress imposed restrictions on moving detainees.
Human rights groups praised Obama’s decision to resurrect efforts to close the military detention facility, but said he already has the power to act despite congressional restrictions.
“President Obama is right to recommit to closing Guantanamo. But it’s time to do more than talk,” said Zeke Johnson, director of Amnesty International USA’s Security With Human Rights Campaign, in a statement.
Peter Finn contributed to this report.
By BDC News
Police spokesman Lars Bystrom said, "a small amount of drugs and a stun gun were found when officers raided the empty bus parked under the Globen concert venue in Stockholm," where the singer was performing on Wednesday.
He declined to identify the drug, saying it had been "sent to a laboratory for an analysis".
No-one has been arrested.
Police acted after smelling marijuana coming from inside the bus when it was parked outside the hotel where the singer was staying.
The drug squad was alerted and searched the bus after it carried a group of people to the concert venue.
Police say there are no suspects, and won't be taking the matter any further.
Bieber is in Stockholm on the European leg of his Believe world tour.
When he was in London in March the Canadian singer caused controversy when he was late on stage for a concert at the 02 arena.
A few days later he made headlines again when he confronted photographers outside his central London hotel.
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