Thieves Hit Costly Jackpot in ATM Spree : Crime: Three suspects are arrested in connection with the biggest bank machine fraud case in U.S. history. Culprits made 724 withdrawals in 54 hours.

Karen Smith didn’t notice her bank card was missing until her credit union telephoned to tell her that her account was more than $346,000 overdrawn.

Two men and a woman now face charges they used the card to make 724 withdrawals over 54 hours in what authorities say was one of the largest automated teller fraud cases in U.S. history. A fourth person is being sought.

For the thieves, it was like hitting the jackpot on a slot machine--over and over and over.

They cruised from one automated teller machine to another in a maroon, gold-trimmed Cadillac, spending hours at a time withdrawing money, police said.

“They did it just as fast as you could punch in the card, punch in the number and pull out the card, time and time again, many, many consecutive withdrawals,” Gresham, Ore., Police Detective Jim Muzyn said. “From time to time, they were considerate enough to let a real customer in.”

To safeguard against this sort of thing, the machines are supposed to give no more than $200 per day on any single card. But because of a computer software change at Oregon TelCo Credit Union, the limit wasn’t in effect that weekend.

By the time they finished, they had withdrawn $346,770 from 48 bank machines.

“They drained a couple of them dry,” Secret Service Agent James Cline said.

When the account became empty it was no problem. They used empty envelopes to make five phony deposits totaling $820,500.

“Many banks will believe the card user and trust their customers,” Muzyn said. “If you’re putting in some money, it will post it immediately.”

It began on a Friday night, Nov. 18, when Smith left her van locked in a parking lot while she attended a high school football game in Gresham, a Portland suburb.

Someone broke into the van, went through Smith’s purse and stole the bank card. She had written the card’s personal identification number on her Social Security card.

Smith didn’t notice her van had been disturbed; the culprit pried a lock open and relocked the door upon leaving.

The card was used moments after it was stolen, at a bank machine just a few blocks from the football field.

Investigators used bank machine records to trace the thieves’ route more than 100 miles through five counties. The card was last used at 2:20 a.m. on Monday, Nov. 21.

By then, the group’s luck had run out.

Four of the machines they had used had hidden cameras that captured the suspects’ images on film. At a fifth, a postal inspector investigating an unrelated check-fraud case had installed a camera that took photos much more frequently than the bank machine cameras did.

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David Gallagher and his wife, Terry, both 40, became suspects almost immediately. Gallagher has been in prison five times and has 21 felony convictions, Assistant U.S. Atty. Lance Caldwell said.

Muzyn and Cline began tailing the Gallaghers in mid-December. No one was arrested right away, Muzyn said, because police didn’t immediately know who else was involved and wanted to build a stronger case against the Gallaghers.

The couple went to Reno, and Terry Gallagher told people her husband had won a $50,000 jackpot. He bought a new pickup.

She also told people she was about to inherit $500,000 from her grandmother.

On Tuesday morning, investigators arrested the Gallaghers and the owner of the Cadillac, Danny Ballow, 47. They face federal charges of unauthorized use of an access device.

Police said they found $30,000 in the suspects’ homes. Muzyn wouldn’t say what he thinks happened to the rest of the money. Smith isn’t liable for the theft.

A second woman shown in some of the ATM photos has not been arrested.

The three will spend up to 63 months in prison under federal sentencing guidelines if convicted, Caldwell said.