8 Men Charged in Suspected ATM Fraud Ring

Federal authorities charged eight men Tuesday with taking part in a sophisticated ATM fraud that allegedly stole more than $2 million from bank and gas station customers throughout Los Angeles County.

Authorities say the men, who worked as service station operators and bank tellers, conspired with the ring’s leaders to illegally tap into the bank accounts of thousands of unsuspecting customers. One of the men named in the 41-page federal criminal complaint is a fugitive.

The gas station clerks allowed others in the conspiracy to connect laptop computers to ATM machines to capture customers’ bank account numbers, the Department of Justice alleged. They also are accused of installing video cameras to record customers keying in their personal identification numbers.

Using the videotapes, ring members allegedly matched personal identification numbers with stolen account numbers. Later, the numbers were encoded on blank magnetic cards and used by low-level “runners” to withdraw cash from convenience store ATMs, prosecutors said.

“This is undoubtedly the largest ATM fraud ring that I’ve ever seen,” Assistant U.S. Atty. Stephen G. Larson said. “It is certainly larger than we initially believed.”

The two-year multi-agency investigation of the ring came to a head in March, when FBI agents arrested the ringleaders--Raffie Eskandarian, 26, of Tujunga, and Rene Simonian, 26, of Glendale--and 11 bank and service station clerks.

Gilbert Petrosian, described as the group’s “No. 1 runner,” is still at large and believed to be hiding in Iran, according to authorities.

Eskandarian, Simonian and Patrick Khalafian, 28, of Montrose--who designed the computer program that downloaded account numbers as customers ran their cards through the ATMs--have pleaded guilty to access device fraud. Larson said they are cooperating with authorities and have not yet been sentenced.

Federal and local authorities arrested four more bank tellers July 2, and Tuesday morning they arrested eight gas station operators and alleged “recruiters” for the ring. Another suspect is still at large.

*

Although the amount of ATM fraud pales in comparison with credit card fraud, bank security experts say it is a burgeoning problem that is hitting the western United States especially hard. According to a 1995 study by a private bank security agency--the most recent data available--ATM fraud accounted for nearly $100 million stolen from U.S. financial institutions that year. The western United States, because of California’s large number of ATMs, accounted for more than 70% of those losses.

The problem appears to be on the increase. Between 1993 and 1994 the number of ATM fraud claims rose 29% and money losses rose 142%, according to banking industry sources.

The first electronic ATM fraud operation of this type was uncovered in 1997 in Orange County when FBI agents arrested four people who attached a laptop computer to an ATM terminal to read personal identification number codes and account numbers.

The alleged bank insiders arrested July 2 are Armond Abramian, 22, of Glendale; Armen Allahverdian, 25, of West Hills; Edmond Aslan, 28, of Las Vegas, and Karlo Babakhanian, 24, of Burbank--all former tellers at Great Western Bank branches.

The service station workers arrested and charged Tuesday are Kamal Sayed Alfridi, 30, of Woodland Hills; Boris Olshansky, 43, of Los Angeles; Shin-Tuo “Stone” Li, 38, of Long Beach, and Wriur Levon Arabian, 26, of Ontario.

Arabian’s brother, Dikran, 24, was arrested at his Ontario house by San Bernardino County authorities Friday on suspicion of possession of 620 pounds of high-grade packaged marijuana. Officials said the pot had a street value of about $3 million.

The alleged recruiters of the gas station and bank employees arrested and charged Tuesday are Arnou Aghamalian, 24, of Glendale; Noorullah Kator, 25, of Encino, and brothers Avedis Grimyan, 26, and Tigran Grimyan, 24, both of Glendale.

Another alleged recruiter, Vladmir Grishen, escaped arrest Tuesday and is considered a fugitive, authorities said. Grishen’s aliases include Robert Langer and Vincent Duran, and “his last known address is a post office box in Beverly Hills,” FBI spokesman John Hoos said.

Grishen has previously been convicted of possession of a concealed weapon and conspiracy to commit wire fraud. According to a federal affidavit, Grishen “is in the process of having his fingerprints surgically altered. [Grishen] changes his hair color frequently and . . . only drives rental cars under false names.”