The FBI has charged 14 individuals with the theft of over $1 million in an elaborate scam at cash advance casino kiosks operated by Citibank in Southern California and Nevada.
According to an indictment, the defendants stole the money by exploiting a gap - which required multiple withdrawals all within 60 seconds - in Citibank's electronic transaction security protocols.
The gang set up fake Citibank accounts using seed money supplied by ringleader Ara Keshishyan. He and his co-defendents then travelled to nearly a dozen casinos and drew down the cash in a series of co-ordinated withdrawals that exploited a 60-second gap in updating account balances.
The indictment alleges that, after the cash was collected from the casino cages, Keshishyan would typically give conspirators their cut - and keep the remainder of the stolen funds - which were often used to gamble. The casinos frequently comped the conspirators with free rooms due to their extensive gambling activity. As part of the alleged scheme, the defendants were also careful to keep both their deposits and withdrawals under $10,000 in order to avoid federal transaction reporting requirements.
All of the defendants are charged with conspiracy to commit bank fraud and conspiracy to illegally structure financial transactions to avoid reporting requirements, which is punishable by up to five years in prison, and a $250,000 fine. In addition, defendant Keshishyan is charged with 14 counts of bank fraud, each of which is punishable by up to 30 years in prison and a $1,000,000 fine.