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From: InfoSec News (alertsinfosecnews.org)
Date: Tue Jul 31 2012 - 03:43:15 CDT
By Tracy Kitten
July 30, 2012
Two men were sentenced this week in connection with fraudulent
transactions they made with compromised debit cards tied to the Michaels
In 2011, banking institutions reported tens of thousands of fraudulent
transactions linked to consumers who had visited Michaels craft stores
that were affected by the breach. POS and PIN-entry devices at 84
locations in 20 states were later found to have been swapped out with
devices manipulated to collect card numbers and PINs. Investigators say
94,000 debit and credit cards were affected by the breach.
On June 25, a judge in the U.S. District Court for the Northern District
of California sentenced Eduard Arakelyan, 21, and Arman Vardanyan, 23,
to 36 months in prison on charges of conspiracy to commit bank fraud.
Each also was sentenced to an additional 24 months for aggravated
identity theft and five years of supervised release. The court has
ordered both to pay $42,000 in restitution.
The two men, who were charged March 5, pleaded guilty on March 20,
according to a statement issued this week by the Department of Justice.
Arakelyan and Vardanyan admitted that in the summer of 2011, they used
card numbers stolen from Michaels to create nearly 1,000 counterfeit
cards they later used at ATMs in Northern California to withdraw funds
from bank accounts. Authorities say 952 debit accounts were affected by
Arakelyan and Vardanyan.
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