4 charged with trying to steal customer data at R.I. store
Officials: National ring made debit cards, stole thousands
Four California men arrested at a Stop & Shop store in Coventry, R.I., could be at the center of a national ring to steal customer credit- and debit-card data, law enforcement officials said.
Officials allege the suspects' Rhode Island scheme involved "skimming," or stealing consumer information by tampering with card readers in checkout lanes.
The four were charged late Monday with computer theft, computer trespass, and other felonies, Rhode Island authorities said.
A spokesman for the state's attorney general, Patrick C. Lynch, alleged the suspects used stolen data to make fake debit or ATM cards and withdraw more than $100,000 from banks, including Citizens Financial Group.
They had previously stayed in a motel in Connecticut and may be connected to similar cases involving retailers in Las Vegas, Miami, Philadelphia, and Richmond, said Lynch and Thomas Powers, head of the Secret Service's Providence office.
"This has been a tremendous break in what's becoming a look into a group of people who may be much bigger," Lynch said yesterday. Their alleged action "isn't a robbery, they're not holding a gun to your head, but they're taking people's names and running with them, which can be far more threatening in the long run."
Police said they made the arrests after Stop & Shop Supermarket Co. employees noticed that two of the suspects were trying to distract store workers around 10:30 p.m. Monday, while a third allegedly tried to tamper with or remove the PIN pad. A fourth suspect was waiting in the parking lot.
The men apparently had returned to the supermarket less than two weeks after the Quincy-based chain said it had discovered tampering with some card readers and bolted them down at all of its 385 stores in New England, New York, and New Jersey.
The alert prompted much news media attention, but Powers suggested the alleged thieves may have left the area and didn't pick up on the heightened scrutiny.
"I'm guessing they were probably bouncing around; why else would you come back to the same place?" he asked. "To me that's greed. If you're a good criminal, you should move on."
Arrested were Arutyun Shatarevyan, 20, Gevork Baltadjian, 20, Arman Ter-Esayan, 22, and Mikael Stepanian, 28.
Lynch said bail for all four suspects was set at amounts ranging up to $200,000 by a Kent County judge in Warwick yesterday.
Under Rhode Island law, they are considered to have pled not guilty to four felony charges each. They are in the process of hiring attorneys. Each charge carries a possible sentence of up to five years in prison upon conviction.
The Secret Service continues to investigate the case, Powers said.
Databases list addresses for Shatarevyan, Ter-Esayan and Stepanian in the Los Angeles area. None could be reached for comment.
Neither officials nor a Stop and Shop spokesman would specify how the card readers were tampered with.
In general, card skimming is just one of a number of techniques that can be used to steal consumer identities for fraudulent uses such as buying goods or getting cash advances. While most banks and card issuers insure customers against fraud, financial-services executives worry that consumers could lose confidence in the payment system amid growing losses. The Framingham retail giant TJX Cos., for instance, reported in January that data for millions of credit- and debit-card users may have been compromised.
Lynch, who praised Stop & Shop's response, said at least 1,000 cardholders have had their accounts compromised in the Rhode Island case and that banks have begun to report losses. They include about $100,000 from Citizens and about $15,000 at two credit unions.
Card readers are seen as a vulnerable part of the payments network, because they collect numbers stored on credit cards' magnetic stripes, which are relatively easy to copy.
Skimming techniques include putting memory chips inside card readers to capture account and PIN numbers, or intercepting data as it's transmitted to bigger systems operated by the card networks Visa International and MasterCard Inc.
"This is a combination of high-tech and low-tech crime," said Mark Rasch, managing director for the security firm FTI Consulting, in Washington. "The physical installation is low-tech, but the device itself might be quite high-tech."
Ross Kerber can be reached at email@example.com.