News and Press Releases

Brooklyn man pleads guilty to aTM skimming scheme targeting new jersey bank customers



FOR IMMEDIATE RELEASE
April 27, 2011


 

NEWARK, N.J. – A Bulgarian native and Brooklyn, N.Y., resident today admitted to a scheme to steal account information from bank customers by installing secret recording devices on ATMs in Nutley and Belleville, N.J.

Viktor Kafalov, 28, pleaded guilty in Newark federal court to an Information charging him with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Kafalov entered his guilty plea before U.S. Magistrate Judge Patty Shwartz, who recommended to U.S. District Judge Faith S. Hochberg that his plea of guilty be accepted and entered. The defendant has been held without bail since his arrest on June 29, 2010.

According to documents filed in this case and statements made in court:

The charges stem from Kafalov’s participation in a “skimming” scheme to obtain account and identity information from ATMs at Valley National Bank branches in Nutley and Belleville. In skimming, identity and account information contained in the magnetic strip of an ATM card is read and recorded by an electronic device, or skimmer, that is secretly inserted into the ATM – along with a pinhole camera that records the bank customers’ keystrokes when they enter their personal identification number (“PIN”).

Kafalov admitted that he installed skimmers and cameras on the Valley National Bank ATMs in September 2008, and that after account and identification information was obtained, it was transferred and loaded onto blank ATM cards. The newly created cards were then used to make unauthorized withdrawals from the skimmed accounts.

Kafalov also admitted that he and his co-conspirators withdrew funds from the skimmed accounts at various New York locations in Brooklyn, Queens, Manhattan and Long Island City, as well as in Mississauga, Ontario, Canada.

In addition to skimming, Kafalov and his co-conspirators inserted empty deposit envelopes into ATMs to falsely inflate the funds that appeared to be available in the accounts and allow them to withdraw more money.

In all, Kafalov and his co-conspirators stole information pertaining to approximately 348 accounts, and defrauded Valley National Bank of approximately $278,144 by making numerous unauthorized withdrawals with counterfeit ATM cards in October 2008. The bank absorbed the loss when it repaid the defrauded customers.

U.S. Attorney Fishman stated: “Identity theft is a pervasive problem. When coupled with ATM skimming, thieves have all they need to take cash right out of victims’ accounts. Skimmers’ spying devices have become increasingly sophisticated, designed to fool even the most discerning ATM user. We caution consumers to be vigilant, and skimmers that we are on to your tricks.”

The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The aggravated identity theft charge carries a mandatory, consecutive penalty of two years in prison, and a maximum $250,000 fine. Sentencing is currently scheduled for July 27, 2011.

U.S. Attorney Fishman praised the special agents of the United States Secret Service, under the direction of Special Agent in Charge Jacob Christine, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Lorraine S. Gerson, of the U.S. Attorney’s Office Economic Crimes Unit in Newark.


11-173                                                                                        

Defense counsel: Patrick Joyce Esq., West Orange, N.J.

Kafalov Information

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