News Release
U.S. Department of Justice
United States Attorney
District of Rhode Island
December 6, 2007
Last of four defendants is sentenced in supermarket PIN-pad tampering
A federal judge today sentenced Mikael Stepanian to 72 months in prison for stealing supermarket customers’ account data by tampering with PIN-pad terminals.
United States Attorney Robert Clark Corrente announced the sentence, which U.S. District Court Judge William E. Smith imposed in U.S. District Court, Providence.
Three codefendants have also been sentenced. Last week, Judge Smith sentenced Arutyun Shatarevyan to 66 months in prison, and in September, he sentenced Arman Ter-Esayan to 72 months, and Gevork Baltadjian to 61 months.
All four prison terms include a two-year consecutive sentence for aggravated identity theft – using identity theft to commit another felony. Judge Smith also ordered the defendants to repay 27 banks approximately $132,000 that was fraudulently obtained as a result of the scheme.
During hearings in June and July, Stepanian, Shatarevyan, Ter-Esayan, and Baltadjian pleaded guilty to their roles in the scheme. Assistant U.S. Attorney Lee H. Vilker said the government could prove that the four men, all from the Los Angeles area, flew to New England twice in February to execute the scheme.
During overnight hours at Stop & Shop stores, the defendants replaced PIN-pad terminals at checkout counters with similar looking devices that had been electronically altered to capture the account data of cards that customers swiped through the terminals. When they entered a store, one of the men distracted a clerk while two others swapped terminals. A fourth defendant waited in a car outside the store. Several days later they returned to the store, replaced the original terminal, and made off with the altered one containing customers’ account information.
The defendants captured account numbers from terminals in at least four Stop & Shop stores in Rhode Island: Tiogue Avenue in Coventry; 200 Atwood Avenue, Cranston; Quaker Lane in Warwick; and Branch Avenue in Providence. They also attempted terminal swaps at other Stop & Shop stores, including one in Seekonk, Massachusetts. The captured customers’ accounts were held at 27 different financial institutions.
Secret Service agents have determined that unidentified persons in California and Arizona fraudulently made $132,262 in fraudulent withdrawals and purchases against 238 of the compromised accounts. The fraudulent transactions involved accounts used by customers at the Coventry and Cranston stores.
The scheme began to unravel when an investigator at Citizens Bank detected a common point in a rash of unauthorized ATM withdrawals: all of the compromised accounts had been used either at a Stop and Shop in Coventry or one in Cranston. Stop & Shop security personnel subsequently reviewed store surveillance tapes and saw the defendants switching PIN-pad terminals. Police arrested the four defendants at the Coventry store on February 26, after employees recognized them from surveillance photos posted in the store.
From the defendants’ hotel rooms in Manchester, Connecticut, police seized materials than can be used in skimming credit and debit card information. A laptop computer seized from
one ofthe hotel rooms contained thousands of credit and debit card account numbers and PINs.
The Secret Service, Coventry Police, and the Rhode Island State Police investigated the case, with assistance from security officials at Stop & Shop, Citizens Bank, and other financial institutions.