News Release
U.S. Department of Justice
United States Attorney
District of Rhode Island
September 7, 2007
Two are sentenced in supermarket PIN-pad tampering
A federal judge today sentenced two men to prison for tampering with supermarket PIN-pad terminals and stealing customers’charge card and debit card account data.
United States Attorney Robert Clark Corrente announced the sentences, which U.S. District Court Judge William E. Smith imposed today in U.S. District Court, Providence.
Judge Smith sentenced Arman Ter-Esayan to 72 months in prison, and Gevork Baltadjian to 61 months. The prison terms include a two-year mandatory consecutive sentence for aggravated identity theft. Judge Smith also ordered both men to repay 27 banks approximately $132,000 that was fraudulently obtained as a result of the scheme.
Still awaiting sentencing are Arutyun Shatarevyan, and Mikael Stepanian, who have admitted their roles in the conspiracy and are detained.
In May, 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 into southern New England twice in February to execute the scheme.
During overnight hours at 24-hour 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 confirmed 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 that the defendants compromised at the Coventry and Cranston stores.
The scheme began to unravel in mid-February, when an investigations manager at Citizens Bank detected that a common point in a rash of unauthorized ATM withdrawals was Stop & Shop: 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.
A search of the defendants’ hotel rooms in Manchester, Connecticut, produced materials than can be used in skimming credit and debit card information, including credit card readers and wiring of the type found in altered PIN-pad terminals. A laptop computer seized from one of the hotel rooms contained thousands of credit and debit card account numbers and PINs, stored in folders labeled “Stop & Shop.”
All four defendants pleaded guilty to conspiracy to traffic in unauthorized access devices and to aggravated identity theft, which is identity theft in furtherance of another felony.
Stepanian is scheduled to be sentenced on November 2, and Shatarevyan on November 30.
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.
Contact: 401-709-5032 Thomas.connell@usdoj.gov