With Electronic Benefit Transfer fraud and illegal credit card skimming manifesting throughout the country, the U.S. Secret Service this month successfully executed an ambitious operation aimed at eliminating the scourge that targets financially vulnerable communities.
For two days this month, the Secret Service — along with Homeland Security Investigations’ (HSI) El Camino Real Financial Crime Task Force and other federal, state and local partners — descended on Southern California to carry out the highly coordinated operation dubbed May Magnitude.
Secret Service Director Sean Curran was on hand to oversee the operation, which resulted in 10 arrests and the removal of 20 illegal skimming devices, saving taxpayers and recipients an estimated $8.4 million.
“The Secret Service is tasked with safeguarding the nation’s leaders and our financial infrastructure. For years, we have sought to identify, monitor and eliminate organized crime throughout the globe that threatens our economic stability,” Curran said. “Protecting our nation’s most vulnerable communities is a responsibility that we take very seriously and that I am passionate about. I am proud of the work the Secret Service did in collaboration with HSI, the USDA and our local law enforcement partners to successfully carry out this important mission.”
“May Magnitude” involved 27 teams spread throughout the Los Angeles, San Bernardino and San Diego areas on May 1-2. During the operation, 219 re-encoded cards and eight cloned point-of-sale terminals were seized, and nearly $47,000 in cash recovered.
The operation targeted criminals looking to fraudulently cash out at ATMs and use cloned point-of-sale terminals to carry out their scams. Secret Service personnel also conducted Electronic Benefit Transfer (EBT) outreach to multiple area businesses.
As part of the operation, Secret Service personnel visited 130 businesses and hand-checked 575 terminals and devices, including ATMs, gas station pumps and grocery store point-of-sale machines.
Mike Centrella, assistant director for the Office of Field Operations, noted that in addition to educating the public, the operation’s main goal was to protect the community from losing out on the funds needed to maintain their households.
“These access points are easy and are vulnerable. This gives (criminals) access to people’s funds that are delivered every month — government-protected funds,” Centrella said. “And again, this is very impactful for a community that is struggling. Our goal is to make sure we get the message out and protect the community. It’s very impactful for (victims). It’s life-altering for them. They depend on these monies every month to come in. They go to a store to make a purchase for nutrition, to feed their families, and those funds aren’t there.”
Across the country, Americans lose more than $16 billion to illegal credit card skimming each year. EBT cards that are not equipped with protective chips are especially vulnerable to fraud.
“This fraud affects our community’s most vulnerable population, so the U.S. Secret Service is doing its part to ensure that those funds stay with who they were intended to be for,” said Deputy Special Agent in Charge Armando Marquez of the Los Angeles Field Office.
Typically, in these cases, criminals steal EBT card information by installing electronic devices on ATMs, gas station pumps or merchant point-of-sale terminals to capture credit card information — a tactic commonly referred to as skimming.
The Secret Service and its law enforcement partners have observed an increase in nationwide point-of-sale and ATM skimming-related activity over the past 18 to 24 months. Criminals use skimming devices to capture card information from EBT cards and then encode that data onto another card with a magnetic strip, such as a hotel key.
Point-of-sale skimming devices are typically overlays that cover either the entire top exterior of the terminal or just the keypad and card reader slot.
These skimming devices can be difficult to detect because criminals will design plastic overlay shells that look identical to the top of the terminal and fit securely.
These skimming devices can be designed to capture both the data on the card’s magnetic strip and its chip. Overlay skimming devices also can capture all keypad entries, including PINs, if a debit card is used.
Other partner agencies involved in the operation included the Diplomatic Security Service, USDA, U.S. Department of Health and Human Services, Baldwin Park Police Department, Culver City Police Department, Los Angeles County Sheriff’s Department, Garden Grove Police Department, Inglewood Police Department, Hermosa Beach Police Department and the Los Angeles County District Attorney’s Office.
“The Secret Service can’t do this alone. We do this with our public and private partners. We can’t thank our law enforcement partners enough from the local area for assisting us today and for continuing to assist us throughout this investigation,” Centrella said. “These investigations are ongoing. As long as the bad guys are out there acting and performing, we’ll be out there to investigate.”
