By Karen Zautyk | Senior Correspondent
A Brooklyn man has pleaded guilty in a scheme to steal account information from Valley National Bank customers by installing secret recording devices on ATMs in Nutley and Belleville.
U.S. Attorney Paul J. Fishman said the 28-year-old defendant, Viktor Kafalov, entered the plea last Wednesday in Federal Court in Newark on one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
Kafalov, a native of Bulgaria, has been held without bail since his arrest June 29, 2010.
In all, authorities said, Kafalov and his co-conspirators stole information, and $278,144, from 348 bank accounts. Valley National repaid the defrauded customers and absorbed the loss.
According to documents filed in the case, Kafalov was part of a scheme that obtained account and customer identity information by “skimming” ATM cards.
In this form of theft, an electronic device (“skimmer”) and a pinhole camera are secretly inserted into an ATM. The “skimmer” reads and records the account and identity data encrypted in the magnetic strip of an ATM card. The camera records the customers’ keystrokes when they enter their personal identification number.
According to Fishman’s office, Kafalov admitted that he installed skimmers and cameras on Valley National ATMs in Belleville and Nutley in September 2008, and that, after account and ID data were obtained, that info was loaded onto blank ATM cards. Those new cards were then used to make unauthorized withdrawals.
Kafalov and his co-conspirators made withdrawals at locations in Brooklyn, Queens and Manhattan, as well as in Ontario, Canada. In addition to skimming, they 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, authorities said.
The skimmers and cameras had been placed on the Nutley and Belleville ATMs between Sept. 13 and Sept. 28, 2008, and were intermittently removed to avoid detection. The unauthorized withdrawals began in October 2008.
The bank fraud conspiracy charge carries a maximum of 30 years in prison and a $1 million fine. For aggravated identity theft, Kafalov faces a mandatory consecutive penalty of two years in prison and a maximum $250,000 fine. Sentencing is scheduled for July 27.
“Identity theft is a pervasive problem,” Fishman stated. “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 U.S. attorney cited special agents of the Secret Service, under the direction of Special Agent in Charge Jacob Christine, with the investigation leading to the guilty plea.