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4 Montreal-area men charged in Vermont ATM fraud scheme

4 Montreal-area men charged in Vermont ATM fraud scheme

Four Montreal-area men are facing charges in an elaborate fraud scheme that involved the use of gift cards to withdraw thousands of dollars from U.S. bank machines.

U.S. authorities allege Mathieu Baaklini, 21, Safwan Bensalma, 21, and Brandon Lo, 24, all from Laval, and Nicolau Manfredi, 21, from Montreal travelled to Vermont, where they used ATMs to obtain cash advances on cards using stolen account information from Canadian account holders.

The men were arrested Monday by Department of Homeland Security agents at the Highgate Springs, Vt., border crossing — across from Saint-Armand, Que. — as they attempted to enter the U.S. They were charged with conspiracy to use access devices, such as credit or debit cards, to fraudulently receive cash in excess of $1,000.

They each face a maximum of five years in prison and fines of up to $250,000 US if convicted.

After a hearing Thursday, a judge ordered the four men be detained pending the outcome of their case.

The court came to the decision on the grounds that the suspects were a flight risk "since they were Canadian citizens with no ties to the United States generally, or to Vermont specifically," explained the prosecutor in the case, assistant U.S. Attorney Kevin Doyle.

Thousands of dollars withdrawn

The U.S. Attorney's Office alleged the offences occurred between March and October of this year.

On May 24, approximately $8,800 US in cash advances was withdrawn using suspected fraudulent credit cards, they said.

A day later, one of the men allegedly made $11,000 US in wire transfers from Vermont to locations in Quebec.

Then in August, the suspects allegedly withdrew $54,000 US in the form of 500 suspected cash advances on Canadian and European credit and debit cards.

That last sum was withdrawn from ATMs belonging to NBT Bank, which only has branches in upstate New York and Vermont.

Last week, federal agents executed a search warrant on a storage unit in Williston, Vt., where they found approximately $33,000 US in cash, a laptop, a card-reading device and 378 gift cards they believe had bank account information on them.

The investigation into the men's activities "was initiated thanks to the vigilance of the Saint-Armand border services officers," said Canadian Border Services Agency spokeswoman Jacqueline Roy.

'Not uncommon' scheme

Doyle said it wasn't the first time the scheme has been seen south of the border, partly because "chip technology is not as prevalent in the U.S."

"The chip technology is essentially an anti-fraud device that prevents you from engaging in multiple transactions with the same card or the same magnetic strip," he said.

Without this protection, Doyle said, fraudsters can use card-reading machines to take someone's account information, place it onto magnetic strips, and withdraw cash advances from U.S. ATMs multiple times.

"It's not uncommon for us to encounter individuals coming into the United States and they will have numerous cards [or] gift cards, like in this case, containing the account information from others … on the magnetic strips," Doyle said.

The ages of the suspects did not come as a surprise to Doyle either.

In his experience, individuals arrested for similar fraud schemes have been young.

Doyle says the four suspects are expected back in court within the next two weeks, when the case will be presented to a grand jury for indictment.