Police arrest two in debit card scam

  • 2002-08-29
  • Jorgen Johansson

Latvia's economic police said they had detained two men last week for attempting to use a Latvian bank to defraud U.S. debit card holders of more than $300,000.

Police said they arrested a Latvian resident and a Finnish citizen Aug. 21 after authorities at Hansabank alerted them about a suspiciously large volume of transactions.

The two men had set up an account at the bank as representatives of a tourism company and then used counterfeit payment cards to withdraw about $305,000 from U.S. debit cards in just 30 minutes, police said. But when the men attempted to withdraw the money from their new bank account, police were waiting for them.

"This is the first time something like this has been tried in Latvia," said police spokesman Krists Leiskalns. "It is possible that they are part of a larger group of people who were trying to test the bank's security system are not sure."

Ugis Zenturis, head of security at Hansabanka, said the suspicious nature of the withdrawals immediately caught the bank's eye.

"We detected the scam before anyone was affected," he said.

The quick response was part of the bank's increased security in the wake of last year's terrorist attacks on the United States. U.S. authorities have urged financial institutions around the world to keep closer tabs on suspicious transactions.

"After Sept. 11, we adopted many strict rules in our security systems. One focus is on detecting fraudulent money transactions and money laundering," said Zenturis.

Like police, he said he suspected the two men were part of a larger organization out to defraud U.S. debit card holders .

"They were prepared. They had a legally registered company supposedly dealing with tourism, and they had knowledge of how to operate accounts using plastic cards," he said.

Police confiscated some 500 counterfeit payment cards held by the two men.

Viesturs Briedis, chief of the economic police, said the two were probably members of an international crime group that underestimated Latvian bank security.

"They probably knew that our country had never seen a major fraud using payment cards before," he said. "We are still searching for accomplices we hope might lead us to the source of the cards."