Edward Arakelyan and Arman Vardanyan each pled guilty to one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of aggravated identity theft, according to a US Justice Department statement.
The two men admitted to participating in the fraud by using stolen bank card numbers to withdraw thousands of dollars from ATMs in northern California. According to court documents, Arakelyan and Vardanyan possessed two loaded firearms, a GPS device pre-programmed with ATM locations, and eight mobile phones, all to further their scheme.
They were part of a broader conspiracy to replace about 84 authentic PIN pads – used by Michaels' stores to process debit and credit card purchases – with fraudulent pads from which conspirators downloaded customers’ banking information, the statement said. The Financial Fraud Enforcement Task Force is pursuing others involved in the scheme.
After the breach, financial institutions reported tens of thousands of incidents of fraudulent activity linked to customers who had visited the affected Michaels stores.
“Mr. Arakelyan and Mr. Vardanyan used stolen bank account information to withdraw tens of thousands of dollars in consumer funds from ATMs across northern California….They stuffed their pockets with other people’s money. This easy cash has now come at a high price. As the defendants have learned the hard way, this Justice Department is aggressively pursuing consumer fraud schemes from coast to coast”, said Assistant Attorney General Lanny Breuer.
Each bank fraud charge carries a statutory maximum sentence of 30 years in federal prison. The aggravated identity theft charge carries a mandatory additional sentence of two years. The sentencing of Arakelyan and Vardanyan is scheduled for July 24, before US District Judge Claudia Wilken in Oakland.