Eideard

Daylife/Reuters Pictures used by permission

Under Operation Cash Exchange, the FDLE, Florida Department of Law Enforcement, targeted 16 stores believed to be responsible for $3.5 million in fraud over the past year. Retailers allegedly pocketed cash from a federally funded assistance program.

Besides Wayne Stumbo, two others were arrested at Big Daddy’s Quick E Driveby in Tampa, Florida, where Stumbo worked as a clerk. They were identified as store owner Curtis Walker and employee Tabitha Wood.

Agents say Big Daddy’s was a front for illegal transactions that cost Florida taxpayers millions. “If you multiply nationwide, it has to be in the billions of dollars,” said Ken Tucker, the FDLE’s assistant commissioner…

At first glance, they look like your typical convenience store purchases — beer, cigarettes, maybe even cash back — all obtained with the swipe of a debit card.

But if your debit card has government assistance money in its account, these transactions are illegal. And, if you’re a store owner or manager who accepts the card for these items, you could face arrest and jail time…

Law enforcement agents say the fraud involved the use of government debit cards, called Electronic Benefit Transfer cards. The cards can be used only to purchase food. They can’t used to buy liquor or tobacco, and they can’t be converted to cash.

According to investigators, the scam works like this: A store clerk swipes a debit card and then uses a keypad to punch in the dollar amount. So, if a clerk punches in a transaction for $200, he or she might hand a customer $100 in cash. The store owner makes a quick but illegal profit, and the customer has cash to buy whatever he or she wants…

“It’s a colossal cost to state governments,” said Russ Fernandes, the FDLE’s chief of public assistance fraud.

Some of the stores were small, with barren shelves of expired food, according to investigators. The FDLE believes that many were set up to defraud the government of money.

RTFA. Lots of anecdotal evidence, views. Just another example of how some sleazy bastards can figure out how to turn a trick from someone else’s unfortunate bag.

Electronic transfers has simplified processes for the crooks as well as government.

After the Vegas DEFCON ATM debacle where hackers hacked hackers by setting up a fake ATM in front of the facilities security office, I needed to see how stupid easy it was to buy an ATM and just set it up anywhere. So my search began.

I started looking on e-bay and found plenty of new and used ATMs ranging from $500-2500 but quickly determined I didn’t want to pay $300 for shipping. Next was Craigslist…

I quickly found an ad from a bar north of Boston. They were selling pool tables, Budweiser neon signs and an ATM. I took my hacker with me and met Bob. Bob rented a room above the bar and was doing the deed for the owner. The bar was an old relic that was closing and liquidating its grungy assets. The ATM was sitting right next to the bar covered in 5 years of beer. Thank heavens they were smart enough to cover the keypad in clear plastic…

Needless to say I wanted to unbolt this thing as quickly as possible, get out of there and douse myself head to toe in pure alcohol hand sanitizer. After my hacker played with the manual, got it working and determined it was worth the financial risk, we loaded it on my trailer, paid $750 (down from a grand) and brought it home and put it in my garage.

My hacker comes over to my garage, manual in hand, all giggly, like hackers sometimes do and says “Watch this”. He punches the master codes to access the machines data on a device called an eprom and hundreds of credit and debit card numbers just start falling all over the floor…

Here’s the first of a few upcoming videos of what happened next:

This could make you never want to use an ATM ever again. And stay out of sleazy bars.