Federal prosecutors in Los Angeles Thursday announced the arrest of 15 people who allegedly used information from “skimmed” electronic benefit transfer cards to make unauthorized withdrawals of funds that had been disbursed to the needy.
More than 300 law enforcement officers early Wednesday began monitoring about 20 ATM locations across the Los Angeles area and identified individuals who were making multiple cash withdrawals with cards encoded with information that had been stolen from cards used by the California Department of Social Services to provide CalFresh and CalWORKs benefits to qualified recipients, according to the U.S. Department of Justice.
“By stealing public benefits using counterfeit EBT cards, the defendant in these cases plundered the accounts of some of our community’s poorest residents — people who need these benefits to survive,” U.S. Attorney Martin Estrada said in a statement.
“These actions are part of a larger assault on the EBT system, one which has caused tens of millions of dollars in losses. Working with our law enforcement partners who have devoted untold resources to combating this issue, my office will continue to do everything in our power to stop criminals from victimizing people in our community, especially those who are most vulnerable.”
Authorities made arrests after determining that the suspects at the ATMs were not entitled to access funds that had been deposited into beneficiary’s accounts. So far, prosecutors have filed five criminal complaints charging defendants with the use of unauthorized access devices — the cards used to make the cash withdrawals — or possession of 15 or more unauthorized access devices, and they are expected to file additional cases later Thursday and Friday.
The defendants arrested, many of them Romanian nationals, are expected to begin making initial appearances Thursday afternoon in Los Angeles federal court.
The Los Angeles Police Department started the investigation into the fraudulent withdrawal of benefits in August 2022, and the U.S. Secret Service soon after joined “Operation Urban Justice” as a joint partner.
Documents filed in federal court outline how state officials identified more than $38.9 million in funds stolen from victims’ EBT cards. This fraud has targeted CalWORKs and CalFresh — previously known as “food stamps” — both of which are intended to help low-income beneficiaries purchase food and provide for basic needs.
The investigation revealed that the fraudulent withdrawal of these benefits is done with “cloned” cards, which are debit cards, gift cards or other devices with magnetic strips that have been encoded with information from legitimate EBT cards. Court documents allege that at least some of those involved in the fraudulent withdrawals obtained stolen EBT card information from skimming devices installed on ATM machines, the DOJ said.