Card Processor Hit In A $40 Million Breach. Was It Yours?

Written by Frank Hayes
May 15th, 2013

A U.S. payment card processor was attacked in February as part of a $40 million cyberheist, federal prosecutors said last Thursday (May 9)—but they didn’t identify who the processor was. That left retailers no way of knowing whether their processor was the one that thieves breached to gain essentially unlimited access to the processor’s systems, potentially including merchant card data.

It wasn’t until Sunday that the mystery breach victim was revealed to be EnStage, a processor that’s headquartered in Silicon Valley but outsources its processing to a site in India. And it’s still not certain whether any merchant card data was actually stolen in the breach.

According to an indictment unsealed on Thursday, thieves gained access to EnStage’s systems and raised the withdrawal limits on 12 specific MasterCard (NYSE:MA) prepaid debit-card account numbers issued by a bank in Oman. As a result, gangs in 24 countries were able to use ATM machines to loot the accounts of roughly $40 million during a 10-hour period on Feb. 19 and 20.

As usual, the indictment wasn’t against the ringleaders of the international criminal operation—just eight New York residents who were part of a gang that helped convert the card numbers to cash at ATMs.

A $40 million haul is one very big cyberheist, and it appears to have had a very specific target: Oman’s Bank of Muscat. According to the indictment, this kind of scheme is called an “unlimited operation” because thieves remove limits on how much can be withdrawn. It also requires highly coordinated gangs to cash out the numbers at ATMs. In this case, withdrawals appear to have begun worldwide at 3 p.m. New York time on Feb. 19 and continued until 1:26 a.m. the next morning.

And “worldwide” here means Japan, Canada, Germany, Romania, United Arab Emirates, Dominican Republic, Mexico, Italy, Spain, Belgium, France, United Kingdom, Latvia, Estonia, Thailand and Malaysia. That’s not all 24 countries where debit-card numbers were cashed out, just the ones the U.S. attorney, the Secret Service and the Department of Homeland Security mentioned.

That’s the level of criminal operation that card breaches have gotten to these days. Thieves no longer steal card numbers and then sell them off a few hundred or thousand at a time. They have enough “cashers” on the street to run thousands of ATM transactions an hour. Even more disturbing, they have the ability to break into processors and turn off withdrawal limits, so even a group as small as the eight New York cashers can steal $2.4 million overnight.

Fortunately, no individual bank accounts were compromised by the operation. At least that’s what U.S. Attorney Loretta E. Lynch told a press conference on Thursday. How does she know that more debit-card numbers and PINs weren’t stolen? Considering that none of the ringleaders were caught, none of the thieves who actually broke into the card processor’s systems were caught, and they got really deep into the processor’s systems, the fact that no other card numbers have been used for fraud yetdoesn’t exactly inspire confidence that they won’t be soon.

Certainly if a retailer was hit by this deep a breach, Visa (NYSE:V) and MasterCard would assume the worst.


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