LOS ANGELES
“Operation Urban Justice,” a large-scale law enforcement operation this week, has resulted in the arrest of 15 individuals who allegedly used information from “skimmed” electronic benefits transfer (EBT) cards to make unauthorized withdrawals of funds that had been disbursed to low-income individuals, the Justice Department announced Thursday.
More than 300 law enforcement officers early Wednesday morning began monitoring about 20 ATM locations across the Los Angeles area,
They identified individuals 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.
Authorities made arrests after determining that the suspects at the ATMs were not entitled to access funds deposited into beneficiary’s accounts.
At this time, federal 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.
They are expected to file additional cases later Thursday and Friday.
The defendants were arrested, many of them Romanian nationals.
The Los Angeles Police Department started investigating 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 the California Department of Social Services has identified over $38.9 million in funds stolen from victims’ EBT cards.
This fraud has targeted CalWORKs and CalFresh (previously known as “food stamps”), both intended to help low-income beneficiaries purchase food and provide for basic needs.
The investigation has revealed that the fraudulent withdrawal of these benefits is made with “cloned” cards, which are debit cards, gift cards, or other devices with magnetic strips encoded with information from legitimate EBT cards.
Court documents allege that some of those involved in the fraudulent withdrawals obtained stolen EBT card information from “skimming” devices installed on ATMs.
“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,” said U.S. Attorney Martin Estrada. “These actions are part of a larger assault on the EBT system, one which has caused tens of millions of dollars in losses.”
“Today’s successful operation demonstrates how a sophisticated and extensive criminal scheme can be disrupted and dismantled by a team of law enforcement professionals who approach their investigation with an even greater degree of cooperation,” said James Huse, Special Agent in Charge with the Los Angeles Field Office of the U.S.Secret Service. “
“On March 1, 2023, the Los Angeles Police Department’s Commercial Crimes Division partnered with the United States Secret Service and other federal law enforcement agencies to conduct a collaborative enforcement operation targeting the State of California’s Electronic Benefits Transfer (EBT) fraud issue with losses in the tens of millions of dollars,” said Los Angeles Police Chief Michel Moore.
Adding,“the operation involved numerous Los Angeles Police Department personnel and resulted in the recovery of 429 cloned state-issued EBT cards, $129,000 in US currency unlawfully drawn from ATMs at several Southern California banking institutions, as well as resulting in the arrests of 11 Romanian national individuals for EBT access card fraud with losses totaling over $1000-a federal felony.
All of the individual cases will be filed by the United States Department of Justice (USDOJ), U.S. Attorney’s Office (USAO) for federal prosecution.”
On February 2, as part of Operation Urban Justice, three additional defendants were arrested after they allegedly withdrew funds from ATMs in Hollywood and Tarzana with cloned EBT cards.
All three were subsequently named in federal indictments that charged them with bank fraud (which carries a statutory maximum penalty of 30 years in federal prison), aggravated identity theft, unlawful use of unauthorized access devices and possession of 15 or more unauthorized access devices.
Defendants are presumed innocent unless proven guilty.
The U.S. Secret Service and the Los Angeles Police Department are investigating these cases.
Assistant U.S. Attorneys Nisha Chandran and Joshua O. Mausner of the General Crimes Section are prosecuting these cases.