Leader of CitiBank fraud conspiracy enters 13th guilty plea in case

SAN DIEGO (CNS) – A Fillmore man admitted in federal court in San Diego Tuesday to organizing and leading a conspiracy to steal more than $1 million from Citibank through cash-advance kiosks in a dozen casinos from Southern California to Nevada.

Ara Keshishyan, 31, faces a maximum penalty of five years’ imprisonment and a $250,000 fine for his role in the scheme, which exploited a gap in the bank’s electronic-transaction security protocols in order to overdraw more than 20 accounts by tens of thousands of dollars each..

Keshishyan, the 13th defendant to plead guilty in the case, recruited conspirators to open checking accounts and funded them with seed money that would form the basis for future fraudulent withdrawals, according to prosecutors.

Keshishyan and his confederates then traveled to various casinos, including the Morongo, Pechanga, San Manuel, Agua Caliente, Chukchansi, and Spa Resort casinos in California; the Tropicana, Wynn, Bicycle, and Whiskey Pete’s casinos in Las Vegas; and Harrah’s in Laughlin, Nevada.

Once inside a casino, Keshishyan instructed the conspirators on how to conduct identical fraudulent withdrawals at cash-advance kiosks within a short time window in order to circumvent Citibank security procedures.

Keshishyan’s technique took advantage of a glitch that allowed withdrawals of several times the amount of money deposited into the accounts. In one case, Keshishyan and one of his accomplices were able to withdraw 10 times the actual balance, according to the U.S. Attorney’s Office in San Diego.

The conspirators were careful to keep their deposits and withdrawals under $10,000 – typically between that amount and $9,000 – in order to avoid federal transaction reporting requirements.

Keshishyan admitted that he and his co-conspirators stole more than $1 million from Citibank between June 2009 and the following January. He further admitted that, as organizer of the conspiracy, he personally took a cut of every fraudulent withdrawal he directed.

Keshishyan is scheduled to be sentenced Sept. 12.

Several of his co-defendants have been ordered to serve prison time and pay restitution. The lone remaining charged defendant is a fugitive.