25 September 2020

Skimming and Survivor Fraud

In Islam v R [2020] NSWCCA 236 Tariqul Islam has been unsuccessful in an appeal after convicttion for 'skimming' offences. 

Wilson J states that Islam had entered a plea of guilty in the Local Court and was committed for sentence with respect to the following offences: 

 An offence contrary to s 93T(1A) of the Crimes Act 1900 (NSW) that the applicant knowingly participated in a criminal group by directing the activities of the group, knowing that his participation contributed to criminal activity. This offence carries a maximum sentence of 10 years imprisonment; and

An offence contrary to s 192J of the same Act that the applicant dealt with identification information, being credit card information for over 550 persons, intending to commit fraud. This offence similarly carries a maximum sentence of 10 years imprisonment. 

The Crown's statement of agreed facts  indicated that 

 The applicant was the “ringleader” of a group of men, all taxi drivers, who were involved in a scheme to “skim” the data from credit cards of unknowing taxi passengers, thereafter producing a clone of the victim’s credit card which could be used to withdraw cash or purchase goods. Between late August 2017 and late January 2018, the applicant directed the activities of the four other men who were involved, and many hundreds of thousands of dollars were fraudulently obtained by them.  

The applicant managed the scheme, recruiting taxi drivers to participate, instructing them in the use of a “skimming device”, cloning fraudulent credit cards, and subsequently directing the activities of his co-offenders. 

The applicant had possession and control of five devices known as “Ghost Terminals”. Ostensibly portable EFTPOS terminals, participating taxi drivers used the devices to collect a fare from a passenger who had used the taxi driven by the particular member of the group. In fact, the terminal did not process a charge on the passenger’s credit card in payment for the journey; instead, it “skimmed” or recorded the data contained on the magnetic strip on the card, which included the personal identification number, or “PIN”, necessary to access cash machines. 

The applicant’s practice was to distribute the Ghost Terminals to his four co-offenders, who used them to record the credit card details of passengers of the taxi service. The men would then meet at a pre-arranged location and return the terminals to the applicant. The applicant paid the drivers a fee for each card “skimmed”. The applicant used the data recorded by the drivers on the terminals to clone credit cards using the skimmed or stolen data. For all practical purposes, the cloned card functioned in the same way as the original credit card it copied, and the cards were then able to be used to withdraw cash or purchase goods. 

Electronic surveillance by police officers of the applicant recorded him instructing other group members in the use of cloned cards – which he provided to them – in automatic teller machines (“ATM”) to withdraw sums of money from the accounts of the victims of the group. The applicant was careful to use different ATMs for each group of transactions, and to instruct his co-offenders to make modest withdrawals of $500 or less to avoid exceeding any daily withdrawal limit. He also provided information as to the conduct of his co-offenders, to assist them to avoid “looking suspicious”. 

The applicant was followed by police officers on a number of occasions as he and a co-offender drove from place to place, using multiple cards in ATMs located around Sydney to withdraw sums of money. At the end of any particular day, the applicant counted the money stolen in the various transactions and paid the relevant co-offender a share of the fraudulent takings. He was observed to direct these outings on multiple occasions. This scheme was reflected by the s 93T(1A) offence. 

The drivers were progressively arrested by police until, on 26 January 2018, the applicant was arrested at his home in Marrickville. His home was searched. Police officers found a sum of cash on the applicant’s person, and a laptop computer which contained card cloning software that could be used to clone credit cards. The laptop also held the credit card information of 557 specific individuals, of which 98 sets of information had already been used to clone cards and make fraudulent cash withdrawals. The information was held by the applicant to facilitate the commission of further fraudulent activity (the s 192J offence). 

Electronic surveillance during the course of the investigation into the applicant’s conduct established that he had been stealing and cloning credit card data for the previous three years, and had fraudulently obtained between $250,000 and $300,000. 

Throughout the period that the applicant was directing these fraudulent activities, he was at liberty subject to conditional bail granted to him by the Supreme Court, he having been earlier charged with 19 counts of obtaining a financial advantage by deception, contrary to s 192E(2)(b) of the Crimes Act. He was in fact awaiting the completion of sentence proceedings with an intensive correction order (“ICO”) in contemplation when he was charged afresh. 

The matters were not able to be joined and dealt with together because the applicant did not enter pleas of guilty to the second set of charges until well after the finalisation of the first set. 

The applicant’s criminal history as it was before the sentencing court reveals that the applicant was convicted before the District Court of 11 of the outstanding sentence matters, with the balance of 8 offences taken into account pursuant to s 33 of the Crimes (Sentencing Procedure) Act 1999 (NSW) (the “CSP Act”). On 20 April 2018, an aggregate sentence of 2 years imprisonment was imposed upon him, to date from 19 December 2017 and expiring on 18 December 2019. A non-parole period (“NPP”) of 15 months imprisonment was specified, which concluded on 18 March 2019. The sentencing judge, his Honour Acting Judge Armitage, made a finding of special circumstances pursuant to s 44(2) of the CSP Act in the applicant’s favour, reducing the NPP by 3 months on the ordinary statutory ratio that would otherwise have seen the applicant serve a NPP of 18 months. Parole was made subject to the supervision of the Community Corrections Service, with a direction that the applicant accept drug rehabilitation and psychological services. 

The only other matter in the applicant’s criminal history was a conviction for common assault in December 2016, which was dealt with by way of a fine. 

Information relating to the 2018 proceedings was provided to the sentencing court in April 2019. The Crown tendered the indictment containing the 11 counts contrary to s 192E(1)(b) to which the applicant had pleaded guilty, the Form One document with details of the 8 further offences that the applicant acknowledged having committed and asked to have taken into account on sentence for those matters on indictment, an agreed Statement of Facts, a Pre-Sentence report (“PSR”) and an ICO Assessment Report. 

The facts of the earlier offences were broadly similar to those before his Honour Judge Williams SC. They came to light when police officers in Picton observed the applicant and another man parked in suspicious circumstances in the township late at night on 29 May 2016. The applicant’s companion was found to be the subject of an arrest warrant, and to be in Australia unlawfully. A search of the car in which the men had been seated located the sum of $11,900 in cash, secured by a band; numerous blank and marked white credit cards; documentary records of various bank accounts including cardholder names and PINS for each; ATM receipts evidencing withdrawals and attempted withdrawals made in Helensburgh and Picton from multiple accounts held at varying financial institutions; and some smaller amounts of money, with the largest single amount being a sum of $1590 in cash. Stolen financial data was found on the white credit cards when they were later forensically examined. It was also determined that 20 of the cards seized had been used in Picton in a 63 minute period on the night of 29 May 2016 to steal $9,180 in cash, with another $570 stolen in fraudulent ATM withdrawals at Helensburgh earlier that evening. 

The applicant’s fingerprints and DNA linked to him were later found on a number of the items from the car. The applicant, when interviewed by police, denied any knowledge of the counterfeit credit cards or the cash found, and denied attending any ATM. 

The PSR that was before the District Court when the applicant was sentenced in 2018 for these 2016 offences reported that the applicant was a Bangladeshi national who came to Australia in 2008, with his family intending to pay for his tertiary education in this country. When his family in Bangladesh experienced financial strain and could no longer support his education, the applicant ceased his studies and took on various unskilled jobs. The applicant told the author of the PSR that he had been “propositioned” by his co-offender (an Indian national who was deported prior to sentence) and became involved without being aware of his offending until it had begun. His only reason for participating was the financial gain his offences gave him. He expressed regret at the loss to the victims of the offences, but “sought to minimise his responsibility” for his crimes. 

(As it turned out, rather optimistically) the author assessed the applicant as posing a low risk of re-offending. 

An ICO Assessment Report similarly observed that the applicant sought to minimise his responsibility for his crimes, although considered him to have made some positive changes by securing employment, and expressing an intention to give up what had been his acknowledged daily use of cannabis. He was regarded as suitable for an ICO.

In Canada Shehroze Chaudhry, who has portrayed himself as a former ISIS member living freely in Canada (and under the alias Abu Huzayfah appeared in the award-winning New York Times podcast Caliphate where he described conducting public executions) has been charged with faking his involvement in ISIS. 

He has been charged under section 83.231(1) of the Criminal Code; dealing with terrorism hoaxes, apparently the first in Canada's history. Chaudhry's Facebook profile has described him as Abu Huzayfa, a mujahid and jihadist. He has reportedly posting on social media and told reporters since 2016 that he was a former member of the ISIS religious police in Syria. 

Investigation by the RCMP’s Toronto Integrated National Security Enforcement Team resulted in the terrorism hoax charge, with a spokesperson stating

Hoaxes can generate fear within our communities and create the illusion there is a potential threat to Canadians, while we have determined otherwise. As a result, the RCMP takes these allegations very seriously, particularly when individuals, by their actions, cause the police to enter into investigations in which human and financial resources are invested and diverted from other ongoing priorities.

Chaudhry's activity - whether for personal gratification or profit - is analogous to the survivor fraud noted elsewhere in this blog.