This report concerns the fraudulent use of China Union Pay cards to retrieve an amount worth about 1 billion Japanese Yen (roughly $9.1 million) from ATMs in Tokyo. Four Taiwanese men were arrested with 200 cards in their possession. Based on the release, it would seem that a combination of counterfeit (forged magnetic strips) and fraudulent applications. As many readers know, issuance of EMV cards are supposed to reduce counterfeit card fraud but of course that becomes effective when the card reader is EMV capable and not using the mag stripe for transaction data.
UnionPay cards feature a magnetic strip and an IC chip that is difficult to forge. It appears that cards with forged magnetic strips were used in the ATMs in Japan. According to sources close to the investigation, three of the arrested men used forged UnionPay cards and one used cards issued under other people’s names.
In either case, the money was drawn upon bank accounts in China so one would assume that this is part of a logical sequence that originated with either stolen account information to forge cards or, as in the case of a fraud application, stolen (or socially engineered/derived) personal information. There is also a mention of some identified Chinese bank accounts set up by organized criminals to launder money outside of China to evade local authorities.
According to the sources, there are reports that some of these accounts were used for holding money acquired through fraud in China. The MPD suspects the cash was withdrawn in Japan so overseas criminal organizations could evade an investigation by Chinese authorities.
The investigation apparently was undertaken after an incident in May involving simultaneous convenience store ATM withdrawals across Japan of 1.8 billion yen from South African credit cards. Investigations are ongoing.
Overview by Steve Murphy, Director, Commercial and Enterprise Advisory Service at Mercator Advisory Group
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