The mystery of the ATM ‘sinkhole’ that was eating lakhs

The onus to nab the culprits fell on a state police team headed by V Sugathan, now an additional superintendent in Kottayam.
Representative image
Representative image

KOCHI: In 2012, several new-generation banks in the state lost money from their ATMs, some well into the lakhs. The bank officials were stunned and could not initially fathom what had gone wrong. Later, it became clear that fraudsters were swindling money by exploiting a design flaw in the automated teller machines.

The onus to nab the culprits fell on a state police team headed by V Sugathan, now an additional superintendent in Kottayam. Cantonment Inspector S Jayakrishnan, who was then a sub-inspector with Kollam East Police and a member of the investigation team, recalled how challenging it was to track the culprits.

“They operated in full secrecy and left little evidence behind,” Jayakrishnan tells TNIE. Finally, after a month’s work, the police cracked the case. Five people were arrested from Punjab and the mystery of how they swindled the money was dispelled.

The culprits had targeted the ATMS which retrieved cash if not picked up in a minute or less. The modus operandi was simple: Withdraw Rs 10,000 from a machine and when the cash gets ejected, collect Rs 9,500 and leave a single note behind to be retrieved by the machine.

The culprits knew that once the note(s) was retrieved, the machine would register the last transaction as failed, which would subsequently see the whole amount credited back to the account. This flaw was exploited to swindle lakhs from the ATMs of various banks.

To start with, the investigation team painstakingly went through the transaction details and found the accounts from which the cash was withdrawn. It was also found out that about 300 debit cards were misused for the heist.

However, it was learned quickly enough that the bank accounts used were “drawn using documents fraudulently obtained from the public. The people who had submitted these documents had done so for other purposes,” the officer says.

One of them was used to draw up insurance with an agent but had ended up with the racket, it was learned. When the officer knocked at the doors of the insurance agent’s office, a big breakthrough was made in the case.

“The agent’s girlfriend had sold it to one of the culprits, it was learned. Following this lead, we were able to crack the case,” Jayakrishnan recalls. The police soon arrested all five members of the gang. “We had to stay for about a month in Punjab to identify and nab these culprits,” said another police officer who was part of the investigation team. During interrogation, it was also found that the gang, after flying to Kochi, had taken a cab and travelled to various places in the state to conduct the heist.

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