Automatic Teller Machine Insider Fraud

IBM 3624 Money BoxIt happened a long time ago, an bank fraud which saw 4 people lose their jobs.

Fraud convictions also resulted.

One bloke I heard, went overseas to “wash” his reputation clean.

I’m comfortable telling the story now, because State Bank Victoria no longer exists (1990), and the fraud happened 20 years ago.

To understand the fraud, you need to understand how an Automatic Teller Machine Cash Withdrawal worked at State Bank Victoria.

  1. Customer goes to Easy Bank ATM and requests a $20 withdrawal.
  2. Request is sent from the ATM, via the IBM 4704 Financial Controller, to the IBM 3090 mainframe.
  3. The customer’s ATM card is cross-referenced to the customer bank account.
  4. $20 was withdrawn from the customers bank account.
  5. The IBM 3090 mainframe told the IBM 4704 Financial Controller that the transaction was approved.
  6. The IBM 4704 Financial Controller printed a transaction record onto continuous-feed paper.
  7. The IBM 4704 Financial Controller then told the ATM to issue the money.

The fraudsters realised that if a customer’s ATM was assigned to non-existent account (step 3), the transaction would still be approved.  So that’s what they did.  They also destroyed the transaction printout (step 6).

Yes, it was an insiders job.  I don’t think the guys made much out of it (in the $100’s), but as it involved a breach of trust, the police were called in.