Intellectual Property Law

A Tranax Mini Bank ATM is pictured above.
Photo courtesy The Passive Dad

It took a high-speed chase and some gunplay, but two men in Lincoln, Nebraska, are the first to face felony charges for using default passcodes to reprogram retail cash machines to dispense free money.

Nicholas Foster
Image: Lincoln Police Department

Jordan Eske and Nicolas Foster, both 21, are in Lancaster County Jail pending an October 1st arraignment. They're each charged with four counts of theft by deception, and one count of computer fraud, for allegedly pulling cash from privately owned ATMs at four stores in the area. The pair allegedly reprogrammed the machines to believe they were loaded with one-dollar bills instead of tens and twenties. A withdrawal of $20 would thus net $380.

Cash machine reprogramming scams first became public in 2006 when a cyber thief strolled into a gas station in Virginia Beach, Virginia, and, with no special equipment, persuaded the Tranax ATM that it had $5.00 bills in its dispensing tray, instead of $20.00 bills. Threat Level later confirmed that default administrative passcodes for ATMs manufactured by industry leaders Tranax and Triton were printed in owner's manuals easily found online. Both companies said they were surprised by the scam, but an industry association of which they are members privately spotted the capers and warned members over a year earlier.

Since then, the scam has also surfaced in Derry, Pennsylvania. But the Nebraska case marks the first reported arrests for the keypad capers.

Jordan Eske
Image: Lincoln Police Department

Eske and Foster were busted on their fourth visit to Lobo's City Mex in August. Manager Raul Omar Lobo, the owner's son, was waiting for them -- he'd been tipped off by the company that services the restaurant's Tranax ATM that someone had swiped $1,400 from the machine in three earlier midday visits.

When the two men entered, Lobo recognized them from the surveillance tapes. "So I locked the doors and told them not to move while I had one of the employees call the cops," says Lobo.

According to police, Lobo pulled a gun on the men, who nonetheless managed to wrench the door open and bolt. Lobo grabbed one of them in a headlock, and a wild shot was fired in the scuffle before the men broke free and sped away in their rented Pontiac Grand Prix.

An administrative passcode opens hidden functions on common models of retail ATMs, like this screen on the Tranax Mini Bank that sets the denomination of bills the machine thinks it's dispensing.

Lobo says he jumped in his car and gave chase, eventually getting the attention of the police, who took over the pursuit. The suspects pulled over and "ran into a building and tried going out the other side to lose the police, but we were waiting for them," says Lincoln Police Department spokeswoman Katie Flood.

Police found $10,000 in cash in the car. The defendants are suspected of stealing $13,600 in the Lincoln area, and pulling an unknown amount from ATMs in New Orleans, where they're from. Asked by police how they did it, "They said it's well-known on the internet," says Flood.

In 2006, both Tranax and Triton issued software patches for new ATMs that force operators to change the default passcodes on first use.

 See Also:

• More ATM Trouble
• ATM Reprogramming Caper Hits Pennsylvania
• ATM Cash Capers Spotted Last Year
• ATM Hack Round-Up: Report From the Field
• ATM Crime Spree Imminent?
• ATM Hack Uncovered