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Friday, September 7, 2012

ATM company execs sentenced for fraud

Four ATM company executives were sentenced to prison by a Connecticut federal judge Sept. 4, 2012. The men pled guilty to conspiracy to commit bank fraud and admitted they used their business to steal $4,805,540 from Cranston, R.I.-based Domestic Bank (now Admirals Bank). The defendants were also ordered to repay the money.

According to court documents, Connecticut-based New England Cash Dispensing Systems Inc. contracted to supply ATM services to Domestic Bank in March 2000. NECDS placed the ATM machines with retailers and maintained them. All of the machines in the network were branded with the Domestic Bank logo, but Domestic Bank only supplied cash for some machines; NECDS and merchants supplied cash to other machines in the network.

The FBI said the scheme involved tricking Domestic Bank into supplying more cash for ATMs than was needed. The fraud, which took place over several years' time, was covered up by the co-conspirators "floating" the excess money it had appropriated from Domestic Bank (much like when checking account holders write checks before funds are actually in the accounts). When the companies underwent the "periodic replenishment process," it would appear to Domestic Bank that all of its cash was appropriately accounted for, according to the FBI.

Sarlo was sentenced to 42 months in prison and four years of supervised release; John DeMilo, the General Manager, received a sentence of 22 months in prison and four years supervised release; Mizra Baig was sentenced to 51 months in prison; and Gary Vestuti received a sentence of 27 months. Some of the stolen money was used to pay NECDS business expenses but Baig admitted taking approximately $2 million for his own use. He was ordered to forfeit his house and cars. end of article

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