ARN

Man gets 15 months for E-Trade skimming scam

With his 'salami-slicing' scam, he stole small test deposits made by online brokerages in new accounts
Fans of Mike Judge's Office Space will be familiar with salami slicing scams.

Fans of Mike Judge's Office Space will be familiar with salami slicing scams.

A California man was sentenced to 15 months in prison on Thursday after he pleaded guilty to opening tens of thousands of bogus online brokerage accounts and then pocketing the tiny test deposits made by companies like E-Trade Financial and Charles Schwab.

Michael Largent, 22, of Plumas Lake, California, had pleaded guilty to two computer fraud charges in May. He had been facing a possible five-year prison sentence.

He will also pay US$200,000 in restitution to the banks and will be restricted from using computers and the Internet for three years following his release.

According to prosecutors, Largent wrote a program that opened more than 58,000 brokerage accounts. The goal was to steal the micro-deposits made by financial institutions when they link a new account to an existing bank account.

He set up the accounts using fake names, including Hank Hill and Rusty Shackelford, taken from Fox Broadcasting's TV series "King of the Hill." "When the deposits occurred, he would transfer the funds into his own bank accounts or onto prepaid debit cards," the U.S. Department of Justice said Thursday in a press release.

Typically these deposits were between $0.01 and $2, but they added up. In total, Largent tried to make more than US$50,000 in the scam, the Department of Justice said.

Largent's arrest was widely covered on the Internet last year, where it was likened to so-called "salami-slicing" scams depicted in movies such as "Superman III" and "Office Space." Salami slicing refers to stealing large amounts of money in many small, undetectable amounts.

Come socialise with us! Facebook | LinkedIn

More about: Charles Schwab, Department of Justice, Schwab

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the ARN comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Whitepapers
Latest Stories
Community Comments
rhs_login_lockGet exclusive access to ARN's news, research and invitation only events.
ARN Distributor Directory
Find distributors by name | vendor | location
Channel Deals
/deals/avg/213_avg-internet-security-3-pc-2-year-10-pack-reta
AVG (AU/NZ) Pty Ltd

AVG Internet Security 2012 10 Pack Retail Specials

More details »
ARN Vendor Directory
Find vendors by name | category

iAsset is a channel management ecosystem that automates all major aspects of the entire sales,marketing and service process, including data tracking, integrated learning, knowledge management and product lifecycle management.