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CU System
Fraud forced Cardtronics to shut down 1000 ATMs
NEW YORK (5/24/10)--ATM provider Cardtronics Inc. was forced to temporarily shut down more than 1,000 ATMs owned by companies and merchants earlier this year when owners of its armored-car service were charged with fraud. Cardtronics, which owns and operates more than 28,000 ATMs in the U.S., shut down nearly 4% of its ATMs after the owners of Mount Vernon (N.Y.) Money Center Corp. were arrested Feb. 8, according to Cardtronics' filing with the Securities and Exchange Commission (ATM & Debit News May 19). Arrested were Money Center Corp. President Robert Egan, 64, and Chief Operating Officer Bernard McGarry, 50. Their company supplied cash to more than 5,300 ATMs, including those of Cardtronics. The two men were indicted for allegedly defrauding banks, other financial institutions, retailers, hospitals and universities out of $50 million. Instead of segregating cash for each of their clients, they allegedly commingled funds by taking whatever cash that arrived in the vault, regardless of its source, to fill the next day's ATMs, according to the indictment. The company had to convert the ATMs to another third-party armored-service provider, which resulted in downtime at the machines. Cardtronics estimates it lost $16.2 million from the vault. Money Center has been put into receivership.


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