Posted on 11/11/2009 2:27:30 PM PST by Cindy
Note: The following text is a quote:
Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASETuesday, November 10, 2009
Alleged International Hacking Ring Caught in $9 Million Fraud Major Credit Card Processor Victimized in Elaborate Theft of Account Numbers
Sergei Tsurikov, 25, of Tallinn, Estonia; Viktor Pleshchuk, 28, of St. Petersburg, Russia; Oleg Covelin, 28, of Chisinau, Moldova; and a person known only as "Hacker 3;" have been indicted by a federal grand jury in Atlanta, Ga., on charges of hacking into a computer network operated by the Atlanta-based credit card processing company RBS WorldPay, which is part of the Royal Bank of Scotland.
Igor Grudijev, 31, Ronald Tsoi, 31, Evelin Tsoi, 20, and Mihhail Jevgenov, 33, each of Tallinn, Estonia, have also been indicted by a federal grand jury in Atlanta, Ga., for access device fraud.
The 16-count indictment charges Tsurikov, Pleshchuk, Covelin and "Hacker 3" with conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer fraud, computer fraud, access device fraud and aggravated identity theft. The indictment alleges that the group used sophisticated hacking techniques to compromise the data encryption that was used by RBS WorldPay to protect customer data on payroll debit cards. Payroll debit cards are used by various companies to pay their employees. By using a payroll debit card, employees are able to withdraw their regular salaries from an ATM.
Once the encryption on the card processing system was compromised, the hacking ring allegedly raised the account limits on compromised accounts, and then provided a network of "cashers" with 44 counterfeit payroll debit cards, which were used to withdraw more than $9 million from more than 2,100 ATMs in at least 280 cities worldwide, including cities in the United States, Russia, Ukraine, Estonia, Italy, Hong Kong, Japan and Canada. The $9 million loss occurred within a span of less than 12 hours.
The hackers then allegedly sought to destroy data stored on the card processing network in order to conceal their hacking activity. The indictment alleges that the "cashers" were allowed to keep 30 to 50 percent of the stolen funds, but transmitted the bulk of those funds back to Tsurikov, Pleshchuk and other co-defendants . Upon discovering the unauthorized activity, RBS WorldPay immediately reported the breach.
International cooperation was a significant factor in the resolution of this case. In a joint investigation with U.S. law enforcement authorities, Estonian Central Criminal Police apprehended Tsurikov, Ronald Tsoi, Evelin Tsoi and Jevgenov in Estonia earlier this year. Each is facing related charges in Estonia. Tsurikov is also in custody in Estonia and is pending extradition to the United States. Federal prosecution of the Estonian defendants has been closely coordinated with the Estonian Office of the Prosecutor General. Furthermore, cooperation between the Hong Kong Police Force and the FBI also led to a parallel investigation in Hong Kong, resulting in the identification and arrest of two individuals who were responsible for withdrawing RBS WorldPay funds from ATMs there. The Netherlands Police Agency National Crime Squad High Tech Crime Unit and the Netherlands National Public Prosecutors Office also provided significant assistance.
Tsurikov, Pleshchuk, Covelin and "Hacker 3" each face a maximum sentence of up to 20 years in prison for conspiracy to commit wire fraud and each wire fraud count; up to five years in prison for conspiracy to commit computer fraud; up to five or 10 years in prison for each count of computer fraud; a two-year mandatory minimum sentence for aggravated identity theft; and fines up to $3.5 million dollars. The charges against Grudijev, the Tsois and Jevgenov carry a maximum of up to 15 years in prison for each count and a fine of up to $250,000. The indictment also seeks criminal forfeiture of $9.4 million from the defendants.
"The charges brought against this highly sophisticated international hacking ring were possible only because of unprecedented international cooperation with our law enforcement partners, particularly between the United States and Estonia. Through our close cooperation, both nations have demonstrated our commitment to identifying sophisticated attacks on U.S. financial networks that are directed and operated from overseas and our commitment to bringing the perpetrators to justice," said Assistant Attorney General of the Criminal Division Lanny A. Breuer.
"Last November, in just one day, an American credit card processor was hacked in perhaps the most sophisticated and organized computer fraud attack ever conducted. Today, almost exactly one year later, the leaders of this attack have been charged. This investigation has broken the back of one of the most sophisticated computer hacking rings in the world. This success would not have been possible without the efforts of the victim, and unprecedented cooperation from various law enforcement agencies worldwide," said Acting U.S. Attorney Sally Quillian Yates of the Northern District of Georgia.
"Through the diligent efforts of the victim company and multiple law enforcement agencies within the United States and around the world, the leaders of a technically advanced computer hacking group were identified and indicted in Atlanta, sending a clear message to cyber-criminals across the globe, said FBI Atlanta Field Office Special Agent-in-Charge Greg Jones. "Justice will not stop at international borders, but continue with the on-going cooperation between the FBI and other agencies such as the Estonian Central Criminal Police and the Netherlands Police Agency."
This case is being prosecuted by Assistant U.S. Attorneys Lawrence R. Sommerfeld and Gerald Sachs of the U.S. Attorneys Office for the Northern District of Georgia and by Senior Counsel Kimberly Kiefer Peretti of the Criminal Divisions Computer Crime and Intellectual Property Section. Treaty assistance was provided by the Criminal Divisions Office of International Affairs counsels Betsy Burke, Blair Berman, Roman Chaban, Judith Friedman, Deborah Gaynus, Linda McKinney and Mary McLaren.
This case is being investigated by the FBI. Assistance was provided by international law enforcement partners. The U.S. Secret Service also participated in the investigation. RBS World Pay immediately reported the crime and has assisted in the investigation.
I saw some TV “news” report that said these hackers in Russia are largely left alone to do their dirty work, and are considered heroes by some because they attack people and companies in the U.S.
Too bad the hackers didn’t just figure out a way to charge 29.9% on those accounts. Of course, they’d have to hang around for a while.
Gangsters from the former Soviet Union have established a strong and abiding presence in the New York/New Jersey/Pennsylvania region, engaging in a wide array of crimes that range from sophisticated financial frauds to narcotics trafficking to murder.
Evidence also shows that members of disparate Russian-emigre crime groups here have the potential to develop into one of the most formidable organized crime challenges to law enforcement since the advent of La Cosa Nostra.
These are among the key findings of the Tri-State JointSoviet-Emigre Organized Crime Project, a cooperative research andinvestigative effort launched four years ago by four agencies in New York, New Jersey and Pennsylvania - the New York Organized Crime Task Force, the New York State Commission of Investigation,the New Jersey State Commission of Investigation and the Pennsylvania Crime Commission.
Investigative agents and staff from these agencies conducted the project in conjunction with criminal justice experts from Rutgers University. The Project's report presents the first comprehensive publicassessment of the threat posed to this region by criminal elements emanating from within the former Soviet Union.
The report catalogues the history and growth of Russian-emigre crime networks, from their core base in the Brighton Beachsection of Brooklyn to their current reach well beyond the New York metropolitan area into the counties of central New Jersey and the suburbs of Philadelphia.
One of the most troubling aspects is evidence of links between individuals here and criminal elements in the former Soviet Union, a phenomenon that lends a disturbing and complex international dimension to this emerging domestic law enforcement problem.The range of criminal and illicit activities linked to these groups is impressive.
The Project report details Russian-emigre involvement in a variety of highly sophisticated frauds and confidence schemes, financial crimes, including money laundering, counterfeiting and securities fraud, narcotics trafficking and an assortment of vice crimes.Russian-emigre criminals are no strangers to violence either.
THE NATURE OF RUSSIAN-EMIGRE CRIME
Crimes of Deception
Motor Fuel Tax Fraud
Insurance and Entitlement Fraud
Confidence Schemes
Counterfeiting
Violent Crimes
Homicide/Attempted Homicide
Extortion and Kidnapping
Drug Trafficking
Money Laundering
Vice Crimes (Regpay, a Florida credit card processing company operated by Byelorussians, was nailed for processing online child porn payments; Minx, Belarus, once a constituent republic of the Soviet Union (independent since 1991) is the country of origin of many of these predators now thieving on US soil.
--SNIP--PDF LONG READ http://64.233.167.104/search?q=cache:Ahm0dOHcKHEJ:www.state.nj.us/sci/pdf/russian.pdf
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IT'S ON THE HOUSE; MORTGAGE CONS GOT ATL. CITY FREE RIDE (27-member massive mortgage swindle)
NY POST, BRUCE GOLDING
Garri Zhigun and his cohorts were treated like kings in Atlantic City casinos, including the Borgata. The ringleaders of a massive mortgage scam got comped as high rollers in Atlantic City by gambling with more than $400,000 in cash that they swindled from slipshod subprime lenders tied to the current financial crisis, The Post has learned.
Garri Zhigun, 31, and Aleksander "Shorty" Lipkin, 30, used their ill-gotten gains to score free rooms, drinks, meals and show tickets at the Tropicana and Borgata casinos, a law-enforcement source said.
The Brooklyn men took 29 trips to the plush gambling dens in 2005 and 2006, playing with cash conned from lenders like Countrywide and Washington Mutual - whose now-worthless subprime mortgages were a key cause of the stock-market meltdown.
An investigation of casino records revealed that Zhigun bought a total of $434,850 in chips and cashed out only $135,000, the source said. Zhigun apparently shared the chips with Lipkin, according to the source. Zhigun's dice habit "can evidently be construed as a severe addiction," according to government records reviewed by The Post.
Both men also have a taste for drinking and driving, with Zhigun getting arrested for DWI twice and Lipkin once - while doing 90 mph in a Bentley on the Staten Island Expressway in July.
At the time of their betting binge, Zhigun was on supervised release after serving two years' prison for faking injury records in a long-running insurance scam involving staged car accidents that the feds broke up in 2001.
After getting sprung, Zhigun told probation officials that he was making only $400 a week as a "real-estate development researcher." But in reality, he was helping Lipkin run a crooked loan operation out of a Brooklyn-based brokerage owned by Zhigun's mom, Galina Zhigun.
According to the feds, a 27-member Russian crime ring used the brokerage, AGA Capital NY Inc., as a mortgage "boiler room" where loan brokers, processors, appraisers and others conspired to file fraudulent applications for more than 1,000 mortgages and home-equity loans worth $200 million. The ring netted at least $4 million in loan commissions alone, plus illegal profits estimated in the tens of millions.
Lipkin and Zhigun both pleaded guilty in the mortgage scam and are awaiting sentencing, but Zhigun last week began serving a seven-month stretch for violating the terms of his release in the earlier insurance fraud.
SOURCE http://www.nypost.com/seven/10202008/news/regionalnews/its_on_the_house_134417.htm
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RUSSIAN JAILED IN ID-THEFT SCAM VS. RICH AMERICANS (Bush campaign donor did scam online)
By LAURA ITALIANO, NY POST
A young Russian con man was sentenced to at least 3½ years in prison yesterday for a daring identity-theft scam that rooked wealthy Americans out of $1.5 million, and nearly cost a major backer of President Bush $7 million. Operating online from Moscow, Igor Klopov, 24, found many of his targets through the Forbes 400 list. He would target those from states like Texas and California, where property-deed information is available through the Internet.
He would then use that and other online or forged information to impersonate his marks, and plunder their accounts. His scams included assembling a complete identity dossier, with driver's licenses, birth certificates, utility bills, blank checks and brokerage statements. Klopov was foiled by Manhattan prosecutors as he tried to score his biggest payday - $7 million - from of the home-equity credit account of Texas billionaire Charles Wyly Jr., who donated $2 million to Bush in 2000.
Posing as Wyly, Klopov called the billionaire's bank and asked that a new home-equity line checkbook be sent to the home of an accomplice, who then tried to write a $7 million check to a Westchester gold dealer. Klopov was busted in May after coming to New York to claim the gold. "I can assure you I will change my personality," Klopov told Manhattan Supreme Court Justice Gregory Carro, who answered, "I hope you're sincere about that." laura.italiano@nypost.com http://www.nypost.com/seven/11202008/news/worldnews/russian_jailed_in_id_theft_scam_vs__rich_139658.htm
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86 indicted in Russian mob accident scam
Brooklyn, N.Y. ---- 1/7/05 --- Law-enforcement officials have smashed a multimillion-dollar car-insurance fraud ring on Long Island involving bogus medical claims and crooked lawyers. An eight-month probe, conducted by the Suffolk County District Attorney's Office and the state Insurance Department, has produced 86 indictments and 400 felony counts against medical clinics, doctors and lawyers believed to have ties to Russian crime families in Brooklyn, Queens and Long Island, authorities said.
http://64.233.161.104/search?q=cache:B2BNkKbdMPUJ:www.insurancefraud.org/newsarchives/news_august2003.htm
Some of them pretend they are Orthodox Jews (to make Jews look bad) which gets them even MORE benefits under the federal "disadvantaged minority" designation (a select few). The PBS web site has this story.
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