Cyber Law & Crime News

Maple Grove man sentenced for wire fraud, identity theft

A 22-year-old Maple Grove man was sentenced today in federal court to prison on one count of wire fraud and one count of aggravated identity theft in connection with a scheme to steal credit card account information and use it to add value to gift cards that he purchased.

On March 31 in Minneapolis, United States District Court Judge James Rosenbaum sentenced Zachary Wiley Mann to 60 months in prison and three years of supervised release. Mann was charged on June 16, 2008, and pleaded guilty on June 27.

According to Mann’s plea agreement, he devised a scheme to defraud and used the Internet to illegally obtain credit card account information from individuals and used that information without authorization for his own personal financial benefit from January 2008 to March 2008. Mann obtained credit card account information from thousands of victims by “hacking” into
an Internet-based order processing server, and used some of the stolen credit card numbers to add value to gift cards he purchased for small dollar amounts at restaurants. After he had used the stolen information to fraudulently inflate the value of the gift cards, he then placed ads for the cards on “Craigslist” and resold them.

Specifically, on Feb. 11, 2008, Mann, for the purpose of executing the alleged scheme, connected via the Internet to the Panera Bread Web site, and did knowingly use, without lawful authority, a means of identification (i.e. credit card account information) of another person.

According to the plea agreement, Mann committed these offenses while he was on supervised release in connection with a December 2006 federal conviction for conspiracy to commit computer fraud and aggravated identity theft in Florida.

This case was the result of an investigation by the U.S. Secret Service, the Federal Bureau of Investigation and the police departments of Maple Grove and Shakopee. It was prosecuted by Assistant U.S. Attorney Timothy C. Rank.

source: www.cybercrime.gov

OWNER AND OPERATOR OF MASSACHUSETTS COMPUTER PARTS COMPANY PLEADS GUILTY TO WIRE FRAUD AND MONEY LAUNDERING IN CONNECTION WITH $15.4 MILLION DOLLAR CISCO NETWORKING EQUIPMENT FRAUD

Defendant Made More Than 1300 Fraudulent Requests For Replacement Parts Under Cisco’s

The president of Data Resource Group, a company based in Salisbury, Mass., pleaded guilty yesterday to defrauding Cisco Systems, Inc. of computer networking equipment and engaging in money laundering by selling the fraudulently-obtained equipment to other hardware resellers, United States Attorney Joseph P. Russoniello announced.

According to the plea agreement, from approximately June 2003 to February 2007, Michael A. Daly, 55 of Danvers, Mass., engaged in a scheme to defraud Cisco. Daly repeatedly created fictitious personal and company names, obtained e-mail accounts related to those names, and used the fictitious names to rent private mailboxes around the United States. Daly then associated the fictitious names and particular Cisco parts with Cisco SMARTnet service contracts and subsequently used the fictitious names to contact Cisco and falsely claim that parts supposedly covered by the SMARTnet contracts were failed or defective and needed to be replaced. As a result, Cisco sent “replacement” parts to Daly’s private
mailboxes, where they were then forwarded to Daly’s business address in Salisbury.

Under the SMARTnet program, Cisco agreed to provide customers with technical support, including advance hardware replacement. Advance hardware replacement allows customers to obtain replacement equipment from Cisco immediately, without having first to return the broken part.

Daly also engaged in money laundering by selling the fraudulently obtained “replacement” parts to Cisco equipment resellers around the country. On a number of occasions, Daly received tens of thousands of dollars from Cisco resellers for fraudulently obtained parts. Daly generally did not return any part to Cisco and, when he did, he returned a part not covered by SMARTnet and worth little or nothing. According to a previously-filed criminal complaint, Daly carried out the fraud more than 1300 times and used private mailboxes in 39 states. On each occasion, Daly obtained equipment with a list price ranging from $995 to $25,000. Cisco estimates that the loss is approximately $15,455,695.

Daly pleaded guilty to wire fraud and money laundering and admitted to the forfeiture allegations contained in the Indictment. The sentencing of Daly is schedule for July 27 at 9:00 a.m. before Judge Ronald M. Whyte in United States District Court in San Jose.

The maximum statutory penalty for wire fraud in violation of 18 U.S.C. Section 1343 is twenty years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. The maximum penalty for money laundering in violation of 18 U.S.C. Section 1957 is ten years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute
governing the imposition of a sentence, 18 U.S.C. § 3553.

Richard C. Cheng is the Assistant United States Attorney who is prosecuting the case, with the assistance of paralegal Lauri Gomez. The guilty plea is the result of an investigation by the San Francisco Field Office of the Federal Bureau of Investigation, with the assistance of the Boston Field Office of the Federal Bureau of Investigation, the Salisbury, Mass., Police Department, and Cisco Global Business Controls.

source www.cybercrime.gov

VIRGINIA MAN PLEADS GUILTY TO SELLING COUNTERFEIT COMPUTER SOFTWARE WORTH $1 MILLION

A Virginia man pleaded guilty today to selling counterfeit computer software on eBay in violation of criminal copyright infringement laws, announced Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Jeffrey A. Taylor for the District of Columbia. According to court documents, the retail value of the software illegally sold was approximately $1 million.

Gregory William Fair, 46, of Falls Church, Va., pleaded guilty to one count of criminal copyright infringement and one count of mail fraud before Judge R.W. Roberts in U.S. District Court for the District of Columbia. According to court documents, from 2001 through February 2008, Fair admitted that he sold a large volume of counterfeit Adobe software on the eBay auction Web site using multiple user IDs. The combined retail value of this software was at least $1 million. Fair agreed to forfeit the proceeds of his unlawful enterprise including: $144,000 in currency seized from a safety deposit box and residence; one BMW 525i; one Hummer H2; one Mercedes CL600; and one 1969 Pontiac GTO.

At sentencing on July 8, 2009, Fair faces up to five years in prison on the criminal copyright infringement count and up to 20 years in prison on the mail fraud count. He also faces a maximum fine of $250,000 and three years of supervised release on each charge.

The case is part of the Department of Justice’s ongoing initiative to combat online auction piracy. Including the plea announced today, the Department has obtained 34 convictions involving online auction and commercial distribution of counterfeit software. The Department’s initiative to combat online auction piracy is just one of several steps being undertaken to address the losses caused by intellectual property theft and hold responsible those engaged in criminal copyright infringement.

The case was investigated by the U.S. Postal Inspection Service in Washington, D.C. The case is being prosecuted by Trial Attorney Marc Miller of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Glenn S. Leon for the District of Columbia.

source: http://www.cybercrime.gov