Cyber Law & Crime News

An Indian national was sentenced today to 81 months in prison on conspiracy and aggravated identity theft charges arising from an international fraud scheme to “hack” into online brokerage accounts in the United States and use those accounts to manipulate stock prices, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Deborah Gilg of the District of Nebraska.

Jaisankar Marimuthu, 36, a native of Chennai, India, was also ordered to pay $2.4 million in restitution. Marimuthu pleaded guilty on Feb. 5, 2010, to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft, and to one count of aggravated identity theft before U.S. District Magistrate Judge F.A. Gossett III in Omaha, Neb. Marimuthu, who was extradited to the United States following his arrest in Hong Kong, was sentenced today before U.S. District Judge Laurie Smith Camp.

According to court documents, Marimuthu was part of a conspiracy that operated out of Thailand and India from February 2006 through December 2006 in which the prices of thinly-traded securities were fraudulently inflated by hacking into brokerage accounts in the United States and then illegally using the accounts to make large, unauthorized purchases of securities in the name of the unsuspecting customers. Marimuthu admitted that after the price of the securities had been artificially increased or “pumped up” through the bogus trading, the conspirators’ own holdings of the securities would be sold at a profit. More than 90 customers and seven brokerage firms in the United States have been identified as victims. Financial losses of close to $2.5 million were sustained by the victims in this case.

Co-defendant Thirugnanam Ramanathan, 37, pleaded guilty on June 2, 2008, to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft. Following his arrest in Hong Kong, Ramanathan was extradited on May 25, 2007, to the United States. Ramanathan was sentenced to two years in prison by Judge Camp, and has since been returned to India following completion of his sentence. Co-defendant Chockalingham Ramanathan, 36, was charged with one count of conspiracy, eight counts of computer fraud, six counts of wire fraud, two counts of securities fraud and six counts of aggravated identity theft. Chockalingham Ramanathan remains at large.

This case was prosecuted by Trial Attorney Richard D. Green of the Criminal Division’s Computer Crime and Intellectual Property Section; Trial Attorneys Jack Patrick and Ryan Faulconer of the Criminal Division’s Fraud Section; and Assistant U.S. Attorney Michael Norris of the District of Nebraska. This case was investigated by the FBI in Omaha

source: cybercrime.gov

PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that ALEKSEY VOLYNSKIY was sentenced yesterday to 37 months in prison for hacking into victims’ brokerage accounts at Charles Schwab, laundering over $246,000, and sending a portion back to coconspirators in Russia. VOLYNSKIY also sold approximately 180 stolen credit card numbers to a cooperating witness and directed that they be fabricated into credit cards. United States
District Judge DENNY CHIN, who imposed the sentence in Manhattan federal court, also ordered VOLYNSKIY to pay restitution in the amount of $30,000 and imposed an order of forfeiture in the same amount.

According to the Indictment and other documents filed in the case, and statements made during the guilty plea and sentencing proceedings:
From approximately September 2006 through December 2007, VOLYNSKIY and co-defendant ALEXANDER BOBNEV participated in a scheme to steal funds from bank and brokerage accounts by hacking into those accounts through the internet, using personal financial information obtained through computer viruses, and then laundering the stolen proceeds.

To carry out this scheme, BOBNEV and co-conspirators in Russia used concealed computer codes known as “Trojan Horses” to hack into the personal computers of multiple victims in the United States. These Trojan Horses were designed to steal personal account information from individual victims as they accessed their bank and brokerage accounts through the internet.

After the Trojan Horses captured the victims’ personal account information, BOBNEV and other co-conspirators used the information to access victims’ bank and brokerage accounts, and thereafter made unauthorized sales of securities and unauthorized wire transfers out of these accounts.

VOLYNSKIY, along with co-conspirators residing in the United States, then set up various “drop” accounts to receive the funds stolen from their victims’ bank and brokerage accounts. VOLYNSKIY and his co-conspirators then sent a portion of the stolen funds from the various “drop” accounts in the United States to co-conspirators in Russia, through money remitting services, keeping a portion of the fraud proceeds for themselves.

In addition to the scheme to hack into victims’ brokerage accounts, from September 2006 through December 2007, VOLYNSKIY participated in a scheme to steal funds from bank accounts by withdrawing money from those accounts at ATMs, using stolen credit card numbers. On three separate occasions, VOLYNSKIY provided a total of 180 stolen credit card numbers to a cooperating witness, directing that they be fabricated into credit cards.

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VOLYNSKIY was arrested on December 4, 2008, and pleaded guilty on August 4, 2009, to five counts, including conspiracy to commit wire fraud and unlawfully access and damage a protected computer, money laundering, and access device fraud.

On November 9, 2009, United States District Judge PAUL G. GARDEPHE sentenced MINEEV, another individual residing in the United States who conspired with BOBNEV to hack into brokerage accounts and launder the proceeds, to 18 months in prison. BOBNEV remains at large.

Mr. BHARARA praised the investigative work of the FBI. This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant United States Attorney SEETHA RAMACHANDRAN is in charge of this prosecution.

LOS ANGELES – A Chicago-area man was sentenced this afternoon to 30 months in federal prison for taking nude videos of television personality Erin Andrews and posting the videos on the Internet after being rebuffed when he offered the videos for sale to a celebrity website.

Michael David Barrett, 49, of Westmont, Illinois, was sentenced by United States District Judge Manuel L. Real, who also ordered the defendant to pay $7,366 in restitution to Ms. Andrews.

During the sentencing hearing, Judge Real noted that, as a result of Barrett’s conduct, Ms. Andrews will suffer for the rest of her life. Barrett pleaded guilty December 15 to a federal charge of interstate stalking with the intent to harass and to cause substantial emotional distress. Barrett admitted that he stalked ESPN reporter Erin Andrews over an 18-month period. Barrett’s conduct included tracking Ms. Andrews to at least three different hotel rooms in three states in 2008. Barrett made the videos after removing the peephole device from the door in one of the hotel rooms and using his mobile phone to capture video of Ms. Andrews while she was naked.

In January 2009, TMZ.com was offered the opportunity to purchase the nude videos via email messages, an offer that the celebrity website immediately declined. Barrett subsequently posted 10 of the videos on the Internet, identifying Ms. Andrews as the victim.

During today’s sentencing hearing, Ms. Andrews told the court of the fear, anxiety and public humiliation that she suffers as a result of having been stalked. “I’m being victimized every day…and I did nothing to deserve it,” Ms. Andrews said, adding the videos will likely always be on the Internet.

In court papers filed in support of their request for a prison sentence in this case, prosecutors told the court that Barrett posted on the Internet another 32 videos that depicted another 16 as-yet-unidentified victims.

The case against Barrett was investigated by the Federal Bureau of Investigation’s Los Angeles Field Office, which received assistance from the FBI’s Chicago Field Office.

source: www.cybercrime.gov

A father and son have pleaded guilty to selling $1 million worth of counterfeit computer software through the Internet, in violation of criminal copyright infringement laws, Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and John Morton, Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement announced today. The guilty pleas are part of the Department of Justice’s initiative to combat online piracy.

Robert D. Cook, 56, and his son, Todd A. Cook, 23, both of Wichita Falls, Texas, pleaded guilty late yesterday to criminal copyright infringement and conspiracy to commit criminal copyright infringement before U.S. District Court Judge T.S. Ellis III, in Alexandria, Va. According to court documents, from July 2006 through May 2008, the Cooks operated several Web sites that sold large volumes of counterfeit software with a combined retail value of approximately $1 million.

The defendants admitted that they used these Web sites to sell downloadable counterfeit software without authorization from the copyright owners. The defendants also admitted that they promoted their illicit scheme by purchasing advertising for their Web sites from major Internet search engines.

Both defendants face up to five years in prison, a fine of $250,000 and three years of supervised release. Sentencing has been scheduled for June 18, 2010.

The convictions of Robert and Todd Cook are the latest in an investigation out of Wichita Falls, in which four other men have been convicted for operating Web sites engaged in the sale of pirated software. Thomas C. Rushing III, William Lance Partridge and Brian C. Rue all pleaded guilty to criminal copyright infringement in U.S. District Court in Austin, Texas, on Aug. 22, 2008. Timothy K. Dunaway pleaded guilty to criminal copyright infringement on Oct. 20, 2008, in U.S. District Court in Wichita Falls. Combined, the counterfeit software sold by these individuals had a retail value of more than $10 million.

This case is part of the Department of Justice’s ongoing initiative to combat online auction piracy.

Including the guilty pleas announced today, the Department has obtained 46 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.

source: cybercrime.gov

Four Indicted in $25 Million Scheme Defrauding and Hacking Ticketmaster, Tickets.com, and Other Ticket Vendors

Three men who used fraud, deceit, and computer hacking to make more than $25 million by acquiring and reselling more than 1.5 million of the most coveted tickets to concerts, sporting events, and live entertainment throughout the United States surrendered to federal authorities this morning after being charged in an Indictment, U.S. Attorney Paul J. Fishman announced.

The 43-count Indictment describes a scheme in which the defendants and their company, Wiseguy Tickets, Inc. (“Wiseguys”), targeted Ticketmaster, Tickets.com, MLB.com, MusicToday, and other online ticket vendors. According to the Indictment, which was returned by a federal grand jury on Feb. 23 and unsealed this morning, the defendants are alleged to have fraudulently obtained prime tickets to performances by, among others, Bruce Springsteen, Hannah Montana, Bon Jovi, Barbara Streisand, Billy Joel, and Kenny Chesney.
The criminal scheme also targeted tickets to live theater, including productions of Wicked and The Producers; sporting events, including the 2006 Rose Bowl and 2007 Major League Baseball playoff games at Yankee Stadium; and special events, including tapings of the television show Dancing with the Stars. The events took place in Newark and East Rutherford, New Jersey, and across the United States, including in New York City, Anaheim, Chicago, Houston, Los Angeles, Omaha, Philadelphia, Pittsburgh and Tampa, according to the Indictment.

The Indictment charges Kenneth Lowson, 40, Kristofer Kirsch, 37, and Faisal Nahdi, 36, all of Los Angeles, and Joel Stevenson, 37, of Alameda, with conspiracy to commit wire fraud and to gain unauthorized access and exceed authorized access to computer systems. The indictment also charges 42 additional counts of wire fraud; gaining unauthorized access and exceeding authorized access to computer systems; or causing damage to computers in interstate commerce.

Defendants Lowson, Kirsch and Stevenson surrendered this morning at FBI headquarters in
Newark and are expected to appear before U.S. Magistrate Judge Michael Shipp at 2:00 p.m. in Newark. Defendant Nahdi, who is not currently in the United States, is expected to surrender to authorities in the coming weeks. All of the defendants will be arraigned in the coming weeks before the United States District Court Judge Katharine S. Hayden, to whom the case has been assigned.

“At a time when the Internet has brought convenience and fairness to the ticket marketplace,
these defendants gamed the system with a sophisticated fraud operation that generated over $25 million in illicit profits.” said U.S. Attorney Fishman. “Today’s indictment represents a
significant step forward in the fight against those who use fraud to disrupt E-Commerce and evade computer security.”

“The allegations in this indictment represent a scheme orchestrated through technology to cheat the public and circumvent fair business practices in the entertainment industry,” said Edward Kahrer, FBI Assistant Special Agent In Charge and head of its corruption program in the Newark Division. “Unfortunately for the defendants, they are the FBI’s first example of what happens to criminals when we combine the talent and resources in our white collar and cybercrime programs. As technology and the world move forward, the FBI will endeavor to remain one step ahead.”

According to the Indictment, Lowson, Kirsch, Stevenson, and Nahdi used Wiseguys to obtain
and resell millions of dollars worth of premium tickets to the most sought after concerts, shows, and sporting events. Wiseguys typically sold the event tickets that it obtained to ticket brokers, who in turn sold the tickets to the general public at significantly higher prices. Wiseguys profited by charging its customers, the ticket brokers, a percentage mark-up over the face value of the tickets it fraudulently obtained and re-sold.

Technological Steps to Ensure Fair Access to Tickets The Indictment alleges that ticket vendors were unwilling to sell tickets in large quantities for commercial resale to entities such as Wiseguys or brokers. To ensure fair access to tickets, Online Ticket Vendors restricted access to their ticket purchasing system to individual users, as opposed to computer programs that purchased tickets automatically, and restricted the number of tickets that an individual customer could purchase. To enforce these restrictions, Online Ticket Vendors used computer software that was designed to detect and prevent automated programs from accessing the Online Ticket Vendors’ computers.

These protecting technologies included CAPTCHA, a computer program that requires would-be ticket purchasers to read distorted images of letters, numbers, and characters that appear on their computer screens and to retype those images manually before tickets can be purchased. “CAPTCHA Challenges,” such as the one below, are programmed so that the images are recognizable to the human eye but confusing to computers.

According to the Indictment, other technologies the Online Ticket Vendors used to protect their computers include audio CAPTCHA Challenges, which are offered to ensure fair access to visually impaired customers who cannot see and respond to visual CAPTCHA Challenges; sending complex math problems to computers that were in the process of purchasing tickets (to slow down computers attempting to purchase multiple blocks of event tickets); and blocking the Internet Protocol addresses (“IP Addresses”) of computers that appeared to be using automated programs to access and attack the Online Ticket Vendors’ websites. Sidestepping the Computer Defenses To defeat the Online Ticket Vendors’ technologies, the defendants worked with computer programmers in Bulgaria to establish a nationwide network of computers that impersonated individual visitors to the Online Ticket Vendors’ websites, the Indictment alleges. The network – described as the “CAPTCHA Bots” in the Indictment – gave Wiseguys the ability to flood the Online Ticket Vendors’ computers at the exact moment that event tickets went on sale. The CAPTCHA Bots also automated and sped up the purchase process by completing both CAPTCHA Challenges and audio CAPTCHA Challenges automatically – faster than any human could accomplish the same task. The defendants thus gained a significant advantage over the general public in having access to the best seats to the most desirable events, according to the Indictment.

“The public thought it had a fair shot at getting tickets to these events, but what the public didn’t know was that the defendants had cheated them out of that opportunity,” said U.S. Attorney Fishman.

Allegedly, the defendants also used aliases, shell corporations, and fraudulent misrepresentations, both to deploy the CAPTCHA Bots and to disguise their ticket-purchasing activities. At various times the defendants, and others working at their direction, misrepresented Wiseguys’ activities to Online Ticket Vendors; to the companies that leased Internet access to Wiseguys for use of the CAPTCHA Bots; to the landlords that rented Wiseguys’ office space; and, in certain instances, to lower level employees at Wiseguys.
To further disguise their activities, defendants also created and managed hundreds of fake Internet domains (e.g., stupidcellphone.com) and thousands of e-mail addresses to receive event tickets from Online Ticket Vendors. The defendants also directed the development and
deployment of technologies to secretly obtain CAPTCHA and audio CAPTCHA Challenges that could be used to buy event tickets for resale.

According to the Indictment, the defendants were aware that the CAPTCHA Bots made it nearly impossible for the average consumer to have a chance to buy the best seats to the most popular events. For example, for a single July 2008 concert featuring Bruce Springsteen and the E Street Band at Giants Stadium, Wiseguys was able to purchase and control nearly half of the 440 General Admission floor tickets made available to the public for that concert – the tickets closest to the stage. In internal company reports, Wiseguys employees described their success at buying tickets as “straight domination,” having bought the “best ringsides by far,” and, for a January 2009 NFL playoff game at Giants Stadium between the Philadelphia Eagles and the New York Giants, having “pigged out” on tickets.

Defendants Lowson and Kirsch, according to the Indictment, owned Wiseguys and directed all of its operations; defendant Stevenson was the company’s chief U.S.-based programmer,
programmed aspects of the CAPTCHA Bots, and supervised Bulgarian computer programmers; defendant Nahdi managed Wiseguys’ operations and finances and at one point took ownership of a Wiseguys’ entity named Seats of San Francisco.

If convicted, each defendant faces a maximum statutory penalty of 5 years in prison on the
conspiracy charge and a maximum statutory penalty of 20 years in prison on each wire fraud
charge. In addition, defendants Lowson, Kirsch, and Stevenson face statutory maximum penalties of 5 years’ imprisonment and a $250,000 fine on each of 19 counts charging gaining unauthorized access and exceeding authorized access to computers; and 10 years’ imprisonment for each of six counts charging damage to computers in interstate commerce. In addition, each defendant faces a fine of $250,000 per count of conviction.

In determining an actual sentence, the Judge Hayden would, upon a conviction, consult the
Advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a
sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Despite indictment, all defendants are presumed innocent unless proven guilty beyond a
reasonable doubt. Fishman credited the Special Agents of the FBI, under the direction of Acting Special Agent in Charge Kevin B. Cruise in Newark, and Special Agents of the United States Postal Inspection Service, under the direction of Inspector in Charge David L. Collins in Newark, with the investigation.

The government is represented by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto in the U.S. Attorney’s Office Computer Hacking and Intellectual Property group, within the Commercial Crimes Unit.

source: cybercrime.gov

New Jersey Man Pleads Guilty to Unauthorized Recording of Newly Released Motion Pictures in Movie Theater

Keshawn Deron Wilson of Asbury Park, N.J., pleaded guilty today in Tampa, Fla., to federal
charges of using a video camera to record then newly-released motion pictures in a New Jersey theater, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Middle District of Florida A. Brian Albritton.

Keshawn Wilson, 25, pleaded guilty before U.S. Magistrate Judge Thomas B. McCoun III to two counts of unauthorized recording of motion pictures in a motion picture exhibition facility.
According to information presented in court, Wilson was arrested on Sept. 13, 2008, by Ocean Township, N.J., police officers, while he was in the process of recording Picturehouse
Entertainment’s then newly-released motion picture “The Women” at the Middlebrook Galleria 10 Clearview Cinemas in Ocean, N.J. At the time he was arrested, officers seized a high definition video camera with a 30 gigabyte hard drive from Wilson. A subsequent search of the camera’s hard drive revealed a copy of the then newly-released movie “The Women” and a copy of Universal Studios’ then newly-released movie “Burn After Reading,” which Wilson admitted he recorded the previous day at the same theater.

Wilson faces a maximum sentence of six years in prison, a $500,000 fine, two years of
supervised release following the prison term and an order of restitution. A sentencing date has not yet been set by the court.

The case is being prosecuted by Assistant U.S. Attorneys Donald Hansen of the Middle District of Florida and Seth Kosto of the District of New Jersey, as well as Assistant Deputy Chief for Litigation Clement McGovern of the Computer Crime and Intellectual Property Section. This case was investigated by the FBI. The Motion Picture Association of America, an industry trade group that represents major producers and distributors of entertainment, including motion picture studios, provided assistance in this case.

source: cybercrime.gov

Justice Department Announces New Intellectual Property Task Force as Part of Broad IP Enforcement Initiative

Attorney General Eric Holder today announced the formation of a new Department of Justice Task Force on Intellectual Property as part of a Department-wide initiative to confront the growing number of domestic and international intellectual property (IP) crimes.

“The rise in intellectual property crime in the United States and abroad threatens not only our public safety but also our economic wellbeing. The Department of Justice must confront this threat with a strong and coordinated response,” said Attorney General Holder. “This Task Force will allow us to identify and implement a multi-faceted strategy with our federal, state and international partners to effectively combat this type of crime.”

The Attorney General’s announcement follows a summit meeting convened last December by Vice President Biden, a long-standing champion of U.S. intellectual property rights-holders. At that meeting, which was attended by Attorney General Holder and other cabinet heads, the Vice President discussed the importance of stronger enforcement and supported actions to raise the priority of combating IP theft and improving coordination — including the establishment of an intellectual property task force at the Department of Justice.

“Theft of intellectual property does significant harm to our economy and endangers the health and safety of our citizens,” said Vice President Biden. “This administration is committed to stronger and stricter enforcement of intellectual property rights, and this new task force is a step in the right direction.”

The Task Force, to be chaired by the Deputy Attorney General, will focus on strengthening efforts to combat intellectual property crimes through close coordination with state and local law enforcement partners as well as international counterparts. It will also monitor and coordinate overall intellectual property enforcement efforts at the Department, with an increased focus on the international aspects of IP enforcement, including the links between IP crime and international organized crime. Building on previous efforts in the Department to target intellectual property crimes, the Task Force will also serve as an engine of policy development to address the evolving technological and legal landscape of this area of law enforcement.

As part of its mission, the Task Force will work closely with the recently established Office of the Intellectual Property Enforcement Coordinator (IPEC), housed in the Executive Office of the President and charged with drafting an Administration-wide strategic plan on intellectual property. As part of its mission, the Task Force will assist IPEC in recommending improvements to intellectual property enforcement efforts.

“Americans produce more technologies, more brands, more creative works and more innovation than any other nation on Earth,” said Victoria Espinel, the U.S. intellectual property enforcement coordinator. “President Obama is committed to ensuring that the value created by American workers and enjoyed by communities around the world is protected. The Justice Department’s new task force will play a critical role in supporting the Administration’s ongoing efforts to protect American intellectual property and the millions of jobs that depend on it.”

The Task Force will include representatives from the offices of the Attorney General, the Deputy Attorney General, and the Associate Attorney General; the Criminal Division; the Civil Division; the Antitrust Division; the Office of Legal Policy; the Office of Justice Programs; the Attorney General’s Advisory Committee; the Executive Office for U.S. Attorneys and the FBI. As part of its broader intellectual property initiative, the Department will also step up policy engagement with foreign law enforcement partners, develop a plan to expand civil IP enforcement efforts, and leverage existing partnerships with federal agencies and independent regulatory authorities such as the Department of Homeland Security and the Federal Communications Commission.

Kingdom of Sweden accepts request for transfer of prosecution in case involving Swedish National charged with Hacking and Trade Secret Theft – Intrusions Involved Computers at NASA and Cisco, Theft of Trade Secret Source Code

The Kingdom of Sweden accepted the request to transfer the prosecution of Philip Gabriel Pettersson, aka “Stakkato,” United States Attorney Joseph P. Russoniello announced.

On May 5, 2009, Pettersson, a Swedish national, was indicted on five counts involving intrusion and trade secret theft charges. The indictment included one intrusion count and two trade secret misappropriation counts involving Cisco Systems, Inc. (Cisco), of San Jose, Calif., a leading provider of computer network equipment and a leading producer of internet routers. According to the indictment, between May 12, 2004, and May 13, 2004, defendant Pettersson intentionally committed an intrusion into the computer system and network of Cisco. During the intrusion, some Cisco Internetworking Operating System (Cisco IOS) code was misappropriated. Following the incident, Cisco reported that it did not believe that any customer information, partner information or financial systems were affected.

The indictment also included two intrusion counts involving the National Aeronautics and Space Administration, including computers at the Ames Research Center, and the NASA Advanced Supercomputing Division, located at Moffett Field, Calif. These intrusions by Pettersson occurred in May 19, 2004, May 20, 2004, and October 22, 2004.

United States Attorney Joseph P. Russoniello commended the involvement of the numerous investigative agencies that were involved in the extensive investigation since the original hacking incidents in 2004. The evidence eventually led to Sweden. He added that this case shows how the international law enforcement community will work together to identify individuals committing hacking and trade secret offenses regardless of where they are located. According to the Department of Justice, this is one of the few computer crime cases in which a transfer has been accepted in recent years.

“This was a significant intrusion and theft of trade secret case in our district that involved international law enforcement issues,” United States Attorney Russoniello said. “Now that the Kingdom of Sweden has accepted the transfer, we thank our law enforcement partners in Sweden for accepting our request to transfer prosecution of this case. We look forward to continuing to cooperate with Swedish authorities as the case progresses and on any case needs.”

Cisco and NASA cooperated in the government’s investigation.

The maximum statutory penalty for committing an intrusion (intentionally causing damage to a protected computer), in violation of Title 18, United States Code, Section 1030(a)(5)(A)(i), and theft of trade secrets, in violation of Title 18, United States Code, Section 1832(a)(2), is ten years in prison, a three year term of supervised release, and a fine of $250,000. 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, and factors such as the amount of the loss.

The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation, U.S. Secret Service, NASA Office of Inspector General, Office of Investigations, Computer Crimes Division, and numerous other federal agencies. Mark L. Krotoski, presently at the Computer Crime and Intellectual Property Section, is prosecuting the case with the assistance of Paralegal Lauri Gomez and Assistant Netterie Lewis. CCIPS Senior Counsel Kimberly Peretti also assisted in the prosecution. Trial Attorneys Sarah C. Santiago and Lynn C. Holliday, from the Office of International Affairs, Criminal Division, have assisted on international issues with the case.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Pettersson must be presumed innocent unless and until proven guilty.

source: www.cybercrime.gov

United States Attorney Karen P. Hewitt announced that Jeffrey Steven Girandola and Kajohn Phommavong have been charged in a previously sealed 16-count indictment handed up by a federal grand jury on November 20, 2009, with Conspiracy, Computer Fraud, Access Device Fraud and Aggravated Identity Theft. The indictment was unsealed upon the initial appearance of Mr. Phommavong today before United States Magistrate Judge Nita L. Stormes, in federal court in San Diego. Mr. Girandola is presently in custody in San Diego County on other charges.

According to the indictment, the defendants installed peer-to-peer file sharing software on computers under their control and searched the available peer-to-peer file sharing networks for account login information and passwords inadvertently exposed to the file sharing network by other users of the peer-to-peer file sharing software. Peer-to-peer or “P2P” software programs, the indictment explains, allow users to share files and other data with other users of that software. Most P2P software is free and available to download to anyone with a computer and an Internet connection. After installation, the user can search all files made available

for sharing by any other users of that program and download files of interest. Users can place files that the user wants to share into a folder on the user’s computer designated for sharing. It is not unusual, however, for users to download corrupt P2P programs or to misconfigure the software and unintentionally allow all of the files on their computer to be shared to the community.

The defendants are charged with using the account information and passwords that they obtained by searching the P2P networks to access the bank accounts of the victims and transfer funds to prepaid credit cards which they obtained in their own names. The defendants are alleged to have used the prepaid credit cards to purchase goods and to obtain cash in and around San Diego County. The victims include five users of the online payroll system of the United States Department of Defense (“DoD”). DoD, through its Defense Finance and Accounting Service (“DFAS”) provides an Internet accessible website to DoD personnel, including the Armed Forces, known as “DFAS MyPay,” to view and change information relating to their paychecks and other benefits. According to the indictment, the defendants accessed the accounts of the five individuals, consisting of active duty military, retired military and a civilian employee of the Air Force, Navy and Marine Corps, and re-directed their paychecks to the defendants’ prepaid credit card accounts. The defendants also are charged with victimizing a company in Florida that is in the business of selling products to assist senior citizens. All together, during the commission of these offenses from November 22, 2005, until September 12, 2006, according to the indictment, the defendant redirected and attempted to redirect over $20,000 in funds to themselves.

Bail was set at $20,000 for Mr. Phommavong. His next appearance will be on January 8, 2010, before United States District Judge Jeffrey T. Miller for hearing motions and setting a trial date. Mr. Girandola’s appearance will be arranged with the County of San Diego.

This case was investigated by Special Agents of the Cybersquad of Federal Bureau of Investigation in San Diego and by Special Agents of the Defense Criminal Investigative Service.

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.

source: www.cybercrime.gov

Six Individuals Sentenced for Multi Million Dollar E-mail Stock Fraud Scheme

Six individuals were sentenced today in federal court in Detroit for their roles in a wide-ranging international stock fraud scheme involving the illegal use of bulk commercial e-mails, or “spamming,” announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Michigan Terrence Berg. The defendants were sentenced by U.S. District Judge Marianne O. Battani.

Frank Tribble, 42, of Bayside, N.Y., was sentenced to 51 months in prison for conspiring to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, and also for committing wire fraud and engaging in money laundering. Tribble was also sentenced to five years of supervised release following his prison term and agreed to forfeit $500,000 to the United States.

Judy Devenow, 56, of East Lansing, Mich., was sentenced to 18 months in prison for conspiring to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, and also committing a substantive violation of the CAN-SPAM Act. Devenow was also sentenced to three years of supervised release following her prison term and ordered to pay a $7,500 fine.

William Neil, 46, of Fresno, Calif., was sentenced to 35 months in prison for conspiring to violate the CAN-SPAM Act and committing a substantive violation of the CAN-SPAM Act. Neil was also sentenced to three years of supervised release following his prison term and agreed to forfeit $56,000 to the United States.

James Bragg, 40, of Sun Lakes, Ariz., was sentenced to 12 months and one day in prison for conspiring to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, and also committing a substantive violation of the CAN-SPAM Act. Bragg was also sentenced to three years of supervised release following his prison term and agreed to forfeit $120,000 to the United States.

James Fite, 36, of Culver City, Calif., was sentenced to 12 months and one day in prison for conspiring to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, committing a substantive violation of the CAN-SPAM Act and making a false statement to federal agents. Fite was also sentenced to three years of supervised release following his prison term and agreed to forfeit $20,000 to the United States.

David Patton, 49, of Centreville, Va., was sentenced to one day in prison for aiding and abetting Alan Ralsky and others in committing substantive violations of the CAN-SPAM Act. Patton was also sentenced to one year of supervised release following his prison term and was ordered to forfeit $50,100 to the United States, which was paid in full today. He also was ordered to pay a $3,000 fine.

According to court documents, from January 2004 through September 2005, Alan Ralsky, Scott Bradley, Devenow, John Bown, William Neil, Bragg, Fite, Tribble, How Wai John Hui and others engaged in a related set of conspiracies designed to use spam e-mails to manipulate thinly traded stocks and profit by trading in those stocks once their share prices increased after recipients of the spam e-mails traded in the stocks being promoted.

The defendants, with the exception of Patton, were indicted in the Eastern District of Michigan in December 2007. Tribble and Devenow pleaded guilty in October 2008. William Neil, Bragg and Fite pleaded guilty in June 2009. Patton pleaded guilty to a criminal information in the Eastern District of Michigan in July 2009.
Tribble planned and directed the stock trading carried out in furtherance of the conspiracy. Devenow served as a manager for the spam e-mail operation and also sent spam emails.

William Neil, who was the chief operating officer of Internet services company GDC Layer One, served, created and maintained a computer network used to send e-mail in furtherance of the conspiracy. Bragg and Fite were contract mailers for the spam e-mail operation, and Patton created, marketed and sold to Ralsky specialized spamming software that the conspirators then used to send out millions of illegal spam e-mails.

According to court documents, many of the spam e-mails promoted thinly traded “pink sheet” stocks for U.S. companies owned and controlled by individuals in Hong Kong and China. The spam e-mails contained materially false and misleading information or omissions and were created and sent using software programs that made it difficult to trace them back to the conspirators. According to the indictment, the conspirators used wire communications, the U.S. mail and common carriers to perpetrate their frauds. The conspirators also engaged in money laundering involving millions of dollars generated by their manipulative stock trading.
According to the indictment, the defendants used various illegal methods in order to maximize the amount of spam that evaded spam-blocking devices and tricked recipients into opening, and acting on, the advertisements in the spam. These included using falsified “headers” in the e-mail messages, using proxy computers to relay the spam, using falsely registered domain names to send the spam, and also making misrepresentations in the advertising content of some of the underlying e-mail messages.

Anki Neil and Peter Severa are also named as defendants in the indictment returned in the Eastern District of Michigan and their cases are still pending. An indictment is merely an accusation and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.

Ralsky, Bradley, Hui and Bown were sentenced yesterday for their roles in the scheme. Ralsky was sentenced to 51 months in prison; Bradley was sentenced to 40 months in prison; Hui was sentenced to 51 months in prison; and Bown was sentenced to 32 months in prison. The four defendants were also sentenced to supervised release following their prison terms as well as ordered to forfeit various amounts and/or pay fines.

The charges arose after a three-year investigation, led by the FBI with assistance from the U.S. Postal Inspection Service and IRS-CI revealed a sophisticated and extensive spamming operation. The U.S. Securities and Exchange Commission’s Philadelphia Regional Office has provided significant ongoing assistance in this case. The case is being prosecuted by U.S. Attorney Terrence Berg and Trial Attorneys Thomas Dukes and Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section.

source: www.cybercrime.gov