Home » English » Largest Scam Of Its Kind': Computer Hackers Charged In $30 Million Stock Trading Scheme

Largest Scam Of Its Kind': Computer Hackers Charged In $30 Million Stock Trading Scheme

Largest Scam
The ring allegedly stole 150,000 unpublished press releases containing insider information.

A Newark federal court indicted nine people on Tuesday for what prosecutors are calling the “largest known computer hacking and securities fraud scheme” in the nation’s history.

According to the U.S. Attorney’s Office (New Jersey), an international ring of computer hackers conspired to break into three of the largest press release services in the world to steal more than 150,000 unpublished news announcements containing sensitive financial information.

The illegally-obtained information was then used to make trades that generated approximately $30 million in illegal profits, making it the “largest scheme of its kind ever prosecuted,” prosecutors stated.

The 23-count indictment charged five defendants with wire fraud conspiracy, securities fraud conspiracy, wire fraud, securities fraud, and money laundering conspiracy: Ivan Turchynov, 27; Oleksandr Ieremenko, 24; and Pavel Dubovoy, 32; all from the Ukraine, and Arkadiy Dubovoy, 51, and Igor Dubovoy, 28, of Alpharetta, Georgia.

Turchynov and Ieremenko were also charged with computer fraud conspiracy, computer fraud, and aggravated identity theft.

In addition, four people were charged with wire fraud conspiracy, securities fraud conspiracy, securities fraud, and money laundering conspiracy: Vitaly Korchevsky, 50, of Glen Mills, Pennsylvania; Vladislav Khalupsky, 45, of Brooklyn, New York; and Odessa, Ukraine; Leonid Momotok, 47, of Suwanee, Georgia; and Alexander Garkusha, 47, of Cummings and Alpharetta, Georgia.

On Tuesday, the government seized 17 bank and brokerage accounts containing more than $6.5 million of alleged criminal proceeds. The government also took steps to restrain 12 properties worth an estimated $5.5 million, including a shopping center located in Pennsylvania, an apartment building located in Georgia and a houseboat.

Five of the nine defendants named above were arrested on Tuesday: Arkadiy Dubovoy, Igor Dubovoy, Momotok, and Garkusha were all arrested at their homes in Georgia; Korchevsky was arrested at his home in Glenn Mills, Pennsylvania.

Turchynov, Ieremenko, Pavel Dubovoy and Khalupsky remain in the Ukraine; international arrest warrants were issued on Tuesday.

THE ALLEGED SCHEME

According to prosecutors:

Between February 2010 and August 2015, Turchynov and Ieremenko gained unauthorized access into the computer networks of Marketwired, PR Newswire Association and Business Wire.

Turchynov and Ieremenko then used a series of sophisticated cyber attacks to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues and other confidential and material.

At one point, one of the hackers sent an online chat message in Russian to another individual stating, “I’m hacking prnewswire.com.” In another online chat, Ieremenko told Turchynov that he had compromised the log-in credentials of 15 Business Wire employees.

In a series of emails, the hackers shared instructions on how to access and use an overseas server with their alleged conspirators, called “traders,” including Arkadiy Dubovoy, Korchevsky, Momotok, Igor Dubovoy, Pavel Dubovoy, Khalupsky and Garkusha.

The traders would then create “wish lists” to get unpublished press releases from publically traded companies including Align Technology, Caterpillar, Hewlett Packard, Home Depot, Panera Bread and Verisign.

Potential penalties for the alleged crimes include five to 20 years in prison and fines of up to twice the value of the illegal transfers.


By eric.kiefer (Patch Staff) August 11, 2015 link
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