NEWARK, N.J./BOSTON, (Reuters) – Federal prosecutors said yesterday they have charged five men responsible for a hacking and credit card fraud spree that cost companies more $300 million and two of the suspects are in custody, in the biggest cyber crime case filed in U.S. history.
They also disclosed a new security breach against Nasdaq, though they provided few details about the attack.
Other companies targeted by the hackers include a Visa Inc licensee, J.C. Penney Co, JetBlue Airways Corp and French retailer Carrefour SA, according to an indictment unveiled in New Jersey.
Authorities have been pursuing the hackers for years. Many of the breaches were previously reported, though it appeared the one involving Nasdaq OMX Group Inc was being disclosed for the first time.
Prosecutors said they conservatively estimate that the group of five men from Russia and Ukraine helped steal at least 160 million payment card numbers, resulting in losses in excess of $300 million.
Authorities in New Jersey charged that each of the defendants had specialized tasks: Russians Vladimir Drinkman, 32, and Alexandr Kalinin, 26, hacked into networks, while Roman Kotov, 32, mined them for data. They allegedly hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 26, of Ukraine.
Russian Dmitriy Smilianets, 29, is accused of selling the stolen data and distributing the profits. Prosecutors said he charged $10 for U.S. cards, $15 for ones from Canada and $50 for European cards, which are more expensive because they have computer chips that make them more secure.
The five hid their efforts by disabling anti-virus software of their victims and storing data on multiple hacking platforms, prosecutors said. They sold payment card numbers to resellers, who then sold them on online forums or to “cashers” who encode the numbers onto blank plastic cards.
“This type of crime is the cutting edge,” said New Jersey U.S. Attorney Paul J. Fishman. “Those who have the expertise and the inclination to break into our computer networks threaten our economic wellbeing, our privacy and our national security.”
The indictment cited Albert Gonzalez as a co-conspirator. He is already serving 20 years in prison after pleading guilty to helping mastermind one of the biggest hacking fraud schemes in U.S. history, helping steal millions of credit and debit cards.
Prosecutors say the defendants worked with Gonzalez before his arrest in Miami, then continued on a crime spree after his capture.
Drinkman and Smilianets were arrested in June 2012, while traveling in the Netherlands, at the request of U.S. authorities. Smilianets was extradited last September and is expected to appear in New Jersey Federal court next week. Drinkman is awaiting an extradition hearing in the Netherlands.
Prosecutors declined comment on the whereabouts of the other three defendants.
Tom Kellermann, a vice president with security software maker Trend Micro, said he thinks the prospects are dim that they will be caught because authorities in some countries turn a blind eye to cyber criminals.
“There is an enormous shadow economy that exists in Eastern Europe. In some countries, sophisticated hackers are seen as national assets,” he said.
Kalinin and Drinkman were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Gonzalez in connection with five breaches.
The U.S. Attorney’s Office in Manhattan announced two other indictments against Kalinin, one charging he hacked servers used by Nasdaq from November 2008 through October 2010. It said he installed malicious software that enabled him and others to execute commands to delete, change or steal data.
The infected servers did not include the trading platform that allows Nasdaq customers to buy and sell securities, prosecutors said. Officials with Nasdaq said they could not immediately comment.
A source with knowledge of the breach said on Thursday the indictment was not related to a 2010 attack that Nasdaq had previously disclosed, which was targeted against Directors Desk, a service used by corporate boards to share documents and communicate with executives, among other things.
The source, who asked to remain anonymous due to the sensitivity of the matter, said that hackers appear to have used their access to the firm’s network to create their own landing page on a Nasdaq website, where users were directed when they
wanted to change their passwords.
The second indictment filed against Kalinin in Manhattan, which was unsealed on Thursday, charged that he worked with a sixth hacker, Russian Nikolay Nasenkov, 31, to steal bank account information from thousands of customers at Citibank
and PNC Bank from 2005 to 2008, resulting in the theft of millions of dollars.
Mark Rasch, a former federal cyber crimes prosecutor, told Reuters that the arrests show that law enforcement is making progress in identifying those responsible for major cyber crimes.
“They involve dozens or even hundreds of people huddled over computer terminals all over the world in a common purpose of stealing of disseminating credit card numbers,” said Rasch, who was not involved in bringing the case.