32 people charged in international hacking and insider trading ring

The Securities and Exchange Commission (SEC) of the United States announced on August 11 fraud charges against 32 people, among them two are Ukrainian men, after finding their involvement in an alleged international hacking and insider trading ring.

The SEC issued a press release informing that these people took part in a scheme to profit from stolen nonpublic information about corporate earnings announcements.

“Those charged include two Ukrainian men who allegedly hacked into newswire services to obtain the information and 30 other defendants in and outside the U.S. who allegedly traded on it, generating more than $100 million in illegal profits,” the press release read.

According to the press statement, the complaint against the people was filed under seal on August 10 in U.S. District Court in Newark, N.J.

The crooks used proxy servers to mask their identities and by posing as newswire service employees and customers.  The two allegedly recruited traders with a video showcasing their ability to steal the earnings information before its public release.

“The complaint charges that in return for the information, the traders sometimes paid the hackers a share of their profits, even going so far as to give the hackers access to their brokerage accounts to monitor the trading and ensure that they received the appropriate percentage of the profits,” the statement read.

Similarly, it also charges that the traders sought to conceal their illicit activity by establishing multiple accounts in a variety of names, funneling money to the hackers as supposed payments for construction and building equipment, and trading in products such as contracts for difference (CFDs).                                              

“This international scheme is unprecedented in terms of the scope of the hacking, the number of traders, the number of securities traded and profits generated,” Mary Jo White, Chairperson of the SEC, said in the press release.

 “These hackers and traders are charged with reaping more than $100 million in illicit profits by stealing nonpublic information and trading based on that information. That deception ends today as we have exposed their fraudulent scheme and frozen their assets,” she added.

The SEC charged that Ivan Turchynov and Oleksandr Ieremenko created a secret web-based location to transmit the stolen data to traders in Russia, Ukraine, Malta, Cyprus, France, and three U.S. states, Georgia, New York, and Pennsylvania.

“This cyber hacking scheme is one of the most intricate and sophisticated trading rings that we have ever seen, spanning the globe and involving dozens of individuals and entities,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement.  “Our use of innovative analytical tools to find suspicious trading patterns and expose misconduct demonstrates that no trading scheme is beyond our ability to unwind.”

Three Estonian men sentenced for internet fraud by US court

Manhattan federal court has sentenced over three years imprisonment to three Estonian men for their involvement in an Internet scheme that infected more than 4 million computers in over 100 countries.

U.S. District Judge Lewis A. Kaplan said that, "It's hard to pick up a newspaper this summer without reading about another one." Justifying his decision he said it was important to impose tough sentence.

Timur Gerassimenko, 35, was sentenced to four years, Dmitri Jegorov, 37, got 3 2/3 years and Konstantin Poltev, 31, received 3 1/3 years for their roles in an internet  fraud.

According to the government, Gerassimenko was the main culprit behind this fraud, he hired programmers, Jegorov as the lead network administrator while Poltev as the public face of the enterprise.

When the men were arrested in Estonia, Gerassimenko was ordered to forfeit $2.5 million while Jegorov and Poltev were each told to forfeit $1 million. All three of them  apologized for their crimes before they were sentenced.

The fraud has affected computers belonging to government agencies such as NASA, along with educational institutions, nonprofit organizations, businesses and individuals.

The malware scheme that was  carried out with co-conspirators in Russia and Ukraine, cost NASA more than $65,000 in repairs.

All three men sentenced Thursday are serving sentences in Estonia for similar crime.

Vietnamese Hacker who stole identities of 200 million American, sentenced to 13 years

After breaking into the computers of several business entities and stealing the personal identification information of over 200 million Americans, a Vietnamese hacker has finally been sentenced for 13 years in prison.

The Department of Justice on Tuesday, released a report announcing that Hieu Minh Ngo, 25, bagged $2 mn from hacking and stealing the personal identification and selling it to other cyber criminals.

A District Court in New Hampshire finally sentenced Ngo on Tuesday for various fradulent charges, as reported by the Financial Times. Ngo was arrested in february 2013, soon as he entered America.

Back in his home in Vietnam, Ngo was active from 2007 till 2013, for breaking into computer systems and stealing identifiable information like Social security numbers, credit card details, bank account, phone numbers, and advertising about the data on his websites, from where the fellow hackers used to buy the information.

A press release by the Justice Department specified that 'Ngo admitted that he offered access to PII (personally identifiable information) for 200 million U.S. citizens, and that more than 1,300 customers from around the world conducted more than three million "queries" through the third-party databases maintained on his websites'.

The Internal Revenue Service stated that the information sold on Ngo's website to other hackers was used to file income tax returns for more than 13000 people, who saw $65 million returned on their behalf.

'Criminals buy and sell stolen identity information because they see it as a low-risk, high-reward proposition,' Assistant Attorney General Leslie Caldwell said a statement.
'Identifying and prosecuting cyber criminals like Ngo is one of the ways we're working to change that cost-benefit analysis.'

The US Office of Personnel Management revealed that the hackers have stolen more than 21.5 mn social security numbers till now, and out of them 1.1 mn include fingerprints.

Sentencing Ngo has finally taken an initiative for stopping cyber crimes that are breaching the personal identity of civilians.

FBI takedown biggest malware marketplace 'Darkode'

Federal Bureau of Investigation  announced the takedown of ‘Darkode’, an international malware marketplace, on Wednesday.

Darkode was a secretive, password protected society of elite hackers, and this forum was used as a meeting place, and place to purchase and trade of hacking tools since 2008.

FBI arrested people from  20 countries and indictments for 70 individuals, including 12 in the U.S., from Wisconsin to Louisiana.

U.S. Attorney David J. Hickton said, “The FBI has effectively smashed the hornets' nest and we are in the process of rounding up and charging the hornets."

Adding to this Hickton explained how Darkode was one of the greatest threats to online security, mentioning one forum member who put up software (for a price of $65,000) that can take over cellphones. He said that how a user offered the ability to steal and sell lists of friends on Facebook.

According to the FBI’s Special Agent in Charge Scott S. Smith the arrests came after a two-year of undercover operation that infiltrated the forum.

The Pittsburgh Post-Gazette explains how the investigation started: "Following a lead generated in Pittsburgh around 18 months ago, the FBI cybersquad here launched Operation Shrouded Horizon. The bureau's local office assembled a coalition that started domestically with the bureau's offices in Washington, D.C., San Diego, New Orleans and San Francisco, and extended to online enforcement teams in 20 countries, including numerous European countries, Israel, Australia, Colombia, Brazil and Nigeria."

Federal officials say the investigation into Darkode is continuing.

Hacker who sold Madonna song sentenced to 14 months in prison

Adi Lederman has been sentenced to 14 months in prison in Israel after being found guilty of selling and stealing singer Madonna's unreleased songs.

He was also fined 5,000 shekels, which comprehends to about $3900. The court has sad that an appropriate punishment will deter this kind of incidents in the future.

Madonna's latest album Rebel Heart was leaked on the internet last year. At the time she said' “I have been violated as a human and an artist.”

Later she later six songs, calling it an “early Christmas gift” for her fans.

Lederman was arrested earlier this year and agreed to a plea deal after confessing the crime.

Schoolboy hacker who 'launched DDOS attacks against worldwide organizations' walks free

In 2001, several global organisations including BBC, faced cyber attacks by a teenage geek named as 'Narko', who "almost broke the internet" just sitting in his bedroom and was walking free on the streets after such a felony.

Seth Nolan-Mcdonagh was introduced to the world of hacking at the age of 13, by a group of online hackers who were at that time breaking the integrity of websites using a technique called 'Distributed Denial of Service' or DDOS for short.

The scam bagged £70,000 for Narko, who then quit school and joined the hacking fraternity after losing contact with the 'real world'.

Narko came back into limelight in 2013, when he successfully attacked Spamhaus, a spammer database for email service providers. He then chose a bigger target; CloudFlare, a service that prevents online assaults, which was considered as the biggest DDOS attack of that time.

In 2015, Seth was finally produced in front of the Southwark Crown court for the sentencing of the young felon.

The young hacker has already been pleaded guilty to two counts of unauthorized modification of computer material and one count of possessing articles for use in fraud.

In addition to these charges, he has also admitted that he transferred criminal property and possessed 924 indecent photos of children.

Seth was sentenced guilty by Judge Jeffrey Pegden, who stated that he had committed serious crime and that too at the tender age of 13. And all the attacks caused by him were committed at the time when he hadn't been of age. Thus, his sentence was announced while taking him into consideration as a youth.

Judge Pegden also notified the fact that his age while committing the offenses as well as the evidences showing that he was suffering from a mental illness, played a significant role.

Though, it has been said that he has 'improved' a lot ever since he has been sent to rehab, a question still arises about the assurance of a hacker who has seen the lavishside of hacking.