DOJ charges 36 alleged scammers for $530 million cyber-fraud scheme
The Justice Department has charged 36 individuals with connections to a cyber-fraud ring that claimed more than $530 million in stolen funds in its seven-year history. The group, known as the “Infraud Organization,” were charged with nine counts, including conspiracy to racketeer, wire fraud, and computer crimes. The group acquired, sold, and disseminated stolen identities, compromised credit and debit cards, and other financial and personal information. An indictment filed in Las Vegas detailing the charges was unsealed Wednesday, said the group’s alleged administrator and founder, Svyatoslav Bondarenko, who created the forum on the dark web in 2010. The indictment said the founder billed the forum as the “premier destination for carding, and to 18 direct traffic and potential purchasers to the automated vending sites of its members, which serve as online instruments that traffic in stolen means of identification, personally-identifying information, stolen financial and banking information, and other illicit goods.”
Prosecutors said that the Bondarenko, a Ukrainian national, dropped off the site’s radar in 2015. Dubbed “Operation Shadow Web,” the criminal group’s server was taken offline following cooperation from British, Australian, EU and Asian law enforcement groups. As of about a year ago, there were more than 10,900 members on the group’s forum, the indictment says. In a media call following the indictment unsealing, deputy assistant attorney general David Rybicki called the case “one of the largest cyber fraud enterprise prosecutions ever undertaken” by the Justice Department. Prosecutors claim the three-dozen alleged scammers intended to generate upwards of $2.2 billion in stolen revenue from consumers, businesses, and financial institutions. Justice Dept. officials said five of the named defendants were from the US, and eight defendants have been arrested and are pending extradition from the UK, Australia, France, Italy, Kosovo and Serbia. The rest of the suspects remain at large, said prosecutors. [Source: ZDNet]
Man arrested for accepting EBT cards for cash, heroin
The Knox County Sheriff’s Office in Tennesse raided a North Knox County home off Emory Road Tuesday morning after a man allegedly accepted EBT cards in exchange for cash or heroin. Deputies arrested James Hampton Jr., 52. Hampton was arrested on 21 warrants for theft, sale and delivery of Schedule 1 drugs (heroin), food stamp fraud, ID theft, and computer crimes, according to investigators. According to Chief Deputy Lee Trammel, Hampton was using a business, Volunteer Meat and Seafood, as a front to buy EBT or food stamp cards. The sheriff’s office said Hampton had an EBT card reader in a van, he would swipe the card and if there was $500 on it, he’d split the money with the person bringing him the card. There were no records that he was actually selling any meat or seafood. He would also swipe cards and take the money to supply heroin, Trammel said. The sheriff’s office said some people may have swiped cards with him to buy items they couldn’t buy with EBT cards but not necessarily drugs. Hampton allegedly traded those cards for drugs and cash. According to Trammel, the investigation is ongoing and more arrests are expected. “We believe if we can cut the addiction in our community, we can absolutely cut the crime rate,” Trammel said. The Organized Retail Crime Unit treats cases like this like drug cases because more and more people that are being arrested for these crimes have a drug problem, they want to get off the streets, and want to get clean, Trammel said. [Source: WBIR10 News]
Uber says hackers behind 2016 data breach were in Canada, Florida
The two people who hacked ride-hailing firm Uber’s data in 2016 were in Canada and Florida at the time, a company security executive told a U.S. congressional committee on Tuesday About 25 million people whose data was compromised in the breach live in the United States, Uber Technologies Chief Information Security Officer John Flynn said in written testimony to a Senate Commerce Committee panel. Of those, 4.1 million were drivers, said Flynn, whose testimony described new details about the hack, the handling of which prompted newly appointed Uber Chief Executive Officer Dara Khosrowshahi to fire two top security officials. Uber disclosed the breach of 57 million worldwide users in November, about a year after it occurred. Reuters reported in December that a 20-year-old man was primarily behind the breach, and that he was paid by Uber to destroy the data through a so-called “bug bounty” program, which is designed to reward researchers for uncovering security vulnerabilities. Flynn confirmed the man who obtained data from Uber was in Florida and revealed that his partner, who first contacted the company on Nov. 14, 2016, to demand a six-figure payment, was in Canada.
Flynn said Uber had made mistakes, including paying the hackers through its “bug bounty” program. “We made a misstep in not reporting to consumers, and we made a misstep in not reporting to law enforcement,” Flynn said. Republican and Democratic lawmakers admonished Uber for its delay in disclosing the breach. “The fact that the company took approximately a year to notify impacted users raises red flags within this committee as to what systemic issues prevented such time-sensitive information from being made available to those left vulnerable,” Republican Jerry Moran said. Democratic Senator Richard Blumenthal said Uber’s management of the hack was “morally wrong and legally reprehensible,” and that the company appeared to violate state rules for data breach disclosure. Compromised data includes names, phone numbers and email addresses but not Social Security numbers or credit card information of Uber users. Driver’s license numbers of 600,000 drivers were also compromised. [Source: US News]
Authorities seized $20M in counterfeit Super Bowl merchandise
It was no surprise that counterfeit Super Bowl items were a large concern for the 2018 Super Bowl. In fact, the Philadelphia Eagles and the New England Patriots even teamed up with the NFL to crack down on the fake merchandise together. Now, we have some numbers on how much counterfeit merchandise federal agents managed to seize. According to The Washington Examiner, federal agents in the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) branch seized approximately $20 million in counterfeit items that would have been sold for the big game. Operation Team Player, an annual project to find fake merchandise, netted 260,000 counterfeit sports-related items, which led to the arrests of 56 people. “Criminal elements use major sporting events like the Super Bowl as an opportunity to sell substandard and counterfeit goods to the American public,” Acting ICE Director Thomas D. Homan said, according to the Washington Examiner. “ICE special agents are committed to collaborating with industry and law-enforcement agencies to crackdown on counterfeiting that significantly impacts local economies and funnels money into organizations involved in additional illicit activities.” Last year’s operation seized nearly 450,000 items worth approximately $39 million. [Source: Promo Marketing Magazine]
Lodi man faces decades in prison, accused of misdemeanor fraud
A Lodi, Wisconsin, man is being held in Columbia County Jail on $250 cash bond on new charges of credit card fraud a little over six months after his release on extended supervision. Levi Kearney, 22, recently of Portage, was charged Tuesday with two counts of misdemeanor credit card fraud and two counts of misdemeanor bail jumping after spending nearly a month in jail. Kearney also may have violated a deferred prosecution agreement in a previous case and as a result could face decades in prison. The Portage Police Department received a report from a woman Jan. 8 that she had lost a debit card, which was used twice on Jan. 3, with $200 and then $102 taken out of her account at Portage ATMs. The surveillance footage from each machine appeared to show Kearney, according to Portage police detectives. On Jan. 10, Kearney was arrested on a probation hold, though Portage police were unable to verify whether it was pertaining to this case or another. At the end of the month, police received a recording of a phone call between Kearney and the alleged victim on Jan. 16, in which Kearney called collect to apologize and ask that she drop the charges, offering double her money back if she did.
On June 29, 2015, Kearney entered a plea of no contest to one charge of second-degree sexual assault of a child and three counts of fourth-degree sexual assault in connection to a relationship with a 15-year-old girl at that time. That November, Kearney was arrested again when Portage police responded to a disturbance in which Kearney was accused of punching a 16-year-old, resulting in a charge of felony child abuse. At Kearney’s sentencing hearing on April 18, 2016, Judge Alan White asked Kearney to tell him the meaning of his deferred prosecution and the conditions of the sentence of a year in jail, followed by two years’ probation. “It means I have to complete probation or get revoked,” Kearney replied. White clarified, “It means it would go to sentencing and a felony sexual assault would be a rather serious matter.” At Kearney’s initial court appearance via video from jail on Tuesday, Judge Todd Hepler ordered him held on an additional $250 cash bond and scheduled a return hearing May 3. If convicted on his new charges, Kearney faces up to nine years in prison along with decades behind bars following new sentencing in his previous cases. [Source: Portage Daily Register]
Former employee accused of stealing UPS packages
A former UPS employee broke into a UPS truck and stole packages containing cell phones in the Austin, Texas, area, an arrest affidavit said. Sean Hood, 34, of Pflugerville, was charged with theft, a state jail felony punishable by up to two years in jail. He also was charged with possession of a controlled substance. A UPS loss prevention investigator said Hood was a former employee who had been breaking into UPS trucks and posing as a UPS delivery driver to steal packages from cell phone stores across Austin, Pflugerville, Round Rock and Georgetown, the affidavit said.
Police were alerted Jan. 18 after the loss prevention official investigating the thefts said he saw a car appearing to have several stolen UPS packages in plain view inside of it parked outside the Colonial Grand Apartments at 1800 Plateau Vista in Round Rock, the affidavit said. It said officers stopped the car, driven by Hood, a short time later in a parking lot at 1301 AW Grimes Blvd. Police found nine stolen UPS packages inside the car containing cell phones and electronics equipment, according to the affidavit. The stolen items found in his truck, which were from Round Rock, Georgetown and Austin, were worth $4,405.78, the affidavit said. It said officers also found heroin inside the car. Hood was being held Tuesday at the Williamson County Jail with bail set at $115,000. [Source: Statesman]