Largest Cyber Fraud Case In US History

Largest Cyber Fraud Case In US HistoryWe've stressed the importance of protecting your shared hosting and cheap hosting website from hackers, and recent news highlights the reason it should be high on your list. Federal prosecutors announced yesterday they have charged five men involved in a hacking and credit card fraud spree that resulted in over $300 million in damages to companies, the largest cyber crime event in US history. Two of the five suspects are in custody currently.

At the same time, they announced a security breach against Nasdaq but didn't provide adequate details regarding the attack.

A Visa Inc. licensee, JetBlue Airways Corp., J.C. Penney Co., and French retailer Carrefour SA were also targeted according to the indictment.

Largest Cyber Fraud Case In US History: The Hackers

Authorities have been after the hackers for years, evidenced by the fact the breaches laid out in the indictment were previously reported. The only one that appears to have never been reported: the breach involving Nasdaq OMX Group Inc.

The five men, from Russia and Ukraine, have swiped an estimated 160 million credit card numbers according to prosecutors, leading to losses of over $300 million.

Largest Cyber Fraud Case In US History: How They Did It

It appears that each man had a different task within the organization: Russians Alexandr Kalinin, 26, and Vladimir Drinkman, 32, hacked into the networks; Russian Roman Kotov, 32, extracted the data; and Ukrainian Mikhail Rytikov, 26, provided anonymous web hosting services that disguised all of their activities.

Dmitriy Smilianets, 29 year old from Russia, is allegedly responsible for selling the stolen numbers and handing out profits. According to prosecutors, he charged $10 for each US card, $15 for Canadian cards, and $50 for European cards (more expensive due to the computer chips that exist to make them more secure.)

How were they able to conduct their activities without anyone catching on? It seems they disabled the anti-virus software of victims, storing the data on numerous hacking platforms. The credit card numbers that were stolen were sold to resellers who in turn sold them to either “cashers” who encode the numbers onto new cards, or to online forums.

“This type of crime is the cutting edge,” said Paul J. Fishman, New Jersey US Attorney. “Those who have the expertise and the inclination to break into our computer networks threaten our economic well being, our privacy, and our national security.”

Largest Cyber Fraud Case In US History: But Wait, There's More.

Also listed in the indictment as a co-conspirator: Albert Gonzalez. He is currently serving a 20 year sentence for leading one of the biggest hacking fraud schemes in our history. He pled guilty after he was caught stealing millions of credit and debit cards.

It seems the five men worked with Gonzalez prior to his Miami arrest, according to prosecutors, continuing their malicious work afterwards.

Both Smilianets and Drinkman were arrested last year in June in the Netherlands upon order of US authorities. Smilianets is slated to appear in a New Jersey Federal court next week following his extradition last September, while Drinkman is still waiting on an extradition hearing in the Netherlands.

Largest Cyber Fraud Case In US History: The Nasdaq Breach

Two other indictments were disclosed from the US Attorney's office in Manhattan, both against Kalinin. One states he hacked Nasdaq servers from November of 2008 through October 2010, installing malicious software that allowed him and his associates to delete, change, or steal data. The servers affected did not have critical trading information, and Nasdaq officials won't comment just yet.

A source that wishes to remain anonymous reported that the hackers created their own landing page using the access their malicious software granted them, which users were redirected to when they wanted to change their passwords.

The second indictment: there is a sixth hacker involved, Russian Nikolay Nasenkov, 31, who helped pilfer bank account details from thousands of Citibank and PNC Bank numbers from 2005 to 2008. Millions of dollars were stolen.

Even when you take extra precautions to assure your data is secure, there are hackers out there trying to work around these measures.

Have you looked at your cheap hosting website's security? Maybe it's time to do so.

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