Three Men Charged In US And Ukraine In International Cyber-Crime Ring Takedown

US federal prosecutors have indicted three men who allegedly ran an international cybercrime ring that targeted more than a dozen financial institutions, as well as the US Department of Defence’s payroll service.

Authorities have charged Oleksiy Sharapka, 33, and Leonid Yanovitsky, 39, both of Kiev, Ukraine, and Richard Gundersen (pictured), 47, of Brooklyn, New York, with conspiracy to commit wire fraud; conspiracy to commit access device fraud and identity theft; and aggravated identity theft.

Ukraine-based conspiracy

Sharapka and Yanovitsky remain at large, while Gundersen is expected to face charges at a later date, according to authorities. Sharapka is charged with running the conspiracy with Yanovitsky’s assistance, while Gundersen allegedly helped move the profits from the group’s activities.

The three face up to 20 years in prison on the count of wire fraud conspiracy; the count of access device fraud and identity theft carry a maximum sentence of five years, while the aggravated identity theft counts carry consecutive terms of two years.

Five other people were also charged, according to US Attorney Paul Fishman in New Jersey, who announced the indictments on Monday. Authorities said they have dismissed charges against one of these defendants, Ilya Ostapyuk of Brooklyn, while another, Andrey Yarmolitskiy, 41, of Atlanta, pleaded guilty and is awaiting sentencing; the other three, Oleg Pidtergerya, 49, of Brooklyn, Robert Dubuc, 40, of Malden, Massachusetts, and Lamar Taylor, 37, of Salem, Massachusetts, still face charges.

Authorities announced they had dismantled the scheme in June.

Complex scheme

The defendants allegedly electronically infiltrated bank accounts, diverting funds to bank accounts and pre-paid debit cards that they controlled. To access the funds they allegdly used a sophisticated “cash-out” operation, using “cashers” who made ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere.

The scheme also allegedly involved the theft of some US citizens’ identities, which were then used to fraudulently establish debit cards for the cash-out operation or to file fraudulent tax returns seeking refunds from the US’ Internal Revenue Service. The funds were transferred to the overseas leaders of the crime ring using international wire services, according to the charges.

Organisations allegedly targeted included Aon Hewitt, Automatic Data Processing, Citibank, eBay’s PayPal, Electronic Payments, E*Trade, Fundtech Holdings, iPayment, JPMorgan Chase Bank, Nordstrom Bank, TD Ameritrade, TIAA-CREF, USAA, Veracity Payment Solutions, and the Defence Department’s finance and accounting service.

The cybercrime operation started around March 2012, when Sharapka was deported from the US after serving nearly 7 1/2 years in a Massachusetts federal prison, to around June 2013, according to the charges.

Cyber-crime in the Ukraine and Russia

A significant level of cyber-crime activity now originates from Russia and the Ukraine. In October WebSense said it had detected a large-scale cyber attack campaign against organisations including government and transport bodies carried out by a gang of cyber-criminals in Russia and the Ukraine. Using the Mevade malware, which has a Tor command and control functionality to hide operations, the crooks went after entities in the US, UK, Canada and India, the security firm said.

Russia and the Ukraine are allegedly also involved in state-sponsored cyber-espionage, according to some reports.

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