Through the dark world of cybercrime, its tentacles spread everywhere: stock manipulation, money laundering, gambling and more.
Nothing in the annals of corporate hacking compares to the portrait U.S. authorities painted Tuesday of a vast, global crime syndicate -- a mob for the digital age. As described by federal prosecutors, it was an operation of breathtaking scale, involving more than 100 people in a dozen countries, with illicit profits stretching into the hundreds of millions of dollars.
At its head is a mysterious Israeli, Gery Shalon -- a 31- year-old from the Republic of Georgia who prosecutors said used aliases, fake passports and banking havens to turn hacking into the backbone of his criminal enterprise.
Much as the mafia gained footholds in construction, shipping, trucking and gambling, Shalon’s organization was a conglomerate that allegedly ran illegal Internet casinos and elaborate pump-and-dump stock schemes, while dabbling in credit- card fraud and fake pharmaceuticals.
His group is the thread that runs through many of the biggest cyber-attacks of recent years, including the largest bank breach on record, involving the theft of information relating to 83 million customer accounts from JPMorgan Chase & Co.
Along with JPMorgan, Fidelity Investments Ltd., E*Trade Financial Corp., Scottrade Financial Services Inc. and Dow Jones & Co., a unit of News Corp., confirmed they had been among the victims of hackers who worked for the group. The indictment unsealed Tuesday against Shalon and two other men didn’t name those institutions, saying only that hackers linked with the group had breached banks and other financial firms, stealing information on 100 million of their customers.
“The conduct alleged in this case showcases the brave new world of hacking for profit,” U.S. Attorney Preet Bharara in Manhattan said Tuesday in announcing two of the indictments that laid out parts of the scheme.
“It is no longer hacking merely for a quick payout,” Bharara said. “It is hacking as a business model.”
The allegations are perhaps the starkest illustration yet that even the most sophisticated computer networks, run by companies at the heart of the global financial system, may be vulnerable in the age of the Digital Don. The latest revelations come just three months after U.S. authorities arrested several men they accuse of lurking inside servers where corporate press announcements were awaiting release, in order to trade on the information before it went public.
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