Shalon’s alleged ring processed payment information for fake pharmaceuticals and fake anti-virus software. Its members sent misleading stock pitches to clients of banks and brokerages, whose e-mail addresses they’d stolen. They profited by using trading accounts set up under fake names and used dozens of shell companies and bank and brokerage accounts around the world to launder money. They also tried to extract nonpublic information from financial corporations, prosecutors said.
Shalon -- also known as Garri Shalelashvili, Phillipe Mousset and Christopher Engeham -- was the self-described “founder” of the enterprise, according to an indictment unsealed in Manhattan that also named Joshua Aaron and Ziv Orenstein. Shalon directed hacks to further his market-manipulation and Internet gambling schemes, the indictment said, concealing at least $100 million in Swiss and other bank accounts.
Shalon and Orenstein were arrested in Israel in July, and the U.S. is seeking their extradition to New York for trial. Aaron remains at large.
Alan Futerfas, a lawyer for Orenstein, didn’t immediately return a voice-mail message left at his office seeking comment. Shalon and Aaron couldn’t be reached for comment.
A separate indictment outlined the case against Anthony Murgio, who was arrested in Florida in July. He was accused of crimes related to a bitcoin-exchange service owned by Shalon, as well as the takeover of a New Jersey credit union, all used to launder proceeds from the criminal enterprise.
Gregory Kehoe, a lawyer for Murgio, didn’t immediately return a voicemail message left at his office seeking comment.
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Outlines of the government’s case against the men began emerging with the arrests last summer, when Shalon, Orenstein and Aaron were implicated in a pump-and-dump scheme. That began raising questions about the links between Shalon and a group of men, including Murgio and Aaron, whose friendship dated back more than a decade to their days at Florida State University.
Another mystery: Who did the hacking? A clue emerged in an indictment over the E*Trade attack, which was unsealed Tuesday in federal court in Atlanta. It names Shalon, Aaron and a third person -- “a computer hacker who is believed to have resided in Russia” -- who it alleges infiltrated computer networks under Shalon’s direction, located customer databases and exported the profile information to computers oversees.
Among the ring’s early hacking targets was Dow Jones. The hackers located some 10 million e-mail addresses of customers and stole millions of those from Dow Jones, identified as Victim 8 in the indictment.