“Casino turnover” in October 2013 alone was $78.9 million, Shalon’s associate Orenstein said in an e-mail. Profit for February 2015 totaled $7.29 million, another e-mail said.
To attract bettors, Shalon used “massive” e-mail campaigns. He also arranged to send promotional material through the regular mail to as many as 100,000 U.S. residents in more than 30 states.
Customer Data
All the while, Shalon was bent on crippling his rivals, the government said. He and his accomplices allegedly broke into other Internet gambling operations to steal customer data and orchestrated the hack of two firms that supplied software to online casinos.
By 2012, the government said, Shalon had grown so aggressive he was engineering cyber-attacks to incapacitate rival gambling sites “in response to perceived misconduct” directed at his own casinos.
Another part of Shalon’s 21st-century cyberfraud was a classic 20th-century pump-and-dump scheme, which authorities said netted tens of millions of dollars in illicit profits.
Teaming with two allegedly crooked stock promoters who are now cooperating with prosecutors, Shalon, Aaron and sometimes Orenstein selected publicly traded companies or private firms they could take public through reverse mergers with listed shell corporations.
Aliases, Passports
Using aliases and phony passports, the five opened trading accounts and then bought on the cheap almost all of a company’s shares, driving its price higher -- in one instance, more than 1,800 percent higher.
In the first phase, they and their accomplices executed prearranged trades that spurred a modest price rise on successive days. Next, prosecutors wrote, Shalon and Aaron sent spam e-mails touting the stock and its price rise to millions of potential investors they’d identified in their earlier hacks of banks and brokerages.