5 Indicted In Largest Credit Card Fraud Case In US History

Michael Teague |

A Federal court in Newark, New Jersey on Thursday announced the indictment of five men for their roles in what is being called the largest fraud case of its kind in US history.

The indictment included four Russian nationals and one Ukranian, all of whom are known as extremely sophisticated operators, and all of whom have been charged with taking part in a computer hacking conspiracy, as well as conspiring to commit wire fraud. An unindicted co-conspirator was also declared; Albert Gonzalez, a Miami man, is serving a 20 year prison sentence for his participation as one of the masterminds of the criminal operation after pleading guilty in 2010.

The five men, along with a total of four co-conspirators, are accused of stealing upwards of 160 million credit card numbers that eventuated in losses of over $300 million. The hackers targeted such companies as Visa Inc. (V) , 7-11 (TYO: 3382), JetBlue Airways (JBLU) , JCPenney Co. (JCP) , Heartland Payment Systems Inc. (HPY) , Belgium’s Dexia Bank (DXBGF) , and the largest French retailer, Carrefour SA (CRERF) in a scheme that involved taking customer credit card information and selling the data, called “dumps,” to resellers (“dump resellers”), who peddle the information to a “cashier” whose job it is to encode the data onto blank plastic cards from which debit accounts could then be emptied of their contents.

The defendants are also alleged to have used spyware to steal user login information from the NASDAQ website in May of 2007.

The hardest-hit victims in the spree, which lasted from approximately 2005 to 2012, were Heartland Payment Systems, a US payment processor from whom the hackers managed to cull 130 million credit card numbers for losses totaling some $200 million. Another payment processor, Global Payment Systems, had nearly 1 million card numbers stolen at a loss of about $93 million, while Carrefour SA was hit for 2 million credit cards.

While Thursday’s indictment names 9 individuals between the defendants and their co-conspirators, it is believed that dozens or potentially hundreds of individuals were wittingly involved in the cyber-heist. Former Federal cybercrimes prosecutor Mark Rasch said in an interview with Reuters that the as-yet unknown individuals could have operating the hacking ring from computers across the globe. But Rasch was also optimistic, saying that the arrests and subsequent indictment are an indication that law enforcement is catching up with an increasingly sophisticated, and increasingly common, type of crime.

[Image Courtesy of Wikimedia Commons]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
HPY Heartland Payment Systems Inc n/a n/a n/a 0
JBLU JetBlue Airways Corporation 17.53 -0.55 -3.02 6,824,648
JCP J.C. Penney Company Inc. Holding Company 8.45 0.08 0.96 14,017,187
RYNL Reynaldos Mexican Food Co 0.00 0.00 0.00 0
V Visa Inc. 81.83 -0.20 -0.24 6,676,323


Emerging Growth

H-Source Holdings Ltd.

H-Source Holdings Inc. is a technology company operating within the healthcare industry through its subsidiary, H-Source, Inc. The Company has developed a transaction platform that provides a private, secure and…

Private Markets


Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

Dropbox, Inc.

Dropbox is a service that allows their users to bring all photos, docs, and videos anywhere, and share them easily. Any file saved to Dropbox will automatically save to all…