The United States authorities have sentenced Ukrainian hacker Vadym Iermolovych, 29, to two-and-a-half years in prison, three years of post-prison supervision, and restitution of $3 million for involvement in an international cybercrime scheme.
The sentence was imposed on May 22 in the Newark Federal Court, New Jersey.
Iermolovych took part in hacking into three business newswires, stealing yet-to-be published press releases containing nonpublic financial information, and then using that information to make trades that generated approximately $30 million in illegal profits.
Earlier, the police arrested and charged five other members of the hacking group – two computer hackers and three securities traders. They are Ivan Turchynov, 29, Oleksandr Ieremenko, 25, and Pavel Dubovoy, 34 — all three Ukrainians; and also Arkadiy Dubovoy, 52, and Igor Dubovoy, 30, both of Alpharetta, Georgia.
Between February 2010 and August 2015, computer hackers based in Ukraine gained unauthorized access to the computer networks of the newswires. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks.
The hackers stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential information about hundreds of companies that worked with the newswires.
The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. Then they shared by email instructions on how to access and use the overseas servers.
The traders paid the hackers for access to the servers based, in part, on a percentage of the money the traders made from their illegal activities. The hackers and traders used foreign shell companies to share out the profits.
Ukrainian cyber criminals are infamous for using their computer skills in large-scale hacking attacks.
In December, EU and U.S. officials shut down a cybercrime group called Avalanche, which was accused of stealing hundreds of millions of dollars worldwide, putting five key suspects in custody — three of whom were Ukrainians. However one of them, the alleged head of the the organization, was mistakenly released by Ukrainian authorities.
Popular U.S. torrent tracker KickassTorrent was allegedly also run by a Ukrainian — Artem Vaulin, a 30-year-old from Kharkiv. He was arrested on July 20 in Poland and was charged with criminal copyright infringement and money laundering.
Kyiv Post staff writer Denys Krasnikov can be reached at [email protected].
