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5 arrested for 'biggest hacking breach in US history'

Five men have been charged with hacking into major corporate networks in what is being dubbed the largest hacking data breach in US history.

New Jersey Attorney Paul J. Fishman unsealed an indictment on Thursday against four Russians and one Ukrainian that sees them facing jail terms of up to 30 years as well as millions of dollars in fines.

Fishman’s office released a statement that accused them of a “worldwide hacking and data breach scheme that targeted major corporate networks, stole more than 160 million credit card numbers, resulted in hundreds of millions of dollars in losses and is the largest such scheme ever prosecuted in the United States”.

Companies such as Nasdaq, 7-Eleven, JetBlue, and Carrefour, are among the victims with just three of them accounting for losses of $300 million (£195 million).

The charge sheet accuses Vladimir Drinkman, 32, and Alexandr Kalinin, 26, both from Russia, of focusing on gaining access to the corporation’s systems and getting past network security.

Roman Kotov, 32, also from Russia, worked on mining the networks compromised by Kalinin and Drinkman.

Ukrainian Mikhail Rytikov, 26, provided anonymous web services that shrouded the hackers’ activities in secrecy, with the fifth defendant, Russian Dmitriy Smilianets, 29, selling the information on and distributing the proceeds.

When it came to selling, it’s alleged that Smilianets sold to “trusted identity theft wholesalers” only. Prices were set at $50 for a European credit card number and associated data, or “dumps” as they are known, $10 for an American one and $15 for Canadian dumps.

All five defendants are accused of conspiracy to commit wire fraud that carries a maximum jail time of 30 years and a $1 million (£650,000) fine, as well as conspiracy to gain unauthorized access to computers that has a 5 year jail stretch and a $250,000 (£162,000) fine.

In addition, Drinkman, Kalinin, Kotov and Smilianets have been leveled with two charges, one of unauthorised access to computers and the other of wire fraud. The former carries a 5-year prison sentence and $250,000 with the latter a 30-year jail term and a $1 million fine.

On the same day, the Southern District of New York Attorney Preet Bharara unsealed a separate indictment. Kalinin, and another Russian Nikolay Nasenkov, is accused of hacking into computers used by the Nasdaq Stock Market between November 2008 and October 2010.

The two are accused of stealing bank account information from Citigroup Inc and PNC Financial Services Group Inc. by hacking into their systems.

“Cyber criminals are determined to prey not only on individual bank accounts, but on the financial system itself,” Bharara added in a statement.

Image: Flickr (ssalonso)