Tag Archive for: scheme

Russian tech tycoon heads to trial in Boston over alleged insider trading and hacking scheme

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Between 2018 and 2020, prosecutors allege, Klyushin and his co-conspirators viewed the earnings reports of dozens of companies — including Tesla, Hubspot, Datadog, and Snap — before they were made public, and used that information to make stock trades that led to millions of dollars in illegal profits.

“This is sort of like insider trading on steroids,” said attorney Robert Fisher, a former federal prosecutor, adding that insider trading cases generally involve information related to one company or a sliver of an industry. Hacking into a vendor with access to multiple companies is rarer and much more lucrative, he said; an SEC complaint filed in federal court in Boston alleges the conspirators raked in $82.5 million.

Now, Klyushin, a married father of five, is set to go to trial Monday in federal court in Boston on charges of conspiracy, wire fraud, unauthorized access to computers, and securities fraud, in a case that will be closely watched in diplomatic circles in the United States and Russia, according to legal experts. Klyushin owns a Moscow-based technology company, M-13, that provides media monitoring and cybersecurity testing for private and public entities, including the Russian Federation, and has “significant ties to the Russian government, and, more specifically, to parts of the Russian government engaged in defense and counter-espionage,” prosecutors said in court filings.

In response to defense concerns about whether Klyushin will receive a fair trial, US District Judge Patti B. Saris has agreed to question potential jurors about whether they feel any bias toward Russian nationals, but rejected a request to ask them about their feelings on the war in Ukraine. She also ruled that prosecutors may not mention Putin’s name during the trial.

Klyushin was first arrested in March 2021 after he arrived via a chartered jet in Switzerland, where a helicopter was waiting on the tarmac to whisk him and his family to a nearby luxury ski resort for a planned vacation. Local police swooped in at the request of US authorities. His codefendants were in Russia, a country with no extradition treaty with the United States; Swiss authorities extradited Klyushin to the United…

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SEC Charges 18 with Microcap Securities Scheme

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Traditional “Pump and Dump” schemes involve stimulating investor interest in low-cost (typically less than $1 per share) stock using press releases, cold calls, and social media advertising to spread false or misleading information about the issuing company. As the U.S. Securities and Exchange Commission (“SEC”) warns on its “Investor.gov” website, “fraudsters typically …[seek] to create a buying frenzy that will ‘pump’ up the price of a stock and then ‘dump’ [i.e. sell] …their own shares at the inflated price.” See my July 25, 2022, blog “Mony a Mickle Maks a Muckle: SEC Charges Foreign Nationals with Two Microcap Frauds,” where the prices of the low-priced stock (generally called “microcap” securities or “penny stock”) were inflated because of undisclosed promotional campaigns, followed by carefully organized selling operations at the peak prices by the miscreants. Now comes a major technological innovation to such a scheme (the “Hack Attack”), where there is only limited need to expend the time, money, or efforts on a promotional campaign to raise the stock price; the retail investors do not have to be induced to actually buy the “dumped” stock.

On Monday, August 15, 2022, the SEC filed a Complaint (the “Complaint”) in the Federal Court for the Northern District of Georgia, Atlanta Division, charging 13 individuals, five entities, and two relief defendants with i) illegally accessing at least 31 retail brokerage accounts in the U.S. in late summer of 2017 and in early 2018; and ii) causing those accounts to purchase the securities of two microcap securities: Lotus Bio-Technology Development Corp., a Nevada corporation based in Port Coquitlam, British Columbia, Canada, after moving from Point Roberts, Washington (“LBTD”); and Good Gaming, Inc., f/k/a HDS International Corp., also a Nevada corporation based in Kennett Square, Pennsylvania (“GG”). The stock of each company is quoted on the OTC Link operated by OTC Markets Group, Inc. For a detailed description of the OTC Market Group, Inc., and the OTC Link, see my Oct. 29, 2020, Blog “Keeping Securities Disclosures in the Pink: Amendments to SEC Rule 15c2-11.” LBTD…

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Russians Hacked JFK Airport Taxi Dispatch in Line-Skipping Scheme

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We at WIRED are winding down for the year and gearing up for what is sure to be an eventful 2023. But 2022 isn’t going down without a fight. 

This week, following a new surge in mayhem at Twitter, we dove into exactly why the public needs real-time flight tracking, even if Elon Musk claims it’s the equivalent of doxing. The crucial transparency this publicly available data provides far outweighs the limited privacy value that censoring would give to the world’s rich and powerful. Unfortunately, Musk’s threats of legal action against the developer of the @ElonJet tracker are having broader chilling effects. 

Meanwhile, Iran’s internet blackouts—a response to widespread civil rights protests—are sabotaging the country’s economy, according to a new assessment from the US Department of State. Due to heavy sanctions on Iranian entities, the exact economic impact of Tehran’s internet blackouts is difficult to calculate. But experts agree it’s not good. 

You may have encountered the Flipper Zero in a recent viral TikTok video—but don’t believe everything you see. WIRED’s Dhruv Mehrotra got his hands on the palm-size device, which packs an array of antennas that allow you to copy and broadcast signals from all types of devices, like RFID chips, NFC cards, and more. We found that while the Flipper Zero can’t, say, make an ATM spill out money, it allows you to do plenty of other things that could get you into trouble. But mostly, it allows you to see the radio-wave-filled world around you like never before.

But that’s not all. Each week, we round up the security stories we didn’t cover in-depth ourselves. Click on the headlines to read the full stories. And stay safe out there. 

Between long hours, medallion costs, and the rise of Uber and Lyft, the life of a New York City cab driver is hard enough. Now it seems that Russian hackers—and a couple of their enterprising partners in Queens—were trying to get their own cut of those drivers’ fares.

According to prosecutors, two Queens men, Daniel Abayev and Peter Leyman, worked with Russian hackers to gain access to the taxi dispatch system for New York’s JFK airport. They then allegedly created a group…

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Ring Cameras Hacked in ‘Swatting’ Scheme

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The Department of Justice said on Monday that two men have been charged in a scheme that involved hacking Ring security cameras outside homes, drawing and sometimes taunting police, and then broadcasting the antics on social media.


Bloomberg / Contributor I Getty Images

Ring cameras.

Amazon bought security company Ring in 2018, and the product quickly became one of the company’s “signature” security products for the home, per The Guardian. Ring offers products like doorbells, security cameras and home security systems, with relevant data and controls accessible through the company’s app.

Critics and researchers say the Ring cameras are used to surveil gig economy drivers and delivery people and that they give law enforcement too much power to survey everyday life.

Related: Report Reveals Controversy Surrounding Video Doorbells — and Why Delivery Drivers Don’t Like Them

It’s unclear what the men’s motivation was. The two charged are Kya Christian Nelson, who is 21, from Racine, Wisconsin and “currently incarcerated in Kentucky in an unrelated case,” per the DOJ, and James Thomas Andrew McCarty, who is 20 and from Charlotte, North Carolina.

In this case, the two men used the Ring cameras to do something known as “swatting,” where one pretends there is an emergency to draw a large group of police or other first responders.

The pair would hack people’s Yahoo email accounts, then their Ring accounts, find their addresses, call law enforcement to the home with a bogus story, and then stream police’s response to the call. Often, they would harass the first responders at the same time using Ring device capabilities.

For example, “A hoax telephone call was placed to the West Covina [California] Police Department purporting to originate from the victim’s residence and posing as a minor child reporting her parents drinking and shooting guns inside the residence of the victim’s parents,” the Justice Department wrote.

The pair conducted this scheme a dozen times across the country in a one-week span, the department noted. The two men were indicted by a grand jury. Nelson faces two counts of accessing a computer without…

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