One busy fraudster – Man charged with hacking securities accounts for $1M; IRS fraud scheme

Russian national charged with stealing from E*Trade, Fidelity, Schwab and the IRS

If the charges ring true, this guy was one piece of online criminal work.

First, the FBI this week charged Russian national Petr Murmylyuk, aka "Dmitry Tokar," 31, of Brooklyn, New York for his alleged role in a ring that stole approximately $1 million by hacking into and stealing $1 million total from finance companies Fidelity, Scottrade, E*Trade, and Schwab.

According to the complaint: Beginning in late 2010, Murmylyuk worked with others to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab, and other brokerage firms. Members of the ring first gained unauthorized access to the online accounts and changed the phone numbers and e-mail addresses on file to prevent notice of unauthorized trading from going to the victims, the FBI said.

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Once the hackers controlled the accounts, they used stolen identities to open additional accounts at other brokerage houses. They then caused the victims' accounts to make unprofitable and illogical securities trades with the new accounts-referred to in the complaint as the "profit accounts"-that benefitted the hackers, the FBI said.

One version of the fraud involved causing the victims' accounts to sell options contracts to the profit accounts, then to purchase the same contracts back minutes later for up to nine times the price. In another version of the fraud, they used the profit accounts to offer short sales of securities at prices well over market price and to force the victim accounts to make irrational purchases.

Murmylyuk and a conspirator recruited foreign nationals visiting, studying, and living in the United States-including Russian nationals and Houston residents Anton Mezentsev, Galina Korelina, Mikhail Shatov, and others-to open bank accounts into which illegal proceeds could be deposited. Murmylyuk and the conspirator then caused the proceeds of the sham trades to be transferred from the profit accounts into those accounts, where the stolen money could be withdrawn.  Mezentsev, Korelina, and Shatov were previously charged and convicted of conspiracy to commit wire fraud based on their agreement to receive stolen money in the accounts in their names. Mezentsev, Korelina, and Shatov were sentenced to 27 months, 14 months, and 14 months in prison, respectively, earlier this year.

The FBI noted too that Murmylyuk is also accused of placing a telephone call to Trade Station Securities in which he claimed to be "Dmitry Tokar," through whose brokerage account the ring placed approximately $200,000 in fraudulent securities trades. Murmylyuk was arrested in Brooklyn on November 3, 2011, in possession of a laptop that evidenced the fraud.

Specifically Murmylyuk is charged with one count of conspiracy to commit wire fraud, unauthorized access to computers, and securities fraud. The US Securities and Exchange Commission (SEC) is also filing a parallel civil action. If convicted, Murmylyuk faces a maximum potential penalty of five years in prison and a $250,000 fine.

"Hackers continue to find new and advanced ways to steal from the financial sector," said First Assistant U.S. Attorney J. Gilmore Childers. "Through the illusion of legitimacy, these alleged hackers controlled both sides of securities transactions to game the market and drain their victims' accounts.

But apparently hacking was only one Murmylyuk's alledged nefarious activities.  Manhattan District Attorney Cyrus R. Vance, this week also announced the indictment of Murmylyuk on charges of submitting phony tax returns in the names of hundreds of victims to the Internal Revenue Service to steal their tax refunds.

"The defendant is accused of stealing the personal identifying information of more than 300 people by creating a fake job placement website, and falsifying wage information on the false tax returns to generate the refunds. He recruited a network of eleven Kazakh student visa-holders, also charged in the indictment unsealed today, to open bank accounts to receive the unauthorized refunds. 

Murmylyuk is charged with scheme to defraud, Money laundering, grand larceny, identity theft, and computer trespass, among other charges; ten of the eleven other defendants are charged with criminal facilitation, and one is charged with criminal possession of stolen property for making ATM withdrawals from an account funded by fraudulent tax refunds, the district attorney stated.

According to documents filed in court, Murmylyuk created a fake employment-related website with the address www.jobcentral2.net.  The site offered fictitious job placement services through a program it claimed was "sponsored by the government and intended for people with low income."  Murmylyuk  sent e-mails with a link to his fake website through legitimate job search forums and college listservs and, in the weeks that followed, hundreds of people visited his site and submitted personal identifying information, according to the district attorney

He is accused of collecting the information submitted to his website, and using it to forge tax returns in victims' names. Using an e-filing vendor, the defendant claimed fraudulent refunds ranging from approximately $3,500 to $6,500 each. MURMYLYUK successfully obtained refunds in the names of 108 of the approximately 300 different victims who had visited www.jobcentral2.net, yielding more than $450,000 in stolen taxpayer funds, the District Attorney stated.

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