Russian Father-Son Team Accused of Online Fraud by U.S.
January 30, 2012, 1:02 PM ESTBy Patricia Hurtado
(Updates with not guilty plea in sixth paragraph.)
Jan. 17 (Bloomberg) -- A Russian father and son from Moscow were charged by federal prosecutors in New York with taking part in a scheme to gain illegal computer access to U.S. bank accounts through bogus e-commerce websites.
Vladimir Zdorovenin and his son, Kirill, were named in an indictment unsealed today in federal court in Manhattan that alleges they and unknown others controlled U.S.-registered companies. The two men also operated a business that bought and sold securities.
The defendants took unauthorized charges on customers’ credit cards, prosecutors said. They also got credit-card numbers by either buying them from unidentified people who had obtained them illegally or by so-called malware the defendants surreptitiously installed on victims’ computers, the U.S. alleged.
“Mr. Zdorovenin’s egregious behavior illustrated the true colors of the cyber underground, as he and his son allegedly defrauded consumers of hundreds of thousands of dollars,” Janice K. Fedarcyk, the head of the FBI’s New York office, said in a statement. “This should serve as a stark reminder to anyone who believes he can commit cyber crime and hide behind the safety and anonymity of a Russian IP address; you are not beyond the reach of the FBI.”
Vladimir Zdorovenin was arrested last March in Zurich and arrived in New York yesterday following his extradition by Swiss authorities, Manhattan U.S. Attorney Preet Bharara’s office said in a statement. His son remains at large, the U.S. said.
At his arraignment today before U.S. Magistrate Judge Gabriel Gorenstein, Vladimir Zdorovenin pleaded not guilty to the charges through his lawyer, Sabrina Shroff. She declined to comment on the case after court. Assistant U.S. Attorney James Pastore, who is prosecuting the case, said U.S. District Judge Paul Gardephe scheduled a Jan. 19 conference in the case.
Internet Companies
The Zdorovenins held out U.S.-registered companies Sofeco LLC, Pintado LLC and Tallit LLC as legitimate Internet merchants with websites that prosecutors said appeared to offer goods and services, according to the U.S.
They also engaged in a scheme from June 2004 to February 2005 to gain access to accounts of U.S. victims and attempted to transfer hundreds of thousands of dollars into bank accounts they controlled at JPMorgan Chase & Co. and a company identified as Asia Europe America’s Bank, prosecutors said.
The defendants, through Rim Investment Management Ltd., maintained an account at Ameritrade Inc. and bought and sold securities in publicly traded companies, prosecutors said.
Securities Sold
The two men are accused of committing securities fraud by buying and selling thousands of shares of companies including Terayon Communications Systems Inc. and Internet Capital Group Inc. by trading in the accounts of U.S. victims, prosecutors said. They bought and sold securities in the same companies in their Rim account at Ameritrade, manipulating and earning profits they wouldn’t otherwise have made, the U.S. said.
The indictment describes meetings in July 2004 between the Zdorovenins and unidentified others in Cyprus. Unnamed co- conspirators transferred almost $300,000 from the financial- services account of a person in the U.S. to a bank account controlled by the Zdorovenins.
“Cybercrime is a pandemic that makes geography meaningless,” Bharara said in the statement. “From far away, with the click of a mouse, the cybercriminal can victimize millions of people in the U.S. As alleged, Vladimir Zdorovenin and his son did exactly that.”
The case is U.S. v. Zdorovenin, 07-cr-00440, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Michael Hytha, Andrew Dunn
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
