Department of Justice

U.S. Attorney’s Office

Eastern District of Oklahoma

---

FOR IMMEDIATE RELEASE

Monday, September 12, 2016

Durant Man Sentenced To 6 Months Home Detention For Theft Of Gaming Establishment

MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that CHARLES BLAIR SMALLWOOD, age 24, of Durant, Oklahoma, was sentenced to 6 months of home detention and 4 years of probation for THEFT BY OFFICERS OR EMPLOYEES OF GAMING ESTABLISHMENT ON INDIAN LANDS, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(B) and 2250(a)(3).

The charge arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.  The defendant was indicted in March, 2016 and pled guilty in April, 2016.

The Indictment alleged that from in or about December 2014, to on or about August 17, 2015, in the Eastern District of Oklahoma, the defendant, while an employee of the Choctaw Nation Casino and Resort, in Indian Country, did embezzle, abstract, purloin, willfully misapply, and take and carry away with intent to steal any moneys, funds, assets, or other property in excess of $1,000.00 belonging to the Choctaw Nation Casino and Resort, an Indian gaming establishment operated by the Choctaw Nation of Oklahoma pursuant to an ordinance or resolution approved by the National Indian Gaming Commission.

The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.

Assistant United States Attorney Kristin Harrington represented the United States.

Microsoft Raids Tackle Online Crime

Excerpt from an article in

The New York Times

Monday, March 26, 2012

Microsoft Raids Tackle Online Crime

By NICK WINGFIELD and NICOLE PERLROTH

SEATTLE — Microsoft employees, accompanied by United States marshals, raided two nondescript office buildings in Pennsylvania and Illinois on Friday, aiming to disrupt one of the most pernicious forms of online crime today — botnets, or groups of computers that help harvest bank account passwords and other personal information from millions of other computers.

With a warrant in hand from a federal judge authorizing the sweep, the Microsoft lawyers and technical personnel gathered evidence and deactivated Web servers ostensibly used by criminals in a scheme to infect computers and steal personal data. At the same time, Microsoft seized control of hundreds of Web addresses that it says were used as part of the same scheme.

The sweep was part of a civil suit brought by Microsoft in its increasingly aggressive campaign to take the lead in combating such crimes, rather than waiting for law enforcement agencies to act. The company’s targets were equipment used to control the botnets, which criminals, known as bot-herders, use for ill intent.

Microsoft has a big interest in making the Internet a safer place. Despite inroads made by Apple and others in some parts of the technology business, Microsoft’s Windows operating system still runs the vast majority of the computers connected to the Internet. The prevalence of its software has made Windows the most appealing target for online criminals, and the security holes they discover in the software are a persistent nuisance for Windows users.

Microsoft’s involvement in what had been considered largely a law enforcement function — fighting computer crime — is the brainchild of Richard Boscovich, a former federal prosecutor who is a senior lawyer in Microsoft’s digital crimes unit. That group watches over fraud that could affect the company’s products and reputation.

'Hacktivists' Lead Data Breach Threats, Study Finds

A tiny but motivated band of 'hacktivists' are supplanting professional criminals as the biggest single data breach threat to large enterprises, an analysis of hundreds of confirmed incident reports has found.

On the face of it, the numbers in Verizon's 2012 Data Breach Investigations Report (which covers 2011) suggest that hacktivism is more of a nuisance than a major threat, accounting for only 3 percent of the 855 recorded attacks looked at across several countries.

But despite the modest volume of attacks, hacktivist incidents often lead to far more spectacular losses. Verizon found that from a total of 174 million records (individual database entries as well as documents) compromised in the 855 incidents, 100 million were stolen by hacktivists.

This means that hactivism is a theme in only three out of every 100 incidents, but nearly six out of ten of the actual records that are compromised. (See also "Ten Best Practices to Prevent Data and Privacy Breaches.")

For more, click the link below:


http://www.pcworld.com/article/252429/hacktivists_lead_data_breach_threats_study_finds.html#tk.nl_bdx_h_crawl

Armenian Power Member and Three Armenian Power Associates Convicted in Los Angeles for Roles in Identity Theft Ring 

U.S. Department of JusticeMarch 22, 2012

Office of Public Affairs(202) 514-2007/TDD (202) 514-1888

WASHINGTON—After a five week trial, four defendants have been convicted for their roles in one of the largest bank fraud and identity theft schemes in California history, with dozens of victims in four states and millions of dollars in losses.

The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Andre Birotte, Jr. of the Central District of California; Assistant Director in Charge of the FBI’s Los Angeles Field Office Steven Martinez; and Special Agent in Charge of the U.S. Secret Service (USSS) Joseph Beaty.

Arman Sharopetrosian, Karen Markosian, Artush Margaryan, and Kristine Ogandzhanyan were found guilty of conspiring to commit bank fraud, attempted bank fraud, and various counts of aggravated identity theft. Sharopetrosian, Markosian, and Ogandzhanyan waived a jury trial and consented to trial by the judge, and Margaryan proceeded with a jury trial.

Yesterday, U.S. District Judge David O. Carter found Ogandzhanyan, 28, of Burbank, California, guilty of one count of bank fraud conspiracy, two counts of attempted bank fraud, and four counts of aggravated identity theft. On March 16, 2012, the judge found Sharopetrosian, 33, of Burbank, guilty of one count of bank fraud conspiracy, four counts of bank fraud, and seven counts of aggravated identify theft. On March 16, 2012, the judge also found Markosian, 39, of Glendale, California, guilty of one count of bank fraud conspiracy, one count of attempted bank fraud, and two counts of aggravated identity theft. A jury convicted the fourth defendant, Artush Margaryan, 28, of Van Nuys, California, on March 16, 2012 of one count of bank fraud conspiracy, one count of attempted bank fraud, and three counts of aggravated identity theft.

Evidence was presented at trial that Sharopetrosian is a member of the Armenian Power organized crime group, and Margaryan, Markosian, and Ogandzhanyan are Armenian Power associates.

According to evidence presented at trial, Sharopetrosian directed the massive fraud scheme along with co-defendant Angus Brown while the two were incarcerated at Avenal State Prison. Using cellular telephones that were smuggled into the prison, Sharopetrosian and Brown worked from behind bars to coordinate with others, including Ogandzhanyn, Markosian, and Margaryan, to obtain confidential bank profile information and steal money from victim account holders. Often targeting high-value bank accounts, the defendants used account holders’ personal identifying information—including names, Social Security numbers, and dates of birth—to impersonate victims in phone calls to the bank. The defendants gathered account information, transferred funds between victims’ accounts, and placed unauthorized check orders for the accounts. They then stole the checks, obtained the victims’ signatures from public documents, and paid conspirators to cash the forged checks. Over the course of the six-year conspiracy, the defendants and their co-conspirators caused more than $10 million dollars in losses to victims in Southern California, Nevada, Arizona, and Texas.

“These defendants, including two individuals who were operating from a prison cell, perpetrated a massive fraudulent scheme on behalf of a dangerous criminal enterprise,” said Assistant Attorney General Breuer. “As members and associates of Armenian Power, they stole sensitive personal and financial information from innocent consumers and caused millions of dollars in losses. Whether organized criminal groups traffic in drugs, commit financial fraud or wreak other havoc to keep themselves going, they must be stopped. We are doing everything possible to shut down dangerous gangs like Armenian Power.”

“The safety and sanctity of confidential financial information is paramount in today’s society,” said U.S. Attorney Birotte. “Identity theft is a fundamental invasion of consumer privacy that cannot be tolerated. These convictions demonstrate that violators, whoever and wherever they may be, will be caught and will be prosecuted to the fullest extent of the federal law.”

“The defendants were convicted in a trial that uncovered a sophisticated and lengthy scheme that targeted victims in multiple states and included disturbing details, such as orders made from within prison walls and assistance from bank insiders enlisted by the defendants,” said FBI Assistant Director Martinez. “This case is also indicative of the growing trend of gang or organized crime-affiliated groups now engaging in identity theft and other financial crimes in furtherance of their enterprise.”

These defendants are four of 20 defendants who were charged with operating the bank fraud and identity theft scheme in one of a series of federal indictments unsealed on February 16, 2011. The indictments allege various federal crimes against members and associates of the Armenian Power criminal organization. To date, 19 of the 20 defendants charged in the bank fraud indictment have been convicted, including Brown. One defendant, Faye Bell, was arrested earlier this year and is still awaiting trial.

Sharopetrosian, Margaryan, Markosian, and Ogandzhanyan face maximum sentences of 30 years in federal prison for each count of bank fraud, 30 years for each count of conspiracy to commit bank fraud, and additional mandatory two year sentences for each count of aggravated identity theft.

Sentencing for all four defendants is scheduled for August 6, 2012 before Judge Carter.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada and Joseph McNally of the Central District of California and Trial Attorney Cristina Moreno of the Organized Crime and Gang Section in the Justice Department’s Criminal Division. The case was investigated by the Eurasian Organized Crime Task Force, which includes the FBI, the USSS, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service, and the U.S. Immigration and Customs Enforcement.

Why Hackers Set Their Sights on Small Business

If you run a small business, and think that none of your data was of interest to a hacker, consider this: what if a hacker could take stolen bank account or credit card information from your computer and package it with the same information from a hundred or a thousand other small businesses? Would it be worth something then?

"SMBs don't know how defenseless they've become, especially to automated and industrialized attack methodologies by organized crime," Christopher Porter tells PCWorld. Porter, a principal with the Verizon RISK Team, is the author of a new report from Verizon on security risk.

"[Hackers] scan the Internet, looking for remote access services, and then try the default credentials. Once they gain access, they automatically install keyloggers to collect password information [as it's typed in]," Porter says. "Then they send the information it out via e-mail or by uploading it to an FTP server or a web site. They aggregate the data and sell it on the black market."

Hackers could use the keylogger to figure out how access and drain a small business' bank account, but more commonly, Porter said, they'll target point-of-sale systems, as four Romanians did recently. "That kind of attack is increasing, because they're low-risk and low-cost attacks for organized crime." Because they're geographically widespread, it's hard for any one police department to follow up.

For more, click the link below: 

http://www.pcworld.com/businesscenter/article/252302/why_hackers_set_their_sights_on_small_businesses.html#tk.nl_bdx_h_crawl

Employee Theft

Former Cessna Employee Sentenced to 18 Months for Stealing Parts from Airplanes

U.S. Attorney’s Office March 05, 2012

District of Kansas (316) 269-6481

— filed under: Intellectual Property Theft, Press Release, White-Collar Crime

WICHITA, KS—A former Cessna employee has been sentenced to 18 months in federal prison for selling stolen aircraft parts on eBay, U.S. Attorney Barry Grissom said today. He also was ordered to pay $130,000 restitution.

Diego Alejandro Paz-Teran, 35, Wichita, Kansas, pleaded guilty to one count of interstate transportation of stolen property. In his plea, Paz-Teran admitted he stole aircraft parts from Cessna and sold them on eBay. According to court documents, the investigation began in November 2008 when an employee of a Rockwell Collins Company distributor saw a Collins AHC-3000 Attitude Reference Computer offered for sale on eBay for $9,000. Knowing that the part was valued at more than $45,000, he contacted the seller and asked for serial numbers. Cessna tracked the serial numbers to a part that was removed from an XLS Plus aircraft while it was being painted.

Investigators found other stolen aircraft parts being sold on the same eBay account and followed records on the account to Teran at his home in Wichita.

Grissom commended the U.S. Department of Transportation-Office of Inspector General, the Sedgwick County Sheriff’s Office, the Federal Bureau of Investigation, and Assistant U.S. Attorney Matt Treaster for their work on the case.

Six Hackers Charged

Six Hackers in the United States and Abroad Charged for Crimes Affecting Over One Million Victims 
Four Principal Members of “Anonymous” and “LulzSec” Charged with Computer Hacking and Fifth Member Pleads Guilty; “AntiSec” Member also Charged with Stealing Confidential Information from Approximately 860,000 Clients and Subscribers of Stratfor

U.S. Attorney’s OfficeMarch 06, 2012

Southern District of New York(212) 637-2600

Five computer hackers in the United States and abroad were charged today, and a sixth pled guilty, for computer hacking and other crimes. The six hackers identified themselves as aligned with the group Anonymous, which is a loose confederation of computer hackers and others, and/or offshoot groups related to Anonymous, including “Internet Feds,” “LulzSec,” and “AntiSec.”

RYAN ACKROYD, a/k/a “kayla,” a/k/a “lol,” a/k/a “lolspoon”; JAKE DAVIS, a/k/a “topiary,” a/k/a “atopiary”; DARREN MARTYN, a/k/a “pwnsauce,” a/k/a “raepsauce,” a/k/a “networkkitten”; and DONNCHA O’CEARRBHAIL, a/k/a “palladium,” who identified themselves as members of Anonymous, Internet Feds, and/or LulzSec, were charged in an indictment unsealed today in Manhattan federal court with computer hacking conspiracy involving the hacks of Fox Broadcasting Company, Sony Pictures Entertainment, and the Public Broadcasting Service (“PBS”). O’CEARRBHAIL is also charged in a separate criminal complaint with intentionally disclosing an unlawfully intercepted wire communication.

HECTOR XAVIER MONSEGUR, a/k/a “Sabu,” a/k/a “Xavier DeLeon,” a/k/a “Leon,” who also identified himself as a member of Anonymous, Internet Feds, and LulzSec, pled guilty on August 15, 2011 in U.S. District Court to a 12-count information charging him with computer hacking conspiracies and other crimes. MONSEGUR’S information and guilty plea were unsealed today. The crimes to which MONSEGUR pled guilty include computer hacking conspiracy charges initially filed in the Southern District of New York. He also pled guilty to the following charges: a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Eastern District of California related to the hacks of HBGary, Inc. and HBGary Federal LLC; a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Central District of California related to the hack of Sony Pictures Entertainment and Fox Broadcasting Company; a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Northern District of Georgia related to the hack of Infragard Members Alliance; and a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Eastern District of Virginia related to the hack of PBS, all of which were transferred to the Southern District of New York, pursuant to Rule 20 of the Federal Rules of Criminal Procedure, in coordination with the Computer Crime and Intellectual Property Section (“CCIPS”) in the Justice Department’s Criminal Division.

Late yesterday, JEREMY HAMMOND, a/k/a “Anarchaos,” a/k/a “sup_g,” a/k/a “burn,” a/k/a “yohoho,” a/k/a “POW,” a/k/a “tylerknowsthis,” a/k/a “crediblethreat,” who identified himself as a member of AntiSec, was arrested in Chicago, Illinois and charged in a criminal complaint with crimes relating to the December 2011 hack of Strategic Forecasting, Inc. (“Stratfor”), a global intelligence firm in Austin, Texas, which may have affected approximately 860,000 victims. In publicizing the Stratfor hack, members of AntiSec reaffirmed their connection to Anonymous and other related groups, including LulzSec. For example, AntiSec members published a document with links to the stolen Stratfor data titled, “Anonymous Lulzxmas rooting you proud” on a file sharing website.

The following allegations are based on the indictment, the information, the complaints, and statements made at MONSEGUR’s guilty plea:

Hacks by Anonymous, Internet Feds, and LulzSec

Since at least 2008, Anonymous has been a loose confederation of computer hackers and others. MONSEGUR and other members of Anonymous took responsibility for a number of cyber attacks between December 2010 and June 2011, including denial of service (“DoS”) attacks against the websites of Visa, MasterCard, and PayPal, as retaliation for the refusal of these companies to process donations to Wikileaks, as well as hacks or DoS attacks on foreign government computer systems.

Between December 2010 and May 2011, members of Internet Feds similarly waged a deliberate campaign of online destruction, intimidation, and criminality. Members of Internet Feds engaged in a series of cyber attacks that included breaking into computer systems, stealing confidential information, publicly disclosing stolen confidential information, hijacking victims’ e-mail and Twitter accounts, and defacing victims’ Internet websites. Specifically, ACKROYD, DAVIS, MARTYN, O’CEARRBHAIL, and MONSEGUR, as members of InternetFeds, conspired to commit computer hacks including: the hack of the website of Fine Gael, a political party in Ireland; the hack of computer systems used by security firms HBGary, Inc. and its affiliate HBGary Federal, LLC, from which Internet Feds stole confidential data pertaining to 80,000 user accounts; and the hack of computer systems used by Fox Broadcasting Company, from which Internet Feds stole confidential data relating to more than 70,000 potential contestants on “X-Factor,” a Fox television show.

In May 2011, following the publicity that they had generated as a result of their hacks, including those of Fine Gael and HBGary, ACKROYD, DAVIS, MARTYN, and MONSEGUR formed and became the principal members of a new hacking group called “Lulz Security” or “LulzSec.” Like Internet Feds, LulzSec undertook a campaign of malicious cyber assaults on the websites and computer systems of various business and governmental entities in the United States and throughout the world. Specifically, ACKROYD, DAVIS, MARTYN, and MONSEGUR, as members of LulzSec, conspired to commit computer hacks including the hacks of computer systems used by the PBS, in retaliation for what LulzSec perceived to be unfavorable news coverage in an episode of the news program “Frontline”; Sony Pictures Entertainment, in which LulzSec stole confidential data concerning approximately 100,000 users of Sony’s website; and Bethesda Softworks, a video game company based in Maryland, in which LulzSec stole confidential information for approximately 200,000 users of Bethesda’s website.

The Stratfor Hack

In December 2011, HAMMOND conspired to hack into computer systems used by Stratfor, a private firm that provides governments and others with independent geopolitical analysis. HAMMOND and his co-conspirators, as members of AntiSec, stole confidential information from those computer systems, including Stratfor employees’ e-mails as well as account information for approximately 860,000 Stratfor subscribers or clients. HAMMOND and his co-conspirators stole credit card information for approximately 60,000 credit card users and used some of the stolen data to make unauthorized charges exceeding $700,000. HAMMOND and his co-conspirators also publicly disclosed some of the confidential information they had stolen.

The Hack of International Law Enforcement

In January 2012, O’CEARRBHAIL hacked into the personal e-mail account of an officer with Ireland’s national police service, the An Garda Siochana (the “Garda”). Because the Garda officer had forwarded work e-mails to a personal account, O’CEARRBHAIL learned information about how to access a conference call that the Garda, the FBI, and other law enforcement agencies were planning to hold on January 17, 2012 regarding international investigations of Anonymous and other hacking groups. O’CEARRBHAIL then accessed and secretly recorded the January 17 international law enforcement conference call, and then disseminated the illegally-obtained recording to others.

***

MONSEGUR, 28, of New York, New York, pled guilty to three counts of computer hacking conspiracy, five counts of computer hacking, one count of computer hacking in furtherance of fraud, one count of conspiracy to commit access device fraud, one count of conspiracy to commit bank fraud, and one count of aggravated identity theft. He faces a maximum sentence of 124 years and six months in prison.

ACKROYD, 23, of Doncaster, United Kingdom; DAVIS, 29, of Lerwick, Shetland Islands, United Kingdom; and MARTYN, 25, of Galway, Ireland, each are charged with two counts of computer hacking conspiracy. Each conspiracy count carries a maximum sentence of 10 years in prison.

O’CEARRBHAIL, 19, of Birr, Ireland, is charged in the indictment with one count of computer hacking conspiracy, for which he faces 10 years in prison. He is also charged in the complaint with one count of intentionally disclosing an unlawfully intercepted wire communication, for which he faces a maximum sentence of five years in prison.

HAMMOND, 27, of Chicago, Illinois, is charged with one count of computer hacking conspiracy, one count of computer hacking, and one count of conspiracy to commit access device fraud. Each count carries a maximum sentence of 10 years in prison.

DAVIS is separately facing criminal charges in the United Kingdom, which remain pending, and ACKROYD is being interviewed today by the Police Central e-crime Unit in the United Kingdom. O’CEARRBHAIL was arrested today by the Garda.

The case is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York. The investigation was initiated and led by the FBI, and its New York Cyber Crime Task Force, which is a federal, state, and local law enforcement task force combating cybercrime, with assistance from the PCeU; a unit of New Scotland Yard’s Specialist Crime Directorate, SCD6; the Garda; the Criminal Division’s CCIPS; and the U.S. Attorneys’ Offices for the Eastern District of California, the Central District of California, the Northern District of Georgia, and the Eastern District of Virginia; as well as the Criminal Division’s Office of International Affairs.

The charges contained in the indictment and complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

News Release from the FBI - Kansas City Division

Note to visitors: The Palo-Negro-Blog is no longer being actively maintained.  For more current posts, please visit: http://JBK-BizTech.blogspot.com

Neosho Woman Pleads Guilty to Forged Checks
Stole $168,000 from Her Employer

U.S. Attorney’s Office February 29, 2012

Western District of Missouri (816) 426-3122

— filed under: Fraud, Press Release

SPRINGFIELD, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Neosho, Missouri woman pleaded guilty in federal court today to cashing forged checks as part of a scheme to steal $168,600 from her employer.

Irene M. Davis, 44, of Neosho, waived her right to an indictment and pleaded guilty before U.S. Magistrate Judge James C. England to a federal information that charges her with making, uttering and possessing forged securities.

Davis was employed at Ragland Mills, Inc., in Neosho, as the payroll and accounts payable clerk. From June 3, 2010 to April 15, 2011, she wrote a total of 20 checks on her employer’s bank account, totaling $167,539. Davis made the checks payable to herself and forged the signature of an authorized company representative to each check. In order to conceal her theft, Davis accessed the company’s accounting software and altered the payee lines of the forged checks to make them appear as though they had been made payable to a vendor with which Ragland Mills does business.

Davis also admitted that she stole approximately $1,061 from the company’s petty cash fund.
By pleading guilty today, Davis agreed to forfeit her interest in the 2007 Mercedes Benz that she purchased with stolen funds, which will be used to pay restitution.

Under federal statutes, Davis is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Robyn L. McKee. It was investigated by the FBI.

News Release from Panda Security

FEB 16, 2012

  1

News

One Bot To Rule Them All

• The Ainslot.L bot scans computers and removes any other bots it finds
• It spreads in a fake email purporting to come from UK clothing company CULT
• The message is very well crafted to avoid raising suspicion

PandaLabs, the anti-malware laboratory of Panda Security –The Cloud Security Company– has reported on a new bot called Ainslot.L. This malware is designed to log user activities, download additional malware and take control of the system. Additionally, it acts as a banker Trojan, stealing log-in information related to banks. It also scans the computer looking for and removing other bots so that it becomes the only bot on the system.

“The fact that Ainslot.L removes other bots from infected systems definitely caught our attention”, explained Luis Corrons, technical director of PandaLabs. “It eliminates all competition, leaving the computer at its mercy. It reminds us of the popular ‘Highlander’ movies, – There can be only one –.”

It spreads in a fake email purporting to come from UK clothing company CULT. The message, which is very well crafted, informs users that they have placed a £200 order on CULT’s online store and the invoice amount will be charged to their credit card. The text includes a link to view the order which actually downloads the bot onto the computer.

According to Corrons, “Phishing emails are not usually so well done. There is no doubt that this time fraudsters have been very careful to try to make these messages look as real as possible to get as many bites as they can”.

More information is available in the PandaLabs Blog.