Hackers stole 41 million credit-cards in U.S.
Out of them three Ukrainians
Eleven people, including a U.S. Secret Service informant, have been charged in connection with the hacking of nine major retailers and the theft and sale of more than 41 million credit- and debit-card numbers, the Justice Department announced Tuesday, according to The Associated Press.
The data breach is believed to be the largest hacking and identity-theft case ever prosecuted by the Department of Justice, which said the suspects were charged with conspiracy, computer intrusion, fraud and identity theft.
Three of those charged are U.S. citizens, while the others are from places such as Estonia, Ukraine, Belarus and China.
The indictment returned Tuesday by a federal grand jury in Boston alleges that the suspects hacked into the wireless computer networks of retailers including TJX Cos., BJ`s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW and set up programs that captured card numbers, passwords and account information.
"They used sophisticated computer hacking techniques that would allow them to breach security systems and install programs that gathered enormous quantities of personal financial data, which they then allegedly either sold to others or used themselves," Attorney General Michael Mukasey said at a news conference. "And, in total, they caused widespread losses by banks, retailers and consumers."
Mukasey called the total dollar amount of the alleged theft "impossible to quantify at this point."
U.S. Attorney Michael J. Sullivan said that while most of the victims were in the United States, officials still haven`t identified all the people who had a card number stolen.
"I suspect that a lot of people are unaware that their identifying information has been compromised," he said.
Sullivan said the alleged thieves weren`t computer geniuses, just opportunists who used a technique called "wardriving," which involved cruising through different areas with a laptop and looking for accessible wireless Internet signals. Once they located a vulnerable network, they installed so-called "sniffer programs" that captured credit- and debit- card numbers as they moved through a retailer`s processing networks.
The information was stored on 2 servers in Ukraine and Latvia — one with more than 25 million credit- and debit-card numbers and another with more than 16 million numbers, Sullivan said.
The heist was a black eye for retailers like TJX. The company initially disclosed the data breach in January 2007 but said a few months later that at least 45.7 million cards were exposed to possible fraud in a breach of its computer systems that began in July 2005. Court filings by some banks that sued TJX put the number of cards affected at more than 100 million, based on estimates by officials with Visa and MasterCard, who were deposed in the suit.
In May, TJX said it won support from MasterCard-issuing banks for a settlement that will pay them as much as $24 million to cover costs from the breach. A similar agreement reached last November with Visa-card-issuing banks set aside as much as $40.9 million to help banks cover costs, including replacing customers` payment cards and covering fraudulent charges.
According to the indictments unsealed Tuesday, three of the defendants are U.S. citizens, one is from Estonia, three are from Ukraine, two are from China and one is from Belarus. One individual is known only by an alias online, and his place of origin is unknown.
In the Boston indictment, the alleged ringleader Albert "Segvec" Gonzelez of Miami was charged with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy. Gonzalez, who is in custody in New York, faces a maximum penalty of life in prison if he is convicted of all the charges.
Gonzalez was a U.S. Secret Service informant who helped the agency take over a Web site being used to transmit stolen identifiers and stolen credit-card numbers, Mark Sullivan, director of the U.S. Secret Service, said at the news conference.
"That was the first time ever that a computer system was wiretapped," he said.
But he said the Secret Service later found out that Gonzalez had also been feeding criminals information about ongoing investigations.