Extradited Americans accuse Russian financial data thief • The Register

The Massachusetts attorney’s office on Monday announced the extradition of Vladislav Klyushin, a Russian business executive with ties to the Kremlin on charges of hacking U.S. computer networks and fraud in securities trading in undisclosed financial data.

Klyushin, 41, from Moscow, Russia, was arrested in Sion, Switzerland on March 21, 2021, would have disembarking from his private jet while on vacation with his family. The following month, Russia requested that he be returned home, and almost two weeks later, the United States requested that he be returned to America for trial. The Swiss rejected Russia’s request to be incompatible with its laws and ultimately accepted the American request.

Monday, the Ministry of Justice unsealed charges against Klyushin ahead of his scheduled court appearance. Federal government accuses him of conspiring to gain unauthorized access to computers and to commit wire and title fraud, and to gain unauthorized access to computers, and then to commit wire fraud and on titles.

Klyushin, also spelled “Kliushin,” said in the government complaint [PDF] being the owner of the M-13 penetration testing company, is one of the five co-accused. The others, still at large, are: Ivan Ermakov, 35, from Moscow, former officer in the Main Russian Intelligence Directorate (GRU); Nikolai Rumiantcev, 33, from Moscow; Mikhail Vladimirovich Irzak, 43, from St. Petersburg, Russia; and Igor Sergeevich Sladkov, 42, from St. Petersburg.

Ermakov, also spelled “Yermakov”, is one of the seven suspected agents of the GRU indicted by the Ministry of Justice in October 2018, with hacking, wire fraud, aggravated identity theft and money laundering linked to the 2016 US election and disinformation operations targeting sports and anti-doping organizations.

M-13, according to the US government complaint, provided computer and media monitoring services, cybersecurity advice and penetration testing, and claimed prominent Russian government officials and agencies as clients. The company also reportedly offered investment management in return for 60% of investors’ profits – a particularly attractive rate unless extraordinary profits are assured.

Between January 2018 and around September 2020, Klyushin, Ermakov and Rumiantcev allegedly conspired with others to gain access to the computer networks of two U.S. companies authorized to file electronic documents with the SEC on behalf of corporate clients. The defendants allegedly used stolen employee credentials, associated with the networks of the two depository companies, to gain access to the financial information of hundreds of publicly traded companies before it was released.

“Armed with these reports, which contained important non-public information, the defendants further conspired to enrich themselves by trading in the securities of these companies,” the complaint said. “Thanks to this ploy, the defendants have made tens of millions of dollars in illegal profits.”

The defendants allegedly bought the shares of companies reporting positive results and sold short the shares of those planning to publish negative results. They are said to have bought or sold shares of Snap, Cytornx Therapeutics, Horizon Therapeutics, Puma Biotechnology, Synaptics, Capstead Mortgage, SS&C Technologies, Roku, Avnet and Tesla, among others.

Boiler room scam

The separate complaint against Irzak and Sladkov [PDF] describes similar transactions in non-public information involving some of the aforementioned companies as well as others, including, but not limited to: Grubhub, Patterson UTI-Energy, Ultra Clean Holdings, CNH Industrial NV, Getty Realty, Essendant, Tandem Diabetes Care, Kohl’s, Box, IBM and The Nielsen Company.

The program is said to have brought in tens of millions of dollars to participants. According to the affidavit of FBI agent BJ Kang [PDF], Irzak and Sladkov made deals involving 149 companies before the results were announced and achieved a 66% success rate, accurately anticipating whether the relevant share price would rise or fall.

The charges against Klyushin – the sole of the alleged conspirators currently in custody – carry potential maximum penalties, if convicted, of: five years for conspiring to gain unauthorized access to a computer and commit electronic fraud and securities fraud; five years for unauthorized access to a computer; and 20 years each for securities and wire fraud. Per-count penalties also include up to three years of supervised release, potential fines of $ 250,000 or double the gross gain or loss, and provisions for restitution and forfeiture.

Following the Swiss court’s decision to send Klyushin to the United States and the dismissal of Klyushin’s appeal, Russia’s Foreign Ministry via Twitter last week expressed its dissatisfaction with the legal process.

“We are deeply disappointed with the decision handed down in Switzerland on the extradition of Russian citizen Vladislav Klyushin to the United States,” the ministry said. noted last week, noting that the Swiss had rejected the Russian Attorney General’s request to return Klyushin to Russia and instead accepted “the highly questionable US allegations.” ®

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