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Press Release For Immediate Release June 20, 2001	U.S. Department of Justice United States Attorney Central District of California Thom Mrozek, Public Affairs Officer (213) 894-6947 thom.mrozek@usdoj.gov www.usdoj.gov/usao/cac

 

RUSSIAN COMPUTER HACKER INDICTED IN CALIFORNIA FOR BREAKING INTO COMPUTER SYSTEMS AND EXTORTING VICTIM COMPANIES

SANTA ANA, Calif. – A federal grand jury today indicted a Russian computer hacker on a host of federal charges for allegedly breaking into computer systems, stealing credit card information and attempting to extort payments from the victim companies for "computer security services."

Alexey V. Ivanov, of Chelyabinsk, Russia, was named in an indictment that charges him with eight counts of wire fraud, two counts of extortion, four counts of unauthorized computer intrusions and one count of possessing usernames and passwords for an online bank. Ivanov, 20, is currently in federal custody in Rhode Island awaiting trial on related charges in Connecticut.

The indictment alleges that Ivanov and other international hackers gained unauthorized access into CTS Network Services, a San Diego-based Internet Service Provider. Ivanov allegedly used a stolen credit card number to open an account with CTS, and once inside the company’s computers he hacked the systems to gain control of the computers.

Ivanov used CTS computers to launch a series of computer attacks against e-commerce companies, including two credit card processors – Sterling Microsystems of Anaheim and Transmark of Rancho Cucamonga – and NaraBank of Los Angeles, according to the indictment. Ivanov allegedly stole customer financial information, such as credit card and bank account numbers, and used this information in fraud schemes perpetrated against United States citizens.

"Given the importance of computers in everyday life, hackers and cyber-extortionists pose one of the most significant challenges to law enforcement," said United States Attorney John S. Gordon. "The Justice Department and the FBI will continue to devote significant resources to ensure that this nation’s computer systems are protected and that those who commit crimes on the electronic frontier are apprehended and prosecuted."

The indictment also alleges that after gaining access to protected computers and stealing financial information from Sterling Microsystems, Ivanov attempted to extort money from Sterling Microsystems to pay for "security services." All of the victim companies have fully cooperated with the FBI during the investigation.

Ivanov and his partner, 25-year-old Vasili Gorchkov, were arrested in Seattle after traveling to the United States during an investigation by the FBI. Ivanov and Gorchkov, who is awaiting trial on similar charges in Seattle, came to the United States for a "job interview" with Seattle-based computer security company called Invita. However, Invita was in fact an undercover FBI company that allowed investigators to obtain evidence needed to charge the two Russians.

"This case is evidence of a new generation of FBI agents with expertise in information technology, system intrusion and Internet fraud," said James V. DeSarno Jr., the Assistant Director in Charge of the FBI’s Los Angeles Field Office. "In addition, it demonstrates the FBI’s commitment to staying abreast of hacking trends and techniques, to combat sophisticated cybercriminals, and to infiltrate their criminal enterprises in the United States and abroad."

In addition to the charges brought today in California, Ivanov faces computer intrusion and fraud charges in Seattle and Connecticut (Gorchkov has been charged in Seattle).

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Ivanov will be arraigned in federal court in Santa Ana after the charges in New Haven and Seattle have been resolved. If convicted of all 15 counts in the indictment, Ivanov faces a maximum possible penalty of 90 years in federal prison.

This case is the result of an ongoing investigation by the Federal Bureau of Investigation. The computer system vulnerabilities exploited by Ivanov were the subject of a National Infrastructure Protection Center (NIPC) advisory released in December 2000 and March 2001 (Advisories 00-060 and 01-003).

CONTACT: Assistant United States Attorney Arif Alikhan
Computer Crime Coordinator
(213) 894-2476

Assistant United States Attorney David S. Lavine
(714) 338-3593

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• More information on:  Ivanov's Sentence
• More information on:  Gorshkov's Sentence
• More information on:  Gorshkov's Conviction
• More information on:  Computer Crime
• More information on:  Computer Crime Cases
• More information on:  Ivanov's charges in Connecticut
• More information on: Ivanov's charges in Sacramento, California

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