Hacker Who Helped Infect Million Computers Pleads Guilty

  • Gozi virus led to the theft of millions of dollars online
  • Latvia agreed to extradite hacker after U.S. struck by virus

A Latvian hacker pleaded guilty in New York to helping develop a virus that infected more than a million computers worldwide, tricking online banking customers into revealing passwords and other security information.

Deniss Calovskis, 30, faces as long as two years in prison under a plea deal reached with U.S. prosecutors after being extradited from Latvia in 2013. He could’ve been sentenced to as long as 10 years.

Calovskis, using a Russian-speaking interpreter, told a U.S. magistrate judge in Manhattan Friday that he “wrote a little part” of the virus code, which became known as the Gozi virus. It infected about 17,000 computers in the U.S., prosecutors said.

"I knew what I was doing was against the law," said Calovskis, wearing eyeglasses and blue prison garb. Calovskis spent 10 months in a Latvian jail before being sent to New York, though his lawyer said it’s unclear whether that will affect his sentence in the U.S.

Calovskis pleaded guilty to a single count of conspiracy to commit computer intrusion for helping build Gozi, which led to the theft of millions of dollars. If he’d gone to trial, he would’ve faced as long as 67 years behind bars on all the charges against him.

Web Injects

Calovskis developed “web injects” that changed the appearance of banking websites when viewed on infected computers, making Gozi more dangerous, the U.S. said. Victims were fooled into providing personal identification information that was used by others to steal from bank accounts, according to prosecutors.

Of the computers infected in the U.S., more than 160 belonged to NASA, prosecutors said. Gozi also infected computers in Germany, the U.K., Poland, France, Finland, Italy and Turkey, according to the U.S.

Prosecutors in the office of U.S. Attorney Preet Bharara in 2013 unsealed charges against Calovskis and two others, Mihai Ionut Paunescu and Nikita Kuzmin, for allegedly creating and distributing the Gozi virus.

Kuzmin, of Russia, began designing Gozi in 2005 to steal bank account information belonging to individuals and businesses and hired a co-conspirator to write the virus’s source code, prosecutors said in papers filed under seal in 2011. Kuzmin initially rented the virus to criminals before selling it to co-conspirators for a share of the stolen proceeds.

Kuzmin, who was arrested in 2010, pleaded guilty in May 2011 and agreed to cooperate with the government. Paunescu was arrested in Romania and the U.S. is seeking his extradition.

The case is U.S. v. Calovskis, 12-CR-487, U.S. District Court, Southern District of New York (Manhattan).

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