Second Russian Pleads Guilty in Largest U.S. Hacking Case

  • Friend of hacker admits selling data stolen from 17 companies
  • Retailers, payment processors were among ring's victims

A Russian accused of being a black-market broker for the most prolific computer hacking ring to hit corporate America pleaded guilty, a day after his friend admitted stealing 160 million credit- and debit-card numbers.

Dmitriy Smilianets, 32, admitted Wednesday in federal court in Camden, New Jersey, that he sold information stolen from 17 retailers, financial institutions and payment processors, including Nasdaq OMX Group Inc., 7-Eleven Inc., Carrefour SA and J.C. Penney Co.

Smilianets and hacker Vladimir Drinkman, friends from Moscow, were arrested in June 2012 while vacationing in Amsterdam. Smilianets was extradited to the U.S. a few weeks later.

Smilianets pleaded guilty to conspiracy to commit wire fraud, the same charge that Drinkman admitted on Tuesday. Drinkman also admitted a hacking charge. U.S. District Judge Jerome Simandle set Smilianets’s sentencing for Jan. 13.

Prosecutors said Drinkman and three others stole user names and passwords, personal identification information, and credit- and debit-card numbers from 2005 to 2012. Smilianets sold that data, known by hackers as “dumps,” to resellers who used online forums to pass it to other individuals and groups, the U.S. said. He entered the conspiracy in 2006, he said in court Wednesday.

Price List

Smilianets charged $10 for American credit-card numbers, $15 for Canadian numbers and $50 for European numbers, while offering discounts to bulk and repeat customers, prosecutors charged. Buyers encoded the data onto magnetic strips on blank plastic cards before making credit-card purchases and withdrawing money from automated teller machines, the U.S. said. Three of the 17 victims lost more than $300 million, prosecutors said.

An indictment depicted Drinkman as a master at evading online security and penetrating corporate networks, while Smilianets was the cash-out specialist in a conspiracy in which each member played a role. In his guilty plea, Drinkman admitted that each hacker had his own project, working on separate companies.

Three other alleged co-conspirators -- two Russians and one Ukrainian -- remain at large.

Smilianets faces as long as 20 years in prison on the conspiracy to commit wire fraud charge under his plea agreement with the government. He pleaded not guilty to all charges against him in August 2013 and was in jail in Morristown, New Jersey, mastering Spanish, studying Chinese and considering whether to accept a plea deal, his father said in an interview.

After the hearing, defense attorney Andrey Tikhomirov declined
to comment on the case.

Still at large are Aleksandr Kalinin of St. Petersburg, Roman Kotov of Moscow and Mikhail Rytikov of Odessa, Ukraine.

The case is U.S. v. Drinkman, 09-cr-00626, U.S. District Court, District of New Jersey (Camden).

For Related News and Information:
Russian Hacker Drinkman Pleads Guilty in Largest Data Breach
Black-Market Data Defendant’s Life Was Made for TV, Lawyer Says
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