Accused JPMorgan Hack Mastermind Pleads Not Guilty in U.S.

  • Hackers used data to fuel pump-and-dump scheme, U.S. alleged
  • Criminal enterprise made hundreds of millions, U.S. said

An Israeli who the U.S. said orchestrated the biggest-ever theft of customer data from U.S. financial institutions, including JPMorgan Chase & Co, pleaded not guilty to wire fraud and money laundering charges after being extradited to New York.

Gery Shalon, the self-described founder of a sprawling cybercriminal enterprise that had hundreds of employees, according to the U.S., and Ziv Orenstein, his alleged top lieutenant, were both ordered held without bail by a magistrate judge.

The men are tied to previously reported hacks of JPMorgan, E*Trade Financial Corp., Scottrade Financial Services Inc. and Dow Jones & Co., a unit of News Corp. Working with a hacker group that operated in more than a dozen countries, they allegedly made hundreds of millions of dollars from pump-and-dump stock scams, illegal Internet casinos and a payment-processing service for criminals.

They used data from financial institutions to trick account-holders into buying stock they had bought earlier and dumped when prices rose, the U.S. said.

The proceeds from the illegal operations were shuffled through Cyprus, Azerbaijan and Switzerland, prosecutors said.

The case is U.S. v. Shalon, 15-cr-00333, U.S. District Court, Southern District of New York (Manhattan).

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