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New York Indictments In Largest Ind entity Theft Involving 130 Million Credit/Debit Card Numbers

By Wayne Parsons

In a news release from Reuters to by Daniel Trotta the largest identity theft scam in U.S history was busted with three indictments today in New York City. Hold your breath: 130 million credit and debit card numbers are involved!

Hot on the heels of Bernie Madoff and AIG, along comes another blockbuster involving hacking of corporate data. I had just written about internet scams this morning and my story pales in comparison to this one. I was writing about those pleas from overseas about looking for heirs to some huge fortune and colon cleanse free give aways.

Mail Scam Asks For Bank Account Information From Hilo Man - by Wayne Parsons

My friend in Des Moines, Steve Lombardi has covered the Madoff debacle in great detail.

The Madoff Family and Friends Chinese Wall Begins to Crumble - by Steve Lombardi.

But now the latest crime spree is orchestrated by a few hackers. Reuters reports:

Albert Gonzalez, a former government informant already in jail in connection with hacking cases, and two unnamed Russians were indicted on charges related to five corporate data breaches from 2006 to 2008.

Card numbers were stolen in those breaches from credit-card processor Heartland Payment Systems (HPY.N) and retail chains 7-Eleven Inc and Hannaford Brothers Co, prosecutors said.

The men targeted two other corporations, the U.S. attorney's office in New Jersey said in the statement, without naming those companies.

Heartland Payment Systems and Hannaford Brothers already documented the thefts but no one expected a number like 130 million.

Gonzalez had been arrested last year in a separate hacking scheme involving a restaurant chain. He and two Russians (identified in the prosecution as Hacker 1 and Hacker 2) started with Fortune 500 companies and digging into their corporate websites to look for weaknesses in internet defenses.

Gonzales was a busy guy. In 2008 he and several co-conspirators from 5 countries were indicted for allegedly stealing 41 million credit and debit card numbers from retail companies like TJX Cos Inc (TJX.N), owner of the TJ Maxx and Marshall's. Total damages from that scam is over $400 million.

Gonzalez is in jail in Brooklyn and the location of the two Russian hackers is unknown.

The charges include conspiracy to gain unauthorized access to computers, to commit fraud in connection with computers and to damage computers, as well as conspiracy to commit wire fraud. The indictments could lead to as much as 35 years in prison and large fines if convicted.

The crooks would sell the data to be used to make fraudulent purchases according to the Reuters story.

They cited one example in which they said the suspects went to retail locations to identify the type of checkout machines, and after further investigation into the computer systems they uploaded information onto servers that worked as hacking platforms.

"These servers, located in New Jersey and around the world, were used by the co-conspirators to store information critical to the hacking schemes and subsequently to launch the hacking attacks," prosecutors said.

Heartland, based in Princeton, New Jersey, calls itself the fifth largest payments processor in the United States.

Reuters story by Daniel Trotta

Originally posted at InjuryBoard by Wayne Parsons

Full post as published by Honolulu Personal Injury Lawyer on August 17, 2009 (boomark / email).