14 DAY TRIAL // Petr Murmylyuk, 33, a Russian national living in Brooklyn, New York, has been sentenced to 30 months in prison for taking part in a securities fraud scheme that involved hacking into trading accounts. He has also been sentenced to three years of supervised release and ordered to pay $505,357.79 (€374,866.83) in restitution.
The sentence comes after Murmylyuk pleaded guilty to conspiracy to commit securities fraud.
According to the FBI, Murmylyuk and others hacked into the online accounts of the customers of various brokerage companies, including E*Trade, Schwab, Scottrade and Fidelity. The information obtained from the hijacked accounts was used to open new accounts at other brokerage firms.
They made a profit by making unprofitable and illogical security trades between the victim’s account and the newly created ones, which they dubbed “profit accounts.”
“One version of the fraud involved causing the victims’ accounts to sell options contracts to the profit accounts and then to purchase the same contracts back minutes later for many times the price,” the FBI revealed.
In order to avoid triggering the security mechanisms designed to inform the victims in case of suspicious transactions, the fraudsters changed the email addresses and phone numbers associated with the targeted accounts.
The illegal proceeds were deposited into the bank accounts of foreign nationals who came to the US for various reasons. These individuals were recruited by the fraudsters especially for this purpose.
The targeted brokerage firms are said to have suffered losses of around $1 million (€730,000).
Murmylyuk was arrested in November 2011 and was charged in April 2012.
The list of US government organizations involved in this investigation includes the FBI, the ICE, the HIS, and the IRS. The Financial Fraud Enforcement Task Force that US President Barack Obama established in an effort to combat financial crimes has been credited for this prosecution.