According to the Complaint unsealed today in Newark federal court:
Beginning in late 2010, Murmylyuk worked with others to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms. Members of the ring first gained unauthorized access to the online accounts and changed the phone numbers and email addresses on file to prevent notice of unauthorized trading from going to the victims.
Once the hackers controlled the accounts, they used stolen identities to open additional accounts at other brokerage houses. They then caused the victimsâ accounts to make unprofitable and illogical securities trades with the new accounts â referred to in the Complaint as the âProfit Accountsâ â that benefitted the hackers.
One version of the fraud involved causing the victimsâ accounts to sell options contracts to the Profit Accounts, then to purchase the same contracts back minutes later for up to nine times the price. In another version of the fraud, they used the Profit Accounts to offer short sales of securities at prices well over market price and to force the victim accounts to make irrational purchases. (A short sale is a sale of stock that an investor does not own, but rather borrows from a stock lender and must eventually return.)
Murmylyuk and a conspirator recruited foreign nationals visiting, studying, and living in the United States â including Russian nationals and Houston residents Anton Mezentsev, Galina Korelina, Mikhail Shatov and others â to open bank accounts into which illegal proceeds could be deposited. Murmylyuk and the conspirator then caused the proceeds of the sham trades to be transferred from the Profit Accounts into the those accounts, where the stolen money could be withdrawn.
Fidelity, Scottrade, E*Trade, and Schwab have reported combined losses to date of approximately $1 million as a result of the fraudulent schemes.
http://www.justice.gov/usao/nj/Press/files/Murmylyuk, Petr Charged News Release.html
Beginning in late 2010, Murmylyuk worked with others to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms. Members of the ring first gained unauthorized access to the online accounts and changed the phone numbers and email addresses on file to prevent notice of unauthorized trading from going to the victims.
Once the hackers controlled the accounts, they used stolen identities to open additional accounts at other brokerage houses. They then caused the victimsâ accounts to make unprofitable and illogical securities trades with the new accounts â referred to in the Complaint as the âProfit Accountsâ â that benefitted the hackers.
One version of the fraud involved causing the victimsâ accounts to sell options contracts to the Profit Accounts, then to purchase the same contracts back minutes later for up to nine times the price. In another version of the fraud, they used the Profit Accounts to offer short sales of securities at prices well over market price and to force the victim accounts to make irrational purchases. (A short sale is a sale of stock that an investor does not own, but rather borrows from a stock lender and must eventually return.)
Murmylyuk and a conspirator recruited foreign nationals visiting, studying, and living in the United States â including Russian nationals and Houston residents Anton Mezentsev, Galina Korelina, Mikhail Shatov and others â to open bank accounts into which illegal proceeds could be deposited. Murmylyuk and the conspirator then caused the proceeds of the sham trades to be transferred from the Profit Accounts into the those accounts, where the stolen money could be withdrawn.
Fidelity, Scottrade, E*Trade, and Schwab have reported combined losses to date of approximately $1 million as a result of the fraudulent schemes.
http://www.justice.gov/usao/nj/Press/files/Murmylyuk, Petr Charged News Release.html