Aug 5, 2008 11:44 pm US/Eastern
Local Stores Hit In Historic Identity Theft Case
BOSTON (WBZ) ―
The U.S. Justice Department says it has broken-up the largest worldwide retail hacking ring in history. The 11 people indicted are from the Ukraine, Belarus, Estonia, The People's Republic of China, three are U.S. citizens and one is known only by an online alias, his residence is unknown.
They all face charges ranging from computer fraud to conspiracy. One of them, Albert "Segvec" Gonzalez of Miami faces up to life in prison because of the scope of the case.
The case is important enough to the Justice Department that the attorney general and the U.S. Director of Secret Service came to Boston to announce the indictments against the 11 defendants. Attorney General Michael Mukasey said, "so far as we know, this is the single largest and most complex identity theft case ever charged in this country. They used sophisticated computer hacking techniques, breaching security systems and installing programs that gathered enormous quantities of personal financial data, which they then allegedly sold to others or used themselves. And in total, they caused widespread loses by banks, retailers, and consumers."
The retailers victimized include TJX Companies headquarters in Framingham, Natick-based BJ's Wholesale Club, Office Max, Boston Market, Barnes and Noble, Sports Authority, Forever 21 and DSW. The companies were hacked by a tactic called "wardriving," derived from the term "wardialing" used in the film "Wargames."
U.S. Attorney for Massachusetts, Michael Sullivan, said wardriving simply involves driving around with a laptop computer trying to gain access to wireless networks. The Justice Department says after hacking into the networks, the hackers used "sniffer" programs to find card numbers and passwords. They would send the numbers to servers in the U.S. and eastern Europe and sell stolen numbers online. The stolen numbers were "cashed-out" by encoding them on magnetic strips of blank cards to steal money from ATMs.
Secret Service Director Mark Sullivan, commending investigators who worked on the case said, "Technology has forever changed the way commerce is conducted, virtually erasing geographic boundaries."
Federal prosecutors say it's difficult to calculate how much money was lost by the victims except that it was tens of millions of dollars. The Justice Department estimates about 41 million credit and debit card numbers were stolen in the scheme.
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