Three Men Arrested In Hacking And Spamming Scheme; Targeted Personal Information Of 60 Million People
Three men from Florida, New Jersey, and Maryland were charged today with a wide-ranging computer hacking and identity theft scheme that compromised the personally identifiable information (PII) of millions of people and generated more than $2 million in illegal profits, U.S. Attorney Paul J. Fishman announced.
Timothy Edward Livingston, 30, of Boca Raton, Florida; Tomasz Chmielarz, 32, of Rutherford, New Jersey; and Devin James McArthur, 27, of Ellicott City, Maryland, are charged by indictment with conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit wire fraud. Livingston and Chmielarz are also charged with conspiracy to commit fraud and related activity in connection with electronic mail.
According to the indictment:
Beginning as early as 2011, Livingston and others allegedly operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited, or “spam,” emails on behalf of its clients. Livingston’s clients included legitimate businesses, such as insurance companies that wished to send bulk emails to advertise their businesses, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions. Typically, Livingston charged $5 to $9 for each spam email that resulted in a completed transaction for a client.
Many internet service providers used spam filters to prevent spam from reaching their customers’ email accounts. Beginning in January 2012, Livingston allegedly solicited Chmielarz to write computer programs to send spam in a manner that would conceal the true origin of the email and bypass spam filters. Livingston and Chmielarz started using proxy servers to send out spam messages using botnets to hide the true origin of the spam, help them remain anonymous, and to evade anti-spam filters and other spam blocking techniques. Livingston also registered certain websites used in the spam campaigns in the name of his alias, “Mark Lloyd,” to avoid detection.
Livingston and Chmielarz allegedly hacked into the email accounts of individuals and compromised and seized control of the mail servers of some of the corporate victims to further their spam campaigns. They created custom software designed to hack into the email accounts of customers of a company identified in the indictment as “Corporate Victim 1.” Once the email account software gained access to a Corporate Victim 1 user’s account, it created sub-accounts on the account and used them to send out spam. Livingston and Chmielarz programmed the email account software to access the mail server of Corporate Victim 1 through proxy servers to obscure their true identities. This allowed them to send out massive amounts of spam without identifying themselves as the senders, and instead using Corporate Victim 1’s mail servers and customer accounts.
Livingston and Chmielarz also allegedly created custom software that leveraged vulnerabilities in the websites of a number of corporations, including one identified in the indictment as “Corporate Victim 2” (the web form software), which allowed Livingston and Chmielarz to use Corporate Victim 2’s email servers to send out spam that appeared to be from Corporate Victim 2, but in reality was from Livingston and his conspirators.
Livingston, Chmielarz and McArthur also worked together to steal the confidential business information of the corporate victims, including databases containing the PII of millions of Americans, so that they could use that information in spam campaigns. In May of 2013, Livingston and Chmielarz discussed stealing confidential business information from “Corporate Victim 3,” as identified in the indictment. In an online chat, Livingston told Chmielarz, “here is the site I need scrapped (sic),” and provided Chmielarz with an address for Corporate Victim 3’s website and the login credentials for an employee. “Scraping” is a technique employed to extract large amount of data from websites.
In another online chat, Livingston told Chmielarz that the database they were going to steal from Corporate Victim 3 contained 10 million records. Livingston subsequently paid Chmielarz to write a computer program to steal the database.
From February 2014 through February 2015, McArthur worked as a sales representative at a corporation identified in the indictment as “Corporate Victim 4.” In a series of online chats in August 2014, Livingston, Chmielarz, and McArthur discussed using McArthur’s position at Corporate Victim 4 to steal confidential business information, including the PII of millions of the company’s customers.
On Aug.11, 2014, McArthur allegedly provided Livingston with access to a remote administration tool on a computer with access to the computer network of Corporate Victim 4 without authorization from his employer. McArthur gave Livingston and Chmielarz access to Corporate Victim 4’s computer network using the remote administration tool to steal the names, addresses, phone numbers, and email addresses of potential customers, current customers, and former customers. The defendants and others could use that information to send spam to those individuals.
Livingston told defendant Chmielarz that he estimated that Corporate Victim 4’s database had records for 50 million people; Livingston also discussed the technical challenges associated with stealing such a large volume of data from Corporate Victim 4.
In an online chat dated Sept. 3, 2014, Livingston and McArthur discussed the contents of the database that they had stolen from Corporate Victim 4. McArthur estimated that they had succeeded in stealing 24.5 million records.
The maximum potential penalties for each count are as follows:
|Conspiracy to Commit Fraud and Related Activity in Connection with Computers||Five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense|
|Conspiracy to Commit Wire Fraud||20 years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense|
|Conspiracy to Commit Fraud and Related Activity in Connection with Electronic Mail||Five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense|
The indictment also notices the forfeiture of $299,653 from several bank accounts, a 2006 Ferrari F430 two-door Spider Convertible and a 2009 Cadillac Escalade SUV.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Peter Gaeta of the Asset Forfeiture-Money Laundering Unit.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
Livingston: Jeffrey Cox Esq., Boca Raton, Florida
Chmielarz: Michael Koribanics Esq., Clifton, New Jersey
SOURCE: U.S. Attorney’s Office, District of New Jersey