The indictments announced by U.S. Attorney Paul J. Fishman follow an investigation by U.S. Immigration and Custom’s Enforcement’s (ICE) Homeland Security Investigations (HSI) working in conjunction with the U.S. Secret Service, Department of Defense Criminal Investigative Service, and Internal Revenue Service Criminal Investigations.
"Financial crimes threaten the health of our national economy. Criminals who attempt to cheat law-abiding citizens out of their hard-earned money will continue to be a major investigative priority for HSI," said HSI Newark Special Agent in Charge Andrew McLees. "This case illustrates the ability of federal law enforcement agencies to leverage resources and work together to achieve justice."
The three defendants – Oleksiy Sharapka, 33 and Leonid Yanovitsky, 39, both of Kiev, Ukraine; and Richard Gundersen, 47, of Brooklyn, N.Y., were indicted by a federal grand jury on charges of conspiracy to commit wire fraud, conspiracy to commit access device fraud and identity theft, and with aggravated identity theft.
According to the indictment and court documents, Sharapka allegedly directed the conspiracy with the help of Yanovitsky. Gunderson allegedly facilitated the movement of fraud proceeds. Sharapka and Yanovitsky are fugitives. Gundersen is in custody and will be arraigned on a date still to be determined.
The hackers gained unauthorized access to the bank accounts of customers of more than a dozen global financial institutions and businesses, including: Aon Hewitt; Automatic Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JPMorgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.
After obtaining unauthorized access to bank accounts, the conspirators diverted money to other bank accounts and pre-paid debit cards the defendants controlled. They then implemented a sophisticated "cash out" operation, employing crews of individuals known as "cashers" to withdraw the stolen funds, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere.
As part of the scheme, the defendants stole identities from individuals in the United States, which they used to facilitate the cash out operation, including by transferring money to cards in the names of those stolen identities. They also used some of those identities to file fraudulent tax returns with the Internal Revenue Service seeking refunds.
The defendants and their conspirators laundered the proceeds of the scheme, often through international wire transfer services, to the leaders of the conspiracy overseas. The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.
If convicted, each of the defendants face a maximum potential penalty of 20 years in prison on the conspiracy to commit wire fraud count, five years in prison on the conspiracy to commit access device fraud and identity theft count, and a consecutive term of two years in prison on the aggravated identity theft counts.
The wire fraud and identity theft counts also carry a maximum fine of $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offenses. The money laundering conspiracy count carries a maximum fine of $500,000, or twice the value of the monetary instruments involved.
The government is represented by Assistant U.S. Attorney Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This prosecution is part of efforts underway by the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.
The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
For more information about the task force visit: www.stopfraud.gov.