DOJ; Two Ukrainian Nationals Indicted in Computer Hacking and Securities Fraud Scheme Targeting U.S. Securities and Exchange Commission

Hacking and Trading Scheme Involved Theft of Thousands of ‘EDGAR’ Filings, Including Draft Earnings Reports of Publicly Traded Companies before Reports were Made Public

Two Ukrainian men have been charged for their roles in a large-scale, international conspiracy to hack into the Securities and Exchange Commission’s (SEC) computer systems and profit by trading on critical information they stole.

In a 16-count indictment unsealed today in the District of New Jersey, Artem Radchenko, 27, and Oleksandr Ieremenko, 26, both of Kiev, Ukraine, are charged with securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy, wire fraud, and computer fraud. The SEC also filed a civil complaint today charging Ieremenko along with several other individuals and entities.

The indictment alleges that Radchenko and Ieremenko hacked into the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and stole thousands of files, including annual and quarterly earnings reports containing confidential, non-public, financial information, which publicly traded companies are required to disclose to the SEC. The defendants and others then profited by selling access to the confidential information in these reports and trading on this stolen information prior to its distribution to the investing public.

“The defendants allegedly orchestrated sophisticated computer intrusions to steal non-public information from the SEC, compromising the integrity of the market and depriving honest investors of a level playing field,” said Assistant Attorney General Benczkowski.  “The Department of Justice will aggressively pursue and prosecute those who attack our financial markets and seek to profit unfairly, no matter where such offenders reside.”

“The defendants charged in the indictment announced today engaged in a sophisticated hacking and insider trading scheme to cheat the securities markets and the investing public,” U.S. Attorney Craig Carpenito said. “They targeted the Securities and Exchange Commission with a series of sophisticated and relentless cyber-attacks, stealing thousands of confidential EDGAR filings from the Commission’s servers and then trading on the inside information in those filings before it was known to the market, all at the expense of the average investor.”

“Today’s indictment sends a strong message to those criminals who choose to use the cyber-world to profit from network intrusion,” Mark McKevitt, Special Agent in Charge of the Secret Service Newark Field Office, said. “The Secret Service will continue to aggressively investigate cyber-enabled financial crimes and develop innovative ways to combat emerging cyber threats.”

 “This indictment is a testament to the countless hours of hard work and dedication by law enforcement in the fight against cyber criminals,” FBI Special Agent in Charge Gregory W. Ehrie said.  “Cybercrime knows no boundaries. Dismantling these operations are possible only by working closely with our partners.”

According to the indictments unsealed today:

From February 2016 to March 2017, Radchenko, Ieremenko, and others conspired to gain unauthorized access to the computer networks of the SEC’s EDGAR system, which is used by publicly traded companies to file required disclosures, such as annual and quarterly earnings reports. These filings contained detailed information about the financial condition and operations of the companies, including their earnings. Such information can, and often does, affect the stock price of the companies when it is made public, and is therefore highly confidential prior to its disclosure to the general public. 

The EDGAR system allows companies to make test filings in advance of a public filing. These test filings often contain information that is the same as, or similar to the information in the final filing. The defendants stole thousands of test filings before they were released to the public, and sought to profit from their theft by using the information in the test filings to trade before the investing public learned the information. 

To gain access to the SEC’s computer networks, the defendants used a series of targeted cyber-attacks, including directory traversal attacks, phishing attacks, and infecting computers with malware. Once the defendants had access to the test filings on the EDGAR system, they stole them by copying the test filings to servers they controlled. For example, between May 2016 and October 2016, the defendants extracted thousands of test filings from the EDGAR servers to a server they controlled in Lithuania.

Ieremenko was previously charged in a hacking and securities fraud scheme in an indictment in the District of New Jersey. That indictment charged Ieremenko with being part of a large-scale, international conspiracy to hack the computer systems of three newswire organizations and steal press releases containing confidential non-public financial information relating to hundreds of companies traded on the NASDAQ and NYSE from three newswires. The members of the conspiracy profited from the theft by trading on the news ahead of its distribution to the investing public. The indictment unsealed today alleges Ieremenko employed some of the same methods to hack the SEC.   

Radchenko recruited to the scheme traders who were provided with the stolen test filings so they could profit by trading on the information before the investing public. Armed with the stolen information, the traders profited by executing various trades in brokerage accounts they controlled. In one instance, a test filing for “Public Company 1” was uploaded to the EDGAR servers at 3:32 p.m. (EDT) on May 19, 2016. Six minutes later, the defendants stole the test filing and uploaded a copy to the Lithuania server. Between 3:42 p.m. and 3:59 p.m., a conspirator purchased approximately $2.4 million worth of shares of Public Company 1. At 4:02 p.m., Public Company 1 released its second quarter earnings report and announced that it expected to deliver record earnings in 2016. Over the next day, the conspirator sold all the acquired shares in Public Company 1 for a profit of more than $270,000.

The wire fraud conspiracy and substantive wire fraud counts with which the defendants are charged carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud conspiracy, computer fraud conspiracy, and substantive computer fraud counts with which the defendants are charged carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. 

This case was investigated by the U.S. States Secret Service and special agents of the FBI, with assistance from the SEC’s Market Abuse and Cyber Units and the Justice Department’s Office of International Affairs.

 The prosecution is being handled by Trial Attorney Aarash Haghighat of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), and by Assistant U.S. Attorney Daniel Shapiro; Chief of the Cybercrimes Unit Justin S. Herring; Attorney-in-Charge, of the U.S. Attorney’s Office in Trenton Nicholas Grippo; and Special Assistant U.S. Attorney Lynn O’Connor.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.   

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The U.S. Blue Plastic Bag Of International Child Trafficking Propaganda

A 15-year old was in the process of being sold into
forced labour by suspected traffickers and was intercepted
just before the transaction could be completed.
The blue plastic bag contained her entire possessions.

"The blue plastic bag contained her entire possessions"

This is the description of a child rescured by an INTERPOL led human trafficking operation.

Does this sound familiar?

Well, of course it does because it is foster care, the U.S. model of human trafficking, in the name of the tax exempt God.

Now, take the time to watch this high quality, U.S. foster care propaganda video to see how trafficking children is all warm and fuzzy, and how they raise money to make sure they have something better than a "blue plastic bag" when they are trafficked from place to place.

What they will not tell you in these videos is about the rapes, tortures, drugging as lab rats, and how their trust funds are stolen.

Some, not many, U.S. foster kids get blue duffle bags, now.

So, what is the difference?

To begin, U.S. children who are trafficked now have "blue duffle bags" to carry around their worldly possessions, well, not all of them, just a few, a very few, because the money they raise has to pay operational expenses like funding political campaigns, luxury vacations, and personal shopping sprees to look good for the fundraising events. 

Then we have the issue I previously raised with Faith Based Initiative funding inder the U.S. Department of Homeland Security and the U.S. State Department.

U.S. Department of Homeland Security - Faith Based Initiative Human Trafficking Blue Campaign

The federal End Human Trafficking Blue Campaign is now under the U.S. Department of Homeland Security, with its international sister program in the U.S. State Department United States Agency for International Developmemt (USAID) of the U.S. Department of State Office of Religion and Foreign Affiars, the same Office Brownback is taking over.

Learn more: BEVERLY TRAN: FBI, DHS, Faith Based Initiatives & Child Welfare Fraud In Detroit http://beverlytran.blogspot.com/2017/12/fbi-dhs-faith-based-initiatives-child.html#ixzz51SryXlqy
Stop Medicaid Fraud in Child Welfare 

These federal departments only fund propaganda campaigns to make it look like they are doing something to end child trafficking.

Even the U.S. House Judiciary Committee jumped on the "blue" child welfare propaganda fundraising campaign by co-opting pinwheel symbols to launch their reelection campaign fundraising.

Notice the blue fundraising pinwheel is at the end of the Judiciary video, then compare it to the child abuse and neglect awareness fundraising campaign of blue pinwheels.

But wait, there is one more agency that has powers over missing and exploited children, The U.S. Secret Service.

In 1994, Congress mandated the Secret Service provide forensic and technical assistance in matters involving missing and exploited children. The Secret Service offers this assistance to federal, state and local law enforcement agencies and the National Center for Missing and Exploited Children.  (WARNING: The link to NCMEC is not secured for some reason.  It may be due to the recent redo of the Secret Service website, or the fact that NCMEC engages in questionable activities.)

So, what has the Secret Service been doing all these years to deal with child trafficking in the U.S. and what is their budget?

I say it is fine time for what I like to call a collaborative conjugation and pool all this propaganda coverup money, hand it over to FBI so they can construct and lead centralized operations in the U.S. to better work with the States and INTERPOL.

Perhaps, I will just go ahead, design a model and advocate for more independence of the FBI in ending child welfare fraud by allwoing them to blossom and do what they can do best.

Child trafficking is foster care and adoption, neatly packaged and sold to the public in a blue plastic propaganda bag.

Much love to my INTERPOL #Superfans but it is time to do that collaborative conjugation and hit the profiteers behind human trafficking, and I know exactly who they are.

INTERPOL-led operation rescues 500 victims of human trafficking, leads to 40 arrests 

COTONOU, Benin – Nearly 500 victims of human trafficking, including 236 minors, have been rescued following an INTERPOL operation carried out simultaneously across Chad, Mali, Mauritania, Niger and Senegal.

 In total, 40 suspected traffickers were arrested and will now face prosecution for offences including human trafficking, forced labour and child exploitation.

They are accused of forcing victims to engage in activities ranging from begging to prostitution, with little to no regard for working conditions or human life.

 In one case, a 16-year old Nigerian girl was promised work in Mali which would allow her to care for her family.

She was taken on by a ‘sponsor’ who then forced her into prostitution to reimburse her travel costs. In another case, a 15-year old was in the process of being sold into forced labour by suspected traffickers and was intercepted just before the transaction could be completed.

The victim was found holding a blue plastic bag containing their entire possessions.

 To ensure that victims received the necessary care following their rescue, the International Office for Migration (IOM) and several NGOs were involved in post-operation interviews and treatment. Operation Epervier was held under the aegis of the Sahel Project, an initiative funded by the German Foreign Office which targets the organized crime groups behind human trafficking across the region. Officers from INTERPOL’s Regional Bureaus in Abidjan and Yaounde assisted in coordinating the operation, which also included specialist officers from INTERPOL’s Trafficking in Human Beings unit at its General Secretariat headquarters in Lyon, France.

 “In addition to arrests, this operation has opened a number of ongoing investigations to further disrupt the crime networks involved in trafficking in human beings, emphasizing the effectiveness of such operations via INTERPOL’s international network,” said Yoro Traore, a Police Inspector with the INTERPOL National Central Bureau in Bamako.

 “The results of this operation underline the challenge faced by law enforcement and all stakeholders in addressing human trafficking in the Sahel region,” said Innocentia Apovo, Criminal Intelligence officer with INTERPOL’s Trafficking in Human Beings Unit and coordinator of the operation.

She also thanked the German Foreign Office for their continued support of such initiatives.

 The operation was followed by a regional working group meeting in Cotonou, gathering 100 participants from 15 countries across West Africa and the Sahel. Discussions focused on the outcomes of Operation Epervier as well as the way forward for future activities in the region.

 “This type of regional exchange is important to ensure that good and not so good practices are shared, to ensure that we collectively improve on prevention, protection and prosecution,” said Anke Strauss, IOM’s Chief of missions in Mauritania. Emerging trends in human trafficking will be high on the agenda of the 5th INTERPOL Global Conference on Trafficking in Human Beings and Smuggling of Migrants, which will be held on 6 and 7 December 2017 in Doha, Qatar.

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Day 233 - Hillary's Leakers Hackers and Henchmen: Civil Rights, Secret Service & Watergate

DAR, Abolition, Womens Rights, Civil Rights - Don't Underestimate Grandmother's With Tennis Shoes

 SEIU Senate Offices - There Are a Ton of Them 

Is the Secret Service a Secret Police?

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Day 185 Hillary Hackers, Awan Brothers Saga Deepens

Alles in at Secret Service, What Will Happen To Prowler Teams? 

Sammy ToQueer's 17 Tickets Will Describe A Ratline I am not writing Toqueer Ahmed's name for any reason, but I do bank in Abu Dhabi.

Abu Dhabi Banking Anyone? Tricare Connection 5111 Leesburg Pike, Springfield VA

Sammy ToQueer's Three Addresses On Lakeshore Drive in Euclid. I Thought He Lived With Imran in Springfield, VA?

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CONYERS Statement At Hearing With DOJ IG & GAO Directors Of Justice & Homeland Issues

Washington, D.C. – House Judiciary Committee Ranking Member John Conyers, Jr. (D-MI) provided the following remarks at a hearing entitled, “Examining Systemic Management and Fiscal Challenges Within the Department of Justice” featuring Department of Justice Inspector General Michael Horowitz and U.S. Government Accountability Office of Homeland Security and Justice Director Diana Maurer:

Dean of the U.S. House
of Representatives
John Conyers, Jr.

Thank you, Mr. Chairman. 

And thank you to our distinguished guests for joining us today.

Mr. Chairman, I understand that you have framed this hearing around management and fiscal challenges at the Department of Justice.

Like you—and like our witnesses from the Government Accountability Office and the Office of the Inspector General—I believe that meaningful oversight of the Department of Justice requires us all to be good stewards of taxpayer funds.

There are many areas we can pursue, including the disproportionate amount of the Department’s budget that is consumed by prison spending.  In addition, the Inspector General has issued a report specifying serious problems with privately operated prisons, which do not maintain the same level of safety and security as Bureau of Prisons facilities and which do not provide an adequate level of rehabilitative services.  These are troubling issues that many of my colleagues, including Congresswoman Sheila Jackson Lee, and I have focused on over the years. 

However, given the roles our witnesses play in more pressing developments at the Department of Justice, I would also like to focus my time today on a few, more discrete issues.

First, on the topic of fiscal management, I wonder if our witnesses can speak to the budget priorities of the Trump Administration.

This Committee has oversight of the United States Secret Service—an agency that provides protection to the President every time he travels to New York or Florida for the weekend, and to his family as they travel the world to advance the interests of the Trump Organization.

It seems to me that the GAO is the right organization to evaluate the cost of that protection to the taxpayer, and to place that cost in the context of a proposed budget that makes deep cuts to a number of important programs.

Second, on February 17, 2017, Mr. Jeffries and I wrote a letter—signed by many of my colleagues—to you, Mr. Inspector General.

In that letter, we asked your office to investigate two matters: (1) whether the Trump Administration has engaged any improper effort to intimidate or threaten whistleblowers, and (2) whether Attorney General Sessions has a conflict of interest that requires his recusal from any matter involving contact between Russian officials and the Trump campaign.

Let me be clear: I do not condone the leaks of classified information to the press. 

But the President has gone out of his way to intimidate virtually any individual hoping to expose misconduct in the Trump Administration—including but not limited to random searches of personal cell phones, and general harassment via Twitter.

I know that the Inspector General agrees that whistleblowers are key to identifying waste, fraud, and abuse, and I hope his office is looking into the matter.

Finally, on March 16, 2017, I again wrote to the Inspector General, this time asking about improper contacts between the White House and the Department of Justice.

We know that the White House Chief of Staff has called the Director and Deputy Director of the FBI, asking them to comment publicly to “knock down” reporting he did not like.

We also know that President Trump placed a phone call to Preet Bharara, former U.S. Attorney for the Southern District of New York, the day before the Administration summarily fired all 46 sitting U.S. Attorneys.

           

And, we know that these calls are in direct violation of standing guidance at the Department of Justice, prohibiting contact between its investigators and the White House except in extraordinary circumstances.

To their credit, none of these officials complied with pressure from the White House.  Knowing the Department’s rules about such contacts, Mr. Bharara did not even take the call.

Nevertheless, I fear that the White House has ignored this important policy—and that further investigation by the Inspector General is warranted.

I look forward to our discussion on these and other matters today, I thank the Chairman, and I yield back.

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Trey Gowdy Finds Out Secret Service Violated Jason Chaffetz Personnel File

This is getting nasty when your personnel file is accessed by the Secret Service then they indirectly insult you in a public memorandum, which will exist in the annals of history, and you are the person setting up the investigation.

Oh, I bet that public record is going to be amended, alright.

This is what a bi-partisan Congress is supposed to look like.

This is Judiciary.

This is hot.

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HOUSE JUDICIARY COMMITTEE SEEKS ANSWERS ON SERIES OF SECRET SERVICE FAILURES

WASHINGTON – Today, House Judiciary Committee Chairman Bob Goodlatte (R-Va.), Ranking Member John Conyers (D-Mich.), and House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations Subcommittee Chairman Jim Sensenbrenner (R-Wisc.) and Ranking Member Bobby Scott (D-Va.) sent a letter to Acting Secret Service Director Joseph Clancy seeking answers to over a dozen questions regarding a series of security breaches that occurred at the White House complex and during official travel. The House Judiciary Committee, which has primary jurisdiction over the Secret Service, including its critical role in protecting the President and the White House complex, will hold both public and classified hearings in November to examine ongoing issues at the agency.

In preparation for the hearings, Chairman Goodlatte, Ranking Member Conyers, Crime Subcommittee Chairman Sensenbrenner, and Crime Subcommittee Ranking Member Scott write:

U.S. Judiciary Secret Service Investigation Request Letter

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