Fraud in the News

Fly gets caught in his own trap

A Ukranian cybercrook who tried to frame Brian Krebs, security journalist and recipient of the ACFE's Guardian Award in 2015, by sending heroin to his house has pleaded guilty to credit card theft and illegally accessing more than 13,000 computers, according to the Naked Security article, Hacker who sent heroin to Brian Krebs pleads guilty, by Lisa Vaas on Jan. 26.

According to the article, Krebs reported that Sergey Vovnenko, 29, entered a guilty plea in Newark, New Jersey, to charges of aggravated identity theft and conspiracy to commit wire fraud. Prosecutors charged Vovnenko — whose aliases include "Fly," "Flycracker," "Flyck," "Centurion," "Darklife," "MUXACC" and "Stranier" — with operating a network of more than 13,000 hacked computers that he used to harvest credit card numbers and other sensitive information.

According to the article, the summer before his June 2014 arrest, Krebs had secretly gained access to Vovnenko's forum, where he discovered that Vovnenko was raising funds to buy heroin on Silk Road, have it shipped to Krebs' house and then spoof a call from one of his neighbors to tip off the local police when the drugs arrived.

According to the article, Krebs gave local police and the FBI a heads-up and did so in the nick of time. Three days after Krebs contacted local police a package arrived. The police analyzed its contents as being packets of almost pure heroin.

Libor rigging trial sees acquittals

On Jan. 27, a jury acquitted six former brokers of fraudulently trying to manipulate a widely used benchmark interest rate, according to The Wall Street Journal article Libor Brokers Acquitted of Fraud in London Trial, by David Enrich. According to the article, this is a major blow to a yearslong international investigation.

According to the article, all six men were accused of conspiring with former UBS Group and Citigroup Inc. trader Tom Hayes of trying to rig the London interbank offered rate (Libor). Hayes was convicted and sentenced to 14 years in prison in August 2015, though his sentence was subsequently reduced to 11 years.

According to the article, the jury reached unanimous verdicts to acquit five of the brokers on all counts. The sixth broker was acquitted on one count of conspiring to defraud, but the jury is still deliberating on another count against him.

The article states that the verdicts are a painful setback for the U.K.'s Serious Fraud Office (SFO), which brought the case. The agency's director had said the Libor investigation was his priority, and he'd hoped that a victory in this trial would pave the way to further prosecutions and to improve the SFO's international credibility.

The unhappiest place on Earth

According to the Jan. 22, 2016, Orlando Sentinel article, Disney fraudulent-ticket family gets prison, $107K bill, by Kevin P. Connolly, a Kissimmee, Florida, woman, two of her adult children and another relative were recently sentenced to prison and ordered to pay $107,000 in restitution for an identity theft scam involving tickets to Walt Disney World parks.

According to the article, they used stolen information to obtain fake driver licenses and credit cards, and then used those cards to buy tickets for Disney attractions. They sold the tickets to illegal ticket resellers in Kissimmee.

Each scammer was sentenced to at least three years in federal prison, according to the article, and the mother, Eileen Hightower, 50, received an additional 10 months.